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<SEC-DOCUMENT>/in/edgar/work/20000629/0000950152-00-005079/0000950152-00-005079.txt : 20000920
<SEC-HEADER>0000950152-00-005079.hdr.sgml : 20000920
ACCESSION NUMBER:		0000950152-00-005079
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		10
CONFORMED PERIOD OF REPORT:	20000331
FILED AS OF DATE:		20000629

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PIONEER STANDARD ELECTRONICS INC
		CENTRAL INDEX KEY:			0000078749
		STANDARD INDUSTRIAL CLASSIFICATION:	 [5065
]		IRS NUMBER:				340907152
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			0331
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		10-K
			SEC ACT:		
			SEC FILE NUMBER:	000-05734
			FILM NUMBER:		665114
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		4800 E 131ST ST
				CITY:			CLEVELAND
				STATE:			OH
				ZIP:			44105
				BUSINESS PHONE:		2165873600
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		4800 E 131ST ST
					CITY:			CLEVELAND
					STATE:			OH
					ZIP:			44105
</MAIL-ADDRESS>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>e10-k.txt
<DESCRIPTION>PIONEER-STANDARD ELECTRONICS, INC.   10-K
<TEXT>

<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

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

    For the fiscal year ended March 31, 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 No. 0-5734

                       PIONEER-STANDARD ELECTRONICS, INC.
             (Exact name of registrant as specified in its charter)

              Ohio                                           34-0907152
    (State or other jurisdiction                         (I.R.S. employer
    of incorporation or organization)                    identification no.)

   6065 Parkland Boulevard, Mayfield                            44124
             Heights, Ohio                                    (Zip code)
 (Address of principal executive offices)

       Registrant's telephone number, including area code: (440) 720-8500

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                        Common Shares, without par value
                          Common Share Purchase Rights

         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 requirement for the past 90 days.  Yes X    No
                                             ---     ---

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K Annual Report
or any amendment to this Form 10-K.  [ ]

         The aggregate market value of voting shares of the Registrant held by
non-affiliates was $338,032,724 as of June 5, 2000, computed on the basis of the
last reported sale price per share ($13.50) of such shares on the Nasdaq
National Market. Common Shares held by each officer, Director and person who
owns or may be deemed to own 10% or more of the outstanding Common Shares have
been excluded because such persons may be deemed to be affiliates. This
determination of affiliate status is not necessarily a conclusive determination
for other purposes.

         As of June 5, 2000, the Registrant had the following number of Common
Shares outstanding: 31,541,780.


<PAGE>   2



                       DOCUMENTS INCORPORATED BY REFERENCE


         Portions of the Registrant's definitive Proxy Statement to be used in
connection with its Annual Meeting of Shareholders to be held on July 25, 2000
are incorporated by reference into Part III of this Form 10-K.

         Portions of the Registrant's Annual Report to Shareholders for the
fiscal year ended March 31, 2000 are incorporated by reference into Parts II and
IV of this Form 10-K.

         Except as otherwise stated, the information contained in this Annual
Report on Form 10-K is as of March 31, 2000.


                                     PART I

ITEM 1.  BUSINESS

         (a) Pioneer-Standard Electronics, Inc. was organized as an Ohio
corporation in 1963 and maintains its principal office at 6065 Parkland
Boulevard, Mayfield Heights, Ohio 44124 (telephone number (440) 720-8500).
Except as otherwise stated, the term "Company" as used herein shall mean
Pioneer-Standard Electronics, Inc. and its wholly-owned subsidiaries.

         DESCRIPTION OF SEGMENTS - The Company's business is classified into
two segments: Computer Systems and Industrial Electronics.

         Computer Systems. The Company's computer systems distribution and
value-added services business is conducted by its Computer Systems segment.
Through this segment the Company distributes a wide variety of systems products,
including mid-range computer systems and high-end platforms, storage subsystems,
software, servers, computers (primarily mini and personal), display terminals
and networking products. As a complement to its systems distributor operations,
the Company provides value-added services including systems integration,
enterprise resource planning systems design and network consulting. The
Company's systems products and value-added services accounted for 48% of the
Company's sales in fiscal 2000 compared with 50% in 1999 and 40% in 1998.

         Industrial Electronics. The Company's Industrial Electronics segment
conducts the operations of the Company related to industrial electronics
products distribution. Products sold by this segment may be classified into two
broad categories: semiconductors and interconnect, passive and electromechanical
components. The semiconductor products distributed by this segment include
microprocessors, memory devices, programmable logic devices and analog and
digital integrated circuits and other semiconductor devices. This segment's
interconnect, passive and electromechanical product offerings include
capacitors, connectors, resistors, switches and power conditioning equipment.
This segment also provides value-added services associated with industrial
electronic products, such as point of use inventory management, just-in-time
kitting operations, turnkey assembly, memory and logic device programming,
connector and cable



                                       2
<PAGE>   3


assemblies to customer specifications and power products integration. Sales of
industrial electronics products constituted 52% of the Company's total sales in
fiscal 2000, compared with 50% in 1999 and 60% in 1998.

         For financial information regarding the Company's two business
segments, see Note 6 of Notes to Consolidated Financial Statements of the
Company.

         PRODUCTS DISTRIBUTED AND SOURCES OF SUPPLY - The Company distributes
products supplied by more than 100 manufacturers. A majority of the Company's
revenues comes from products sourced by relatively few suppliers. During the
2000 fiscal year, products purchased from the Company's three largest suppliers
accounted for 59% of the Company's sales volume. The largest three suppliers,
Compaq (including Digital Equipment Corporation), IBM and Intel Corporation,
supplied 21%, 20% and 18%, respectively, of the Company's sales volume. The loss
of any one of the top three suppliers and/or a combination of certain other
suppliers could have a material adverse effect on the Company's sales and
earnings unless alternative products manufactured by others are available to the
Company.

         INVENTORY - The Company believes that it must maintain certain levels
of inventory in order to ensure that the lead times to its customers remain
competitive. However, to minimize its inventory exposure, the Company has
arrangements with certain of its suppliers for "just in time" product delivery.
The majority of the products sold by the Company are purchased pursuant to
distributor agreements which generally provide for inventory return privileges
by the Company upon cancellation of a distributor agreement. The distributor
agreements also typically provide protection to the Company for product
obsolescence and price erosion. The Company believes it has good relationships
with its suppliers.

         CUSTOMERS - The Company serves over 24,000 customers in many major
markets of North America. Both of the Company's segments have a varied customer
base which includes original equipment manufacturers (which constitute the core
customer base of the Industrial Electronics segment), value-added resellers,
research laboratories, government agencies and commercial end-users, including
manufacturing companies and service and other non-manufacturing organizations.
No single customer accounted for more than ten percent of the Company's total
sales or the sales of either segment during the fiscal year 2000.

         BACKLOG - The Company historically has not had a significant backlog of
orders, although some shipments may be scheduled for delivery over an extended
period of time. There was not a significant backlog during the last fiscal year.

         COMPETITION - The sale and distribution of industrial electronic and
computer systems products are highly competitive, primarily with respect to
price and product availability, but also with respect to service, variety and
availability of products carried, number of locations and promptness of service.
Many of the distributors with which the Company competes are regional or local
distributors. However, several of the Company's strongest competitors have
national and international distribution businesses. The Company also experiences
competition from


                                       3
<PAGE>   4


manufacturers, including some of the Company's suppliers, who may sell directly
to the industrial and end-user account base.

         EMPLOYEES - As of March 31, 2000, the Company had 2,481 employees. The
Company is not a party to any collective bargaining agreement, has had no
strikes or work stoppages and considers its employee relations to be excellent.

         (d) The Company distributes its products principally in the United
States and Canada. Export sales are not a significant portion of the Company's
sales.

ITEM 2.  PROPERTIES

         The Company owns the 87,000 square foot facility, located in Cleveland,
Ohio and the 106,000 square foot facility, located in Twinsburg, Ohio, that
houses its industrial electronics distribution center. The Company relocated
certain of its corporate offices to a 60,000 square foot facility located in
Mayfield Heights, Ohio, as to which the Company entered into an 11 year lease in
April 1999. The Company's operations occupy a total of approximately 1,343,000
square feet, with the majority, approximately 1,198,000 square feet, devoted to
product distribution facilities. Of the approximately 1,343,000 square feet
occupied, 226,000 square feet are owned and 1,117,000 square feet are occupied
under operating leases. The Company's facilities of 100,000 square feet or
larger, as of March 31, 2000, are set forth in the table below.

<TABLE>
<CAPTION>

                       TYPE OF                APPROXIMATE            LEASED OR               SEGMENT
LOCATION               FACILITY             SQUARE FOOTAGE             OWNED             USING FACILITY
- --------               --------             --------------           ---------           --------------
<S>                    <C>                   <C>                      <C>           <C>
Solon, Ohio            Distribution          174,000                  Leased        Industrial Electronics

Solon, Ohio            Distribution          224,600                  Leased           Computer Systems

Solon, Ohio            Distribution          102,500                  Leased        Industrial Electronics
                                                                                       and Computer Systems

Twinsburg, Ohio        Distribution          106,000                  Owned         Industrial Electronics
</TABLE>


         The Company's major leases contain renewal options for periods of up to
ten years. For information concerning the Company's rental obligations, see Note
4 (Leases) of Notes to Consolidated Financial Statements of the Company. The
Company believes that its distribution and office facilities are well maintained
and suitable for the operations of the Company.


                                       4
<PAGE>   5


ITEM 3.  LEGAL PROCEEDINGS

         As of March 31, 2000, the Company was not a party to any material
pending legal proceedings.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to a vote of the Company's security holders
during the last quarter of its fiscal year ended March 31, 2000.



                                       5
<PAGE>   6


         EXECUTIVE OFFICERS OF THE COMPANY (1)

         The name, age and positions of each executive officer of the Company as
of June 1, 2000 are as follows:

               Name               Age                   Position
               ----               ---                   --------
         James L. Bayman          63        Chairman of the Board of the Company
                                            since April 1, 1996 and Chief
                                            Executive Officer of the Company
                                            since April 3, 1995. President of
                                            the Company from June, 1984 to April
                                            29, 1997. Chief Operating Officer of
                                            the Company from June, 1984 to April
                                            3, 1995.

         Arthur Rhein             54        President and Chief Operating
                                            Officer of the Company since April
                                            29, 1997; Senior Vice President of
                                            the Company from 1993 to April 29,
                                            1997 and Vice President - Marketing
                                            of the Company from 1986 to 1993.

         Steven M. Billick        44        Senior Vice President and Chief
                                            Financial Officer of the Company
                                            since April 26, 2000.

         Thomas G. Pitera         45        President of the Company's
                                            Industrial Electronics Division
                                            since April 1, 1998.

         Lawrence N. Schultz      52        Secretary of the Company since 1999.
                                            Partner of the law firm of Calfee,
                                            Halter & Griswold LLP (2).

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

(1)  The description of Executive Officers called for in this Item is included
     pursuant to Instruction 3 to Section (b) of Item 401 of Regulation S-K.

(2)  The law firm of Calfee, Halter & Griswold LLP serves as counsel to the
     Company.

         There is no relationship by blood, marriage or adoption among the
above-listed officers. Messrs. Bayman, Rhein and Billick hold office until
terminated as set forth in their employment agreements. Mr. Schultz holds office
until his successor is elected by the Board of Directors.


                                       6
<PAGE>   7



                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

         The Company's Common Shares, without par value, are traded on the
Nasdaq National Market. Common Share prices are quoted daily under the symbol
"PIOS." The high and low sales prices for the Common Shares, the cash dividends
paid on the Common Shares and additional information for each quarter of the two
most recent fiscal years required by this Item are set forth at page 33 of the
Company's 2000 Annual Report to Shareholders, which information is incorporated
herein by reference.

         Cash dividends are payable quarterly upon authorization by the Board of
Directors. Regular payment dates are the first day of August, November, February
and May. The Company maintains a Dividend Reinvestment Plan whereby cash
dividends and a maximum of an additional $5,000 per month may be invested in the
Company's Common Shares at no commission cost.

         On April 27, 1999, the Company adopted a Common Share Purchase Rights
Plan. For further information about the Common Share Purchase Rights Plan, see
Note 8 (Shareholders' Equity) of Notes to Consolidated Financial Statements of
the Company.

ITEM 6.  SELECTED FINANCIAL DATA

         The information required by this Item is set forth at page 34 of the
Company's 2000 Annual Report to Shareholders, which information is incorporated
herein by reference.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

RESULTS OF OPERATIONS

FISCAL 2000 COMPARED WITH FISCAL 1999

CONSOLIDATED SALES

Fiscal 2000 was the 14th consecutive year of record sales and the 28th year in
the 29 years the Company has been public in which sales increased. Net sales for
the year ended March 31, 2000, of $2,550.7 million increased 13 percent over
sales of the prior year of $2,259.1 million. Both of the Company's segments
contributed to the increase in sales.

SEGMENT SALES

The Company's business is classified into two operating segments:


                                       7
<PAGE>   8


Computer Systems products include mid-range computer systems and high-end
platforms, storage subsystems, software, servers, personal computers, display
terminals and networking products.

Computer systems accounted for 48 percent of the Company's sales in fiscal 2000
compared with 50 percent a year ago. Sales of computer systems increased 8
percent in fiscal 2000.

Industrial Electronics products are comprised of semiconductors, and
interconnect, passive and electromechanical products. Semiconductors are the
building blocks of computer chips and include microprocessors, memory devices,
programmable logic devices, and analog and digital integrated circuits.
Interconnect, passive and electromechanical products are devices that move or
use an electrical signal and include capacitors, connectors, resistors,
potentiometers, switches and power conditioning equipment.

Industrial electronics accounted for 52 percent of sales in fiscal 2000 compared
with 50 percent a year ago. The increase in industrial electronics sales of 18
percent in fiscal 2000 is primarily attributable to the increased demand for
semiconductors from the Internet and communications markets.

GROSS MARGINS

Gross margin for the consolidated operations decreased to 15.5 percent for
fiscal 2000 from 15.6 percent in the prior year.

The gross margin for computer systems declined to 14.8 percent of sales in
fiscal 2000 from 16.4 percent a year ago. The decrease is primarily attributable
to continued pricing pressures within the market.

The gross margin for industrial electronics increased to 16.2 percent in fiscal
2000 from 14.8 percent a year ago. The increase is attributable primarily to the
industry's strengthening demand versus supply, positively impacting average
selling prices.

Management expects overall gross margin pressure to continue in the next fiscal
year.

OPERATING EFFICIENCIES

Warehouse, selling and administrative expenses for consolidated operations were
11.5 percent of sales in fiscal 2000, down from 11.8 percent of sales in the
prior year. During 2000, the improvements came from operating efficiencies,
coupled with the effects of cost controls.

Efficiencies were realized through improved employee productivity and working
capital management. Sales per employee increased to $1,038,000 from $879,000 in
1999, which represents a gain of approximately 18 percent. Accounts receivable
remained at 44 days in 2000. Inventory turnover of 6.1 times increased from 5.5
times in the prior year.


                                       8
<PAGE>   9


The resulting consolidated operating profit of $101.5 million was up 19 percent
from $84.9 million in 1999. Consolidated operating profit was 4.0 percent of
sales in 2000 compared with 3.8 percent of sales in 1999, reflecting the
operating expense improvement in fiscal 2000.

Operating profit margin for computer systems of 3.1 percent decreased from 4.4
percent in fiscal 1999 primarily due to pricing pressures.

Operating profit margin for industrial electronics increased to 4.8 percent from
3.1 percent in fiscal 1999 primarily because of the improvement in gross margin
due to increased demand in relationship to supply.

OTHER INCOME

In fiscal 2000, the Company recorded a pre-tax gain of $1.8 million related to
the sale and disposal of assets no longer required in the business.

INTEREST EXPENSE

Interest expense was $26.1 million, net of $0.8 million capitalized, in fiscal
2000 compared with $24.3 million a year ago. The increased interest expense is
primarily attributable to the additional debt to fund working capital and
capital expenditures needed to support the ongoing growth needs of the business.

TAXES

The effective tax rate for fiscal 2000 was 40.4 percent compared with 39.6
percent a year ago. The tax rate increase was primarily due to the unrecognized
tax benefits associated with the current year operating loss of the Company's
Canadian subsidiary.

NET INCOME

Primarily as a result of the factors noted above, the Company's net income for
fiscal 2000 reached a record high of $40.1 million, an increase of 30 percent,
or $9.3 million, over fiscal 1999 income of $30.8 million.

Diluted earnings per share for fiscal 2000 increased to $1.27 from $1.03 in the
previous year.


                                       9
<PAGE>   10


FISCAL 1999 COMPARED WITH FISCAL 1998

SALES

Fiscal 1999 consolidated net sales of $2,259.1 million in-creased 34 percent
over sales in the prior year of $1,685.3 million. The increase was primarily
attributable to higher sales volume of computer systems resulting from the
acquisition of Dickens Data Systems, Inc. ("Dickens") on March 31, 1998.
Including the sales of Dickens with the prior year on a pro forma basis, fiscal
1999 sales increased 10 percent compared with fiscal 1998.

Computer systems sales increased 68 percent in fiscal 1999 primarily due to
added sales resulting from the Dickens acquisition discussed above. This segment
accounted for 50 percent of sales in fiscal 1999 compared with 40 percent in the
prior year.

Industrial electronics net sales increased 12 percent in fiscal 1999 primarily
attributable to the increased sales of the high-volume, low-margin semiconductor
products.

GROSS MARGINS

The fiscal 1999 consolidated gross margin of 15.6 percent decreased from 17.7
percent in the prior year. Both operating segments experienced declines in gross
margin in fiscal 1999 as described below.

Computer systems gross margin decreased to 16.4 percent from 18.7 percent
primarily due to the Dickens sales earning a lower gross margin compared with
the other computer systems sales. The gross margin for industrial electronics
declined to 14.8 percent in fiscal 1999 from 17.1 percent in 1998. The decrease
was attributable primarily to the increase in sales of high-volume, low-margin
products and to the industry's excess semiconductor supply versus demand.

OPERATING EFFICIENCIES

Warehouse, selling and administrative consolidated expenses were 11.8 percent of
sales in fiscal 1999 and 13.4 percent in 1998. During 1999, gains resulted from
improvements due to leveraging expenses on higher sales volume, coupled with the
effects of implementing cost controls.

Efficiencies were realized through improved employee productivity and inventory
turnover. Sales per employee increased to $879,000 from $766,000 in 1998.
Receivable collections were 44 days in 1999 and 1998. Inventory turnover of 5.5
times in 1999 increased from 4.4 times in the prior year.


                                       10
<PAGE>   11


The resulting consolidated operating profit of $84.9 million was up 16 percent
from $73.0 million in 1998. Consolidated operating profit was 3.8 percent of
sales in 1999 compared with 4.3 percent of sales in 1998, reflecting the gross
margin erosion in fiscal 1999 discussed above.

Computer systems operating profit as a percent of sales decreased to 4.4 percent
in 1999 from 5.4 percent in 1998, primarily due to the integration of Dickens.

Industrial Electronics operating profit as a percent of sales declined to 3.1
percent in 1999 from 3.6 percent in 1998 primarily due to the gross margin
erosion from the excess capacity in the semiconductor industry.

INTEREST EXPENSE

Interest expense was $24.3 million in fiscal 1999 compared with $20.7 million in
fiscal 1998. The increased interest expense is attributable to additional debt
incurred to fund working capital and capital expenditure requirements necessary
to support the ongoing growth needs of the business, as well as the effect of
the acquisition of Dickens.

TAXES

The effective tax rate was 39.6 percent for fiscal 1999 compared with 41.4
percent in fiscal 1998. The tax rate decrease was primarily due to the
utilization of the operating loss carryforward of the Canadian subsidiary and
lower effective state tax rates.

NET INCOME

Primarily as a result of the factors noted above, the Company reported net
income for fiscal 1999 of $30.8 million - an increase of $0.3 million, or 1
percent over fiscal 1998 net income of $30.5 million.

Diluted earnings per share for fiscal 1999 decreased to $1.03 from $1.14 in the
previous year. The average diluted shares outstanding increased to 35.7 million
in fiscal 1999 from 26.9 million the prior year primarily due to the issuance of
convertible trust preferred securities a year ago.

RISK CONTROL

The Company has assets, liabilities and cash flows in foreign currencies
creating foreign exchange risk with the primary foreign currency being the
Canadian dollar. Systems are in place for continuous measurement and evaluation
of foreign exchange exposures so that timely action can be taken when considered
desirable. Reducing exposure to foreign currency fluctuations is an integral
part of the Company's risk management program. Financial instruments in the form
of forward exchange contracts are employed as one of the methods to



                                       11
<PAGE>   12


reduce such risk. At March 31, 2000, one forward exchange contract in the amount
of $2.7 million existed with a maturity of 30 days. The foreign exchange
contracts have had an immaterial impact on the Company's results of operations
for the fiscal years ended 2000, 1999 and 1998.

The Company has entered into several interest rate swap agreements for purposes
of serving as a hedge of the Company's variable rate credit agreement
borrowings. The effect of the swaps is to establish fixed rates on the variable
rate debt and to reduce exposure to interest rate fluctuations. At March 31,
2000, the Company had interest rate swaps with a notional amount of $70 million.
Pursuant to these agreements, the Company pays interest at a weighted average
fixed rate of 5.47 percent. The weighted average LIBOR rates applicable to these
agreements were 6.11 percent at March 31, 2000. The swap agreements have had an
immaterial impact on the Company's results of operations for the fiscal years
ended 2000, 1999 and 1998.

The Company is exposed to interest rate risk from the revolving credit
facility's various floating rate pricing mechanisms. This interest rate exposure
is managed by the interest rate swaps to fix the interest rate on a portion of
the debt and the use of multiple maturity dates. If interest rates were to
increase 100 basis points (1 percent) from March 31, 2000 rates, and assuming no
changes in debt from March 31, 2000 levels, the additional annualized net
expense would be approximately $1.2 million or $.02 per diluted share.

The Company is exposed to credit loss in the event of nonperformance by the
other party to the derivative financial instruments. The Company limits this
exposure by entering into agreements with major financial institutions that meet
credit standards established by the Company and that are expected to satisfy
fully their obligations under the contracts.

The Company extends credit based on customers' financial conditions, and
generally, collateral is not required. The Company obtains credit insurance in
certain circumstances to protect its interests. Credit losses are provided for
in the financial statements when collections are in doubt.

Inflation has had a nominal effect on the Company's operations.

NEW ACCOUNTING STANDARDS

In 1998, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and
Hedging Activities," which requires all derivatives to be recognized on the
balance sheet at fair value. This statement is effective for fiscal years
beginning after June 15, 2000. Derivatives that are not hedges must be adjusted
to fair value through income. If the derivative is a hedge, depending on the
nature of the hedge, changes in the fair value of the derivative will either be
offset against the change in fair value of the hedged assets, liabilities or
firm commitments through earnings or recognized in other comprehensive income
until the hedged item is recognized in earnings. Management is in the process of
analyzing and assessing the impact of the adoption



                                       12
<PAGE>   13


of SFAS 133 on the Company's consolidated results of operations and financial
position. The Company must adopt the statement no later than April 1, 2001.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) 101, "Revenue Recognition in Financial Statements," which
summarizes the staff's views regarding the application of generally accepted
accounting principles to selected revenue recognition issues and is effective
January 1, 2001 for the Company. The Company is currently assessing the impact
SAB 101 will have on the Company's results of operations.

LIQUIDITY AND CAPITAL RESOURCES

Current assets including cash increased by $124.5 million and current
liabilities increased by $99.3 million for the year ended March 31, 2000,
resulting in an increase of $25.2 million of working capital. Increased sales in
the fourth quarter of fiscal 2000 compared with the same quarter a year ago, and
the weighting of sales within the fourth quarter resulted in increased current
asset needs. The increase in current liabilities is primarily attributable to
increased inventory funding requirements. The Company's current ratio was 2.7:1
at March 31, 2000, and 3.4:1 at year-end March 31, 1999.

The Company's revolving credit facility has a total capacity of $260.0 million,
all of which may be borrowed as of March 31, 2000 in accordance with
availability requirements which are subject to meeting certain minimum ratios.
As of March 31, 2000, $170.0 million was borrowed under the facility. A year
ago, such borrowings aggregated $160.0 million.

Capital expenditures were $36.0 million in fiscal 2000 compared with $22.2
million in 1999. This spending reflects ongoing initiatives designed to improve
efficiencies through computer enhancement of operating processes as well as
expanded facilities. Management estimates that capital expenditures will be in
the range of $25.0 million in fiscal 2001.

During fiscal 2000, the Company made additional investments in World Peace
Industrial Co. Ltd., Eurodis Electron PLC and two other investments in the
United States totaling $13.9 million. These investments further the Company's
growth strategy by offering access to an extensive distribution network in the
Asia-Pacific region, Europe and markets within the United States. Subsequent to
year end, in May 2000, the Company purchased a minority equity interest in
Magirus AG, a leading European computer systems distributor. Headquartered in
Stuttgart, Magirus employs more than 300 people in Germany, Austria, France,
Italy, Spain and Switzerland.

During fiscal 2000, total interest-bearing debt increased by $23.3 million. The
increase in debt is primarily attributable to funding working capital
requirements. The ratio of interest-bearing debt to capitalization was 43
percent at March 31, 2000 compared with 44 percent a year ago.

The Company believes that cash generated from operations and amounts available
under its credit facility are sufficient to fund its working capital and capital
expenditure requirements.


                                       13
<PAGE>   14


INFORMATION TECHNOLOGY SYSTEMS

The Company capitalized approximately $34.2 million in fiscal 1998 and 1999 in
connection with the acquisition and installation of an enterprise-wide
information technology "IT" system. Amounts representing approximately $11.5
million of these expenditures were operational in fiscal 1999 and $8.5 million
are planned to become operational in fiscal 2001. The balance of $14.2 million
represents work-in-process components which are not yet operational. The Company
is evaluating these components and presently has no reason to believe that they
will not become operational. In addition, management believes there would be no
material adverse effect on the financial condition or results of operations of
the Company should such components require further modification or replacement.
It is contemplated that implementation for completing the balance of the IT
system installation will commence in fiscal 2001.

YEAR 2000

The Company completed its year 2000 remediation efforts and, since the turn of
the century, has not experienced any significant problems internally or with
suppliers and customers in connection with this event. Nevertheless, there still
remain some future dates that could potentially cause computer system problems.
The Company continues to monitor these dates and address any necessary
remediation but does not anticipate any major impact on its operations.

OTHER EVENTS

On May 13, 1999, ProGen Technologies, Inc. "ProGen", one of the Company's major
customers, filed for protection under Chapter 11 of the U.S. Bankruptcy Code in
the Central District of the State of California. On June 18, 1999, ProGen made a
motion, which was granted, to convert its Chapter 11 proceeding to a Chapter 7
proceeding. At the time of the bankruptcy filing, ProGen owed the Company
approximately $9.3 million. The bankruptcy court has appointed a Trustee who has
proceeded with liquidation of the assets of ProGen. The Company continues to
assert its security interest and rights in the bankruptcy proceedings. At this
time, management believes, due to the Company's status in the bankruptcy
proceedings, any effects resulting from this matter will not have a material
adverse effect on the consolidated financial condition or results of operations
of the Company.

On February 11, 2000, the Company experienced a fire at its Twinsburg, Ohio
distribution center. This event affected approximately 3 percent of the
Company's inventory but caused no structural damage or major disruption. The
Company believes it has adequate insurance coverage to offset any property loss
or business impact resulting from the fire.



                                       14
<PAGE>   15


FORWARD-LOOKING INFORMATION

Portions of this report contain current management expectations which may
constitute forward-looking information. The Company's performance may differ
materially from that contemplated by such statements for a variety of reasons,
including, but not limited to: competition, dependence on the computer market,
inventory obsolescence and technology changes, dependence on key suppliers,
effects of industry consolidation, risks and uncertainties involving
acquisitions, instability in world financial markets, downward pressure on gross
margins, uneven patterns of inter-quarter and intra-quarter sales, and
management of growth of the business.

Competition

         The Company is a distributor in the industrial electronics and computer
systems industry, which has been highly competitive in recent years. The Company
faces intense competition in two major respects: in obtaining sources of supply
for the products distributed, and in developing relationships with customers. In
the case of semiconductor and computer systems products, the Company competes
for customers with other distributors as well as with some of its suppliers.
Some of the Company's competitors are larger and more established and have
greater financial and other resources, which may enable them to compete more
effectively. Also, it is possible that an increasing number of suppliers may
decide to distribute their products directly to the customer, which will
heighten competitive pressures further. Due to continuing competitive pressures,
the Company's gross margins have declined in recent years, and the Company
expects continued pressure on gross margins in the foreseeable future.

Softening in the Computer Network and Platform Market

         The Company distributes many products that are used in the manufacture
or configuration of mid-range computer systems and high-end platforms. The
technology used in these products has changed rapidly over the last several
years, resulting in short life cycles for these products. Because the Company's
customers have been forced to replace systems that have become technologically
obsolete in a relatively short period of time, the Company has experienced
substantial demand for these products that has contributed significantly to its
revenue growth. A slowdown in this market could have a substantial negative
effect on the Company's revenues and results of operations.

Fluctuations in Semiconductor Supply and Demand

         The semiconductor market historically has experienced fluctuations in
product supply and demand associated with technology changes and supply
capability occurring from time to time. At times when product supply has been
high relative to demand, prices for those products have declined. The Company
has attempted to minimize the effect of these price fluctuations in its
distribution arrangements. The Company's gross margins may nevertheless be
negatively affected if an excess supply of semiconductors causes a general
decline in prices for those products. If there is a shortage of semiconductor
supply, the Company's results of operations


                                       15
<PAGE>   16


will depend on how much product it is able to obtain from suppliers to sell and
how quickly the Company receives shipments of those products. There can be no
assurance that supply and demand fluctuations in the semiconductor market will
not have a material adverse effect on the Company's results of operations and
business.

Risks Related to Rapidly Changing Technology

          The Company's results of operations will depend in part on successful
management of the challenges of rapidly changing technology and evolving
industry standards characteristic of the market for industrial electronics and
computer systems products. These challenges include predicting the nature and
timing of technological changes and the direction of evolving industry
standards; identifying, obtaining and successfully marketing new products as
they emerge; and minimizing the risk of loss due to inventory obsolescence. Some
of the Company's competitors may be able to market products that have perceived
advantages over the products distributed by the Company or that render the
products distributed by the Company obsolete or more difficult to market.
Although the Company attempts to minimize the effects of inventory obsolescence
in its distribution arrangements, the Company may have high inventories of
unsold product if a new technology renders a product distributed by the Company
less desirable or obsolete. In addition, customers may be less willing, for
financial or other reasons, to purchase the new products necessary to use new
technologies.

Dependence on Key Suppliers

         During fiscal 2000 the Company's three largest suppliers accounted for
59 percent of total sales, with Compaq (including Digital Equipment
Corporation), IBM and Intel Corporation supplying 20 percent, 20 percent and 19
percent, respectively, of the Company's sales volume. Although the Company
believes that its relationships with suppliers are good, there can be no
assurance that the Company's suppliers will continue to supply products to the
Company on terms acceptable to the Company. The loss of any of the Company's
three top suppliers or a combination of other suppliers could have a material
adverse effect on the Company's business, results of operations and financial
condition.

Industry Consolidation

         The industrial electronics and computer systems products distribution
industry has become increasingly concentrated in recent years as companies have
combined or formed strategic alliances. If this trend continues, new business
combinations or strategic alliances may have a competitive advantage if their
potentially greater financial, technical, marketing or other resources allow
them to negotiate relationships with suppliers that are more favorable than the
Company's relationships with its suppliers. If such relationships develop, these
new business combinations or strategic alliances may be able to offer lower
prices that could precipitate an industry-wide decline in prices. This decline
would have a negative impact on the Company's gross margins, and could cause a
decline in the Company's revenues and loss of market share.

Risks Related to Growth through Acquisitions


                                       16
<PAGE>   17


         The Company constantly reviews acquisition prospects that would
complement its existing business, augment its market coverage or provide
opportunities to expand into new markets. The Company's continued growth depends
in part on its ability to find suitable acquisition candidates and to consummate
strategic acquisitions. If the consolidation trend in the industry continues,
the cost of completing acquisitions could increase significantly. To fund rising
acquisition costs, the Company may issue equity securities, which could dilute
the holdings of existing equity holders, or incur debt, which could reduce the
fixed charge ratio and result in overleveraging. These actions, and the
amortization of expenses related to goodwill and other intangible assets, could
have a material adverse effect on the Company's financial condition and results
of operations or the price of the Company's Common Shares. Furthermore,
acquiring businesses always entails risk and uncertainties. The Company's may
not be able to integrate the operations of the acquired businesses successfully,
and the failure to do so could have a material adverse impact on the Company's
business and results of operations.

Leverage

         At March 31, 2000, the Company's borrowings under a $260 million
revolving credit facility with National City Bank, Cleveland, Ohio, as agent for
itself and a syndicate of other lenders, totaled $170 million. In addition, the
Company issued $150 million principal amount of 8 1/2 percent Senior Notes due
2006 in August 1996. In March and April 1998, the Company's wholly owned
subsidiary, the Pioneer-Standard Financial Trust, issued a total of $143.7
million of 6 3/4 percent mandatorily redeemable convertible preferred
securities, which is an equity-related security. The sole assets of the
Pioneer-Standard Financial Trust are $148.2 million aggregate principal amount
of 6 3/4 percent Series A Junior Convertible Subordinated Debentures due March
31, 2028. The Company has executed a guarantee providing a full and
unconditional guarantee of the trust's obligations under the trust preferred
securities. As a consequence of the Company's obligations, a substantial portion
of its cash flow from operations must be dedicated to servicing these
obligations and will not be available for other purposes. Furthermore, the
Company's obligations may limit its ability to obtain additional financing in
the future for working capital, capital expenditures and acquisitions, and its
flexibility to react to changes in the industry and changing business and
economic conditions. The Company's ability to satisfy its existing obligations
will depend upon its future operating performance, which may be affected by
prevailing economic conditions and financial, business and other factors
described in this prospectus, many of which are beyond its control. The Company
currently anticipates that funds from current operations, available credit
facilities and access to capital markets will provide adequate funds to finance
capital spending and working capital needs and to service its obligations as
they become due. If the Company experiences difficulty in servicing its
obligations, the Company may have to reduce or delay capital expenditures, sell
assets, restructure or refinance its indebtedness or seek additional equity
capital. There can be no assurance that any of these strategies could be
effected on satisfactory terms, if at all.

Uneven Pattern of Quarterly Sales

         In the Company's recent experience, a disproportionate percentage of
quarterly sales have occurred in the last week or last day of the fiscal
quarter. This uneven sales pattern makes the prediction of revenues, earnings
and working capital for each financial period especially


                                       17
<PAGE>   18


difficult, and increases the risk of unanticipated variations in quarterly
results and financial condition. The Company believes that this pattern of sales
has developed as a result of several factors. One such factor is the recent
tendency of customers to delay purchases until the end of a quarter in the hope
of receiving more favorable pricing. Another factor is that customers may not be
able to determine until close to the end of their fiscal year whether there are
available funds in their capital budgets for the purchase of industrial
electronics and computer systems products. Although the Company is unable to
predict whether this uneven sales pattern will continue over the long term, the
Company anticipates that, for the foreseeable future, the majority of its sales
will continue to occur in the final days of the quarter.

Year 2000

         See the discussion above under the caption "Year 2000 Readiness
Disclosure."

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         The Company has assets, liabilities and cash flows in foreign
currencies creating foreign exchange risk with the primary foreign currency
being the Canadian dollar. Systems are in place for continuous measurement and
evaluation of foreign exchange exposures so that timely action can be taken when
considered desirable. Reducing exposure to foreign currency fluctuations is an
integral part of the Company's risk management program. Financial instruments in
the form of forward exchange contracts are employed as one of the methods to
reduce such risk. At March 31, 2000, one forward exchange contract in the amount
of $2.7 million existed with a maturity of 30 days. The foreign exchange
contracts have had an immaterial impact on the Company's results of operations
for the fiscal years ended 2000, 1999 and 1998.

         The Company has entered into several interest rate swap agreements for
purposes of serving as a hedge of the Company's variable rate credit agreement
borrowings. The effect of the swaps is to establish fixed rates on the variable
rate debt and to reduce exposure to interest rate fluctuations. At March 31,
2000, the Company had interest rate swaps with a notational amount of $70
million. Pursuant to these agreements, the Company pays interest at a weighted
average fixed rate of 5.47 percent. The weighted average LIBOR rates applicable
to these agreements were 6.11 percent at March 31, 2000. The swap agreements
have had an immaterial impact on the Company's results of operations for the
fiscal years ended 2000, 1999 and 1998.

         The Company is exposed to interest rate risk from the revolving credit
facility's various floating rate pricing mechanisms. This interest rate exposure
is managed by the interest rate swaps to fix the interest rate on a portion of
the debt and the use of multiple maturity dates. If interest rates were to
increase 100 basis points (1 percent) from March 31, 2000 rates, and assuming no
changes in debt from March 31, 2000 levels, the additional annualized net
expense would be approximately $1.2 million or $.02 per diluted share.


                                       18
<PAGE>   19


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The information required by this Item is set forth at pages 20 through
33 of the Company's 2000 Annual Report to Shareholders, which information is
incorporated herein by reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         None.


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information required by this Item as to the Directors of the Company
appearing under the caption "Election of Directors" in the Company's Proxy
Statement to be used in connection with the Company's 2000 Annual Meeting of
Shareholders to be held on July 25, 2000 (the "2000 Proxy Statement") is
incorporated herein by reference. Information required by this Item as to the
executive officers of the Company is included in Part I of this Annual Report on
Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

         The information required by this Item is set forth in the Company's
2000 Proxy Statement under the caption "Compensation of Executive Officers,"
which information is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by this Item is set forth in the Company's
2000 Proxy Statement under the caption "Share Ownership," which information is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Not applicable.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         (a) The following documents are filed as part of this Annual Report on
Form 10-K:

             (1) FINANCIAL STATEMENTS. The following consolidated financial
statements of the Company and its subsidiaries and the report of independent
auditors thereon, included in the


                                       19
<PAGE>   20


Company's 2000 Annual Report to Shareholders on pages 20 through 32, are
incorporated by reference in Item 8 of this Annual Report on Form 10-K:

         Consolidated Balance Sheets as of March 31, 2000 and 1999
         For the years ended March 31, 2000, 1999 and 1998:
                 Consolidated Statements of Income
                 Consolidated Statements of Shareholders' Equity
                 Consolidated Statements of Cash Flows
         Notes to Consolidated Financial Statements
         Report of Independent Auditors

             Quarterly financial data, included in the Company's 2000 Annual
Report to Shareholders at page 33, are incorporated by reference in Item 8 of
this Annual Report on Form 10-K.

             (2) FINANCIAL STATEMENT SCHEDULES. The following consolidated
financial statement schedule of the Company and its subsidiaries and the report
of independent auditors thereon are filed as part of this Annual Report on Form
10-K, and should be read in conjunction with the consolidated financial
statements of the Company and its subsidiaries included in the Company's 2000
Annual Report to Shareholders:

             Report of Independent Auditors

             Schedule II -- Valuation and Qualifying Accounts
                            for the years ended March 31, 2000, 1999 and 1998

             All other schedules have been omitted since the required
information is not present or not present in amounts sufficient to require
submission of the schedule, or because the information required is included in
the consolidated financial statements or the notes thereto.

             (3) EXHIBITS

             See the Index to Exhibits at page E-1 of this Form 10-K.

         (b) REPORTS ON FORM 8-K

             The Company did not file any reports on Form 8-K during the fourth
quarter of fiscal 2000.


                                       20
<PAGE>   21




                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Pioneer-Standard Electronics, Inc. has duly caused this
Annual Report of Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cleveland, State of Ohio, on June 29,
2000.

                                        PIONEER-STANDARD ELECTRONICS, INC.


                                        /s/ James L. Bayman
                                        ----------------------------------
                                        James L. Bayman
                                        Chairman, Chief Executive Officer
                                        and Director

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities as of June 29, 2000.

              SIGNATURE                                 TITLE


/s/ James L. Bayman                          Chairman, Chief Executive Officer
- ------------------------------------         and Director (Principal Executive
James L. Bayman                              Officer)

/s/ Arthur Rhein                             President, Chief Operating Officer
- ------------------------------------         and Director
Arthur Rhein

/s/ Steven M. Billick                        Chief Financial Officer
- ------------------------------------         (Principal Financial and Accounting
Steven M. Billick                            Officer)

/s/ Charles F. Christ                        Director
- ------------------------------------
Charles F. Christ

/s/ Victor Gelb                              Director
- ------------------------------------
Victor Gelb

/s/ Keith M. Kolerus                         Director
- ------------------------------------
Keith M. Kolerus

/s/ Thomas A. Commes                         Director
- ------------------------------------
Thomas A. Commes

/s/ Edwin Z. Singer                          Director
- ------------------------------------
Edwin Z. Singer

/s/ Thomas C. Sullivan                       Director
- ------------------------------------
Thomas C. Sullivan



                                       21

<PAGE>   22


/s/ Karl E. Ware                             Director
- ------------------------------------
Karl E. Ware




                                       22
<PAGE>   23

REPORT OF INDEPENDENT AUDITORS



Shareholders and the Board of Directors
Pioneer-Standard Electronics, Inc.

We have audited the consolidated financial statements of Pioneer-Standard
Electronics, Inc. as of March 31, 2000 and 1999, and for each of the three years
in the period ended March 31, 2000 and have issued our report thereon dated May
8, 2000, incorporated by reference in this Annual Report (Form 10-K). Our audits
also included the consolidated financial statement schedule of Pioneer-Standard
Electronics, Inc. as of March 31, 2000 and 1999 and for each of the three years
in the period ended March 31, 2000, listed in item 14(a) of this Annual Report
(Form  10-K). This schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.


/s/ Ernst and Young LLP

Cleveland, Ohio
May 8, 2000

                                       32
<PAGE>   24



                       PIONEER-STANDARD ELECTRONICS, INC.
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                    YEARS ENDED MARCH 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>
                                                                                  DEDUCTIONS
                                                BALANCE AT      CHARGED TO        (NET WRITE-
                                                BEGINNING OF    COST AND          OFFS)             BALANCE AT THE
                                                PERIOD          EXPENSES          NET RECOVERIES    END OF PERIOD
                                                ------------    ----------        --------------    --------------
<S>                                             <C>             <C>               <C>                 <C>
         2000

Allowance for doubtful accounts                 $6,035,000      $  3,269,000      $   (3,623,000)     $5,681,000

Inventory valuation reserve                     $5,397,000      $  3,786,000      $   (2,413,000)     $6,770,000


         1999

Allowance for doubtful accounts                 $7,798,000      $ (1,277,000)     $     (486,000)     $6,035,000

Inventory valuation reserve                     $5,661,000      $  3,157,000      $   (3,421,000)     $5,397,000


         1998

Allowance for doubtful accounts                 $7,541,000      $   (803,000)     $    1,060,000      $7,798,000

Inventory valuation reserve                     $6,659,000      $  2,031,000      $   (3,029,000)     $5,661,000
</TABLE>


<PAGE>   25



                       Pioneer-Standard Electronics, Inc.
                                  Exhibit Index



Exhibit No.                          Description
- -----------                          -----------

   3(a)        Amended Articles of Incorporation of Pioneer-Standard
               Electronics, Inc., which is incorporated by reference to Exhibit
               2 to the Company's Quarterly Report on Form 10-Q for the quarter
               ended September 30, 1997, as amended on March 18, 1998 (File No.
               0-5734).

   (b)         Amended Code of Regulations, as amended, of Pioneer-Standard
               Electronics, Inc., which is incorporated by reference to Exhibit
               3(b) to the Company's Annual Report on Form 10-K for the year
               ended March 31, 1997 (File No. 0-5734).

   4(a)        Rights Agreement, dated as of April 27, 1999, by and between the
               Company and National City Bank, which is incorporated herein by
               reference to Exhibit 1 to the Company's Registration Statement on
               Form 8-A ( (File No. 0-5734).

   (b)         (Reserved.)

   (c)         Note Purchase Agreement, dated as of October 31, 1990, by and
               between the Company and Teachers Insurance and Annuity
               Association of America, which is incorporated herein by reference
               to Exhibit 4.3 to the Company's Registration Statement on Form
               S-3 (Reg. No. 333-26697).

   (d)         Amendment No. 1 to Note Purchase Agreement, dated as of November
               1, 1991, by and between the Company and Teachers Insurance and
               Annuity Association of America, which is incorporated herein by
               reference to Exhibit 4(d) to the Company's Annual Report on Form
               10-K for the year ended March 31, 1993 (File No. 0-5734).

                                      E-1


<PAGE>   26


Exhibit No.                          Description
- -----------                          -----------

   (e)         Amendment No. 2 to Note Purchase Agreement, dated as of November
               30, 1995, by and between the Company and Teachers Insurance and
               Annuity Association of America, which is incorporated herein by
               reference to Exhibit 4(a) to the Company's Annual Report on Form
               10-K for the year ended March 31, 1996 (File No. 0-5734).

   (f)         Amendment No. 3 to Note Purchase Agreement, dated as of August
               12, 1996 by and between the Company and Teachers Insurance and
               Annuity Association of America, which is incorporated herein by
               reference to Exhibit 4(f) to the Company's Quarterly Report on
               Form 10-Q for the quarter ended June 30, 1996 (File No. 0-5734).

   (g)         Amendment No. 4 to Note Purchase Agreement, dated as of March 23,
               1998 by and between the Company and Teachers Insurance and
               Annuity Association of America, which is incorporated herein by
               reference to Exhibit 4(g) to the Company's Annual Report on Form
               10-K for the year ended March 31, 1998 (File No. 0-5734)..

   (h)         Amendment No. 5 to Note Purchase Agreement, dated as of March 23,
               1998 by and between the Company and Teachers Insurance and
               Annuity Association of America, which is incorporated herein by
               reference to Exhibit 4(h) to the Company's Annual Report on Form
               10-K for the year ended March 31, 1998 (File No. 0-5734).

   (i)         Amendment No. 6 to Note Purchase Agreement, dated as of March 31,
               1998 by and between the Company and Teachers Insurance and
               Annuity Association of America, which is incorporated herein by
               reference to Exhibit 4(i) to the Company's Annual Report on Form
               10-K for the year ended March 31, 1998 (File No. 0-5734).

   (j)         Indenture, dated as of August 1, 1996, by and between the Company
               and Star Bank, N.A., as Trustee, which is incorporated herein by
               reference to Exhibit 4(g) to the Company's Annual Report on Form
               10-K for the year ended March 31, 1997 (File No. 0-5734).


                                      E-2
<PAGE>   27


Exhibit No.                          Description
- -----------                          -----------

   (k)         Share Subscription Agreement and Trust, effective July 2, 1996,
               by and between the Company and Wachovia Bank of North Carolina,
               N.A., which is incorporated herein by reference to Exhibit 10.1
               to the Company's Registration Statement on Form S-3 (Reg. No.
               333-07665).

   (l)         Certificate of Trust of Pioneer-Standard Financial Trust, dated
               March 23, 1998, which is incorporated herein by reference to
               Exhibit 4(l) to the Company's Annual Report on Form 10-K for the
               year ended March 31, 1998 (File No. 0-5734).

   (m)         Amended and Restated Trust Agreement among Pioneer-Standard
               Electronics, Inc., as Depositor, Wilmington Trust Company, as
               Property Trustee and Delaware Trustee, and the Administrative
               Trustees named therein, dated as of March 23, 1998, which is
               incorporated herein by reference to Exhibit 4(m) to the Company's
               Annual Report on Form 10-K for the year ended March 31, 1998
               (File No. 0-5734).

   (n)         Junior Subordinated Indenture, dated March 23, 1998, between the
               Company and Wilmington Trust, as trustee, which is incorporated
               herein by reference to Exhibit 4(n) to the Company's Annual
               Report on Form 10-K for the year ended March 31, 1998 (File No.
               0-5734).

   (o)         First Supplemental Indenture, dated March 23, 1998, between the
               Company and Wilmington Trust, as trustee, which is incorporated
               herein by reference to Exhibit 4(o) to the Company's Annual
               Report on Form 10-K for the year ended March 31, 1998 (File No.
               0-5734).

   (p)         Form of 6 3/4% Convertible Preferred Securities (Included in
               Exhibit 4(m), which is incorporated herein by reference to
               Exhibit 4(p) to the Company's Annual Report on Form 10-K for the
               year ended March 31, 1998 (File No. 0-5734).

   (q)         Form of Series A 6 3/4% Junior Convertible Subordinated
               Debentures (Included in Exhibit 4(o)), which is incorporated
               herein by reference to Exhibit 4(q) to the Company's Annual
               Report on Form 10-K for the year ended March 31, 1998 (File No.
               0-5734).



                                      E-3

<PAGE>   28
Exhibit No.                            Description
- -----------                            -----------

   (r)         Guarantee Agreement, dated March 23, 1998, between the Company
               and Wilmington Trust, as guarantee trustee, which is incorporated
               herein by reference to Exhibit 4(r) to the Company's Annual
               Report on Form 10-K for the year ended March 31, 1998 (File No.
               0-5734).

   (s)         Agreement and Plan of Merger, dated as of January 15, 1998, by
               and among Dickens Data Systems, Inc., the Selling Shareholders
               named therein, Pioneer-Standard Electronics, Inc. and
               Pioneer-Standard of Georgia, Inc., which is incorporated herein
               by reference to Exhibit 2.1 to the Company's Current Report on
               Form 8-K for February 27, 1998 (File No. 0-5734). (Schedules
               omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company
               agrees to furnish supplementally a copy of any omitted schedule
               to the Commission upon request.)

  *10(a)       Retirement Agreement, effective March 31, 1996, by and between
               the Company and Preston B. Heller, Jr., which is incorporated
               herein by reference to Exhibit 10(a) to the Company's Annual
               Report on Form 10-K for the year ended March 31, 1996 (File No.
               0-5734).

   *(b)        Amended and Restated Employment Agreement, dated April 27, 1999,
               by and between the Company and James L. Bayman, which is
               incorporated herein by reference to Exhibit 10.1 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended June 30, 1999
               (File No. 0-5734).

   *(c)        Amended and Restated Employment Agreement, dated April 27, 1999,
               by and between the Company and Arthur Rhein, which is
               incorporated herein by reference to Exhibit 10.2 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended June 30, 1999
               (File No. 0-5734).

   *(d)        Employment Agreement, dated April 27, 1999, by and between the
               Company and Gregory T. Geswein, which is incorporated herein by
               reference to Exhibit 10.3 to the Company's Quarterly Report on
               Form 10-Q for the quarter ended June 30, 1999 (File No. 0-5734).



                                      E-4

<PAGE>   29


Exhibit No.                          Description
- -----------                          -----------

   *(e)        Amended and Restated Employment Agreement, dated April 27, 1999,
               by and between the Company and John V. Goodger, which is
               incorporated herein by reference to Exhibit 10.4 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended June 30, 1999
               (File No. 0-5734).

   *(f)        The Company's 1982 Incentive Stock Option Plan, as amended, which
               is incorporated by reference to Exhibit 3(e) to the Company's
               Annual Report on Form 10-K for the year ended March 31, 1997
               (File No. 0-5734).

   *(g)        The Company's Amended and Restated 1991 Stock Option Plan, which
               is incorporated herein by reference to Exhibit 4.1 to the
               Company's Form S-8 Registration Statement (Reg. No. 33-53329).

   *(h)        The Company's Amended 1995 Stock Option Plan for Outside
               Directors, which is incorporated herein by reference to Exhibit
               99.1 to the Company's Form S-8 Registration Statement (Reg. No.
               333-07143).

   (i)         Credit Agreement, dated as of March 27, 1998, among
               Pioneer-Standard Electronics, Inc., National City Bank, the
               several lending institutions party to the agreement and National
               City Bank, as Agent, which is incorporated herein by reference to
               Exhibit 10(j) to the Company's Annual Report on Form 10-K for the
               year ended March 31, 1998 (File No. 0-5734).

   (j)         First Amendment to Credit Agreement, dated as of May 1, 1998, by
               and among Pioneer-Standard Electronics, Inc., the several lending
               institutions party to the agreement and National City Bank, as
               Agent, which is incorporated herein by reference to Exhibit 10(k)
               to the Company's Annual Report on Form 10-K for the year ended
               March 31, 1998 (File No. 0-5734).

   (k)         Second Amendment to Credit Agreement, dated as of March 31, 1999,
               by and among Pioneer-Standard Electronics, Inc., the several
               lending institutions party to the agreement and National City
               Bank, as Agent, which is incorporated herein by reference to
               Exhibit 10(k) to the Company's Annual Report on Form 10-K for the
               year ended March 31, 1999 (File No. 0-5734).



                                      E-5
<PAGE>   30


Exhibit No.                           Description
- -----------                           -----------

   (l)         Third Amendment to Credit Agreement and Waiver, dated as of May
               5, 2000, by and among Pioneer-Standard Electronics, Inc., the
               several lending institutions party to the agreement and National
               City Bank, as Agent.

   (m)         Pioneer-Standard Electronics, Inc. 1999 Stock Option Plan for
               Outside Directors, which is incorporated herein by reference to
               Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for
               the quarter ended June 30, 1999 (File No. 0-5734).

   (n)         Pioneer-Standard Electronics, Inc. 1999 Restricted Stock Plan,
               which is incorporated herein by reference to Exhibit 10.6 to the
               Company's Quarterly Report on Form 10-Q for the quarter ended
               June 30, 1999 (File No. 0-5734).

   (o)         Pioneer-Standard Electronics, Inc. Supplemental Executive
               Retirement Plan.

   (p)         Pioneer-Standard Electronics, Inc. Benefit Equalization Plan.

   *(q)        Non-Competition Agreement, dated as of February 25, 2000, between
               Pioneer-Standard Electronics, Inc. and Thomas G. Pitera.

   *(r)        Change of Control Agreement, dated as of February 25, 2000,
               between Pioneer-Standard Electronics, Inc. and Thomas G. Pitera.

   *(s)        Form of Option Agreement between Pioneer-Standard Electronics,
               Inc. and the optionees under the Pioneer-Standard Electronics,
               Inc. 1999 Stock Option Plan for Outside Directors, which is
               incorporated herein by reference to Exhibit 10.7 to the Company's
               Quarterly Report on Form 10-Q for the quarter ended June 30, 1999
               (File No. 0-5734).

    13         Portions of the Company's 2000 Annual Report to Shareholders
               incorporated by reference into this Annual Report on Form 10-K.

    21         Subsidiaries of the Registrant.

    23         Consent of Ernst & Young LLP, Independent Auditors.



                                      E-6

<PAGE>   31


Exhibit No.                          Description
- -----------                          -----------

    27         Financial Data Schedule.

  99(a)        Certificate of Insurance Policy, effective November 1, 1997,
               between Chubb Group of Insurance Companies and Pioneer-Standard
               Electronics, Inc., which is incorporated herein by reference to
               Exhibit 99(a) to the Company's Annual Report on Form 10-K for the
               year ended March 31, 1998 (File No. 0-5734).

  99(b)        Forms of Amended and Restated Indemnification Agreement entered
               into by and between the Company and each of its Directors and
               Executive Officers, which are incorporated herein by reference to
               Exhibit 99(b) to the Company's Annual Report on Form 10-K for the
               year ended March 31, 1994 (File No. 0-5734).

- -----------------------
     *Denotes a management contract or compensatory plan or arrangement.



                                      E-7
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.L
<SEQUENCE>2
<FILENAME>ex10-l.txt
<DESCRIPTION>EXHIBIT 10(L)
<TEXT>

<PAGE>   1
                                                                   Exhibit 10(L)



                 THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER
                 ----------------------------------------------


         THIS THIRD AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this "Amendment")
is made as of May 5, 2000, by and among Pioneer-Standard Electronics, Inc., an
Ohio corporation, and its successors and assigns (the "Borrower"), National City
Bank, a national banking association, and the several banks, financial
institutions and other entities from time to time parties to the Credit
Agreement (as defined below) (sometimes collectively, "Lenders" and sometimes
individually, a "Lender"), and National City Bank, not individually, but as
"Agent." Capitalized terms used herein, and not otherwise defined herein, shall
have the meaning ascribed to those terms in the Credit Agreement (as defined
herein).

         WHEREAS, Borrower, the Lenders and Agent entered into that certain
Credit Agreement dated as of March 27, 1998, as amended by that certain First
Amendment to Credit Agreement, dated as of May 1, 1998, and that certain Second
Amendment to Credit Agreement, dated as of March 31, 1999 (collectively, the
"Original Credit Agreement");

         WHEREAS, Borrower, the Lenders and Agent are desirous of amending the
Original Credit Agreement on the terms and conditions hereinafter set forth; and

         WHEREAS, the Original Credit Agreement as modified by this Amendment
shall hereafter be the "Credit Agreement."

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Borrower, the Lenders and Agent agree as follows:

         1. The following definitions shall be inserted in Article I of the
Credit Agreement each in the appropriate alphabetical sequence:

         "Agreement for Wholesale Financing" means that certain Agreement for
Wholesale Financing, dated as of November 7, 1995, by and between Borrower and
DFS.

         "DFS" means Deutsche Financial Services Corporation.

         2. The definition of Consolidated Debt Service shall be deleted in its
entirety and the following inserted in lieu thereof:

         "Consolidated Debt Service" means, for any period, (a) Consolidated
Interest Expense for such period PLUS (b) the aggregate amount of scheduled
principal payments of Indebtedness (excluding any unaccelerated Indebtedness
arising under this Facility, the Convertible Debentures, the Agreement for
Inventory Financing and the Agreement for Wholesale Financing) required to be
made during such period by Borrower or any of its Subsidiaries.

         3. The definition of Consolidated Funded Debt shall be deleted in its
entirety and the following inserted in lieu thereof:

         "Consolidated Funded Debt" means as of any date of determination, all
Indebtedness for Borrowed Money of Borrower and its Subsidiaries outstanding at
such date

<PAGE>   2


(excluding Indebtedness arising under the Agreement for Inventory Financing, the
Agreement for Wholesale Financing and the Convertible Debentures), determined on
a consolidated basis in accordance with GAAP.

         4. The definition of Indebtedness for Borrowed Money shall be deleted
in its entirety and the following inserted in lieu thereof:

         "Indebtedness for Borrowed Money" means at any time, all Indebtedness
required by GAAP to be reflected as such on Borrower's balance sheet, including
as appropriate, all Indebtedness (i) in respect of any money borrowed (including
pursuant to this Agreement and debt incurred pursuant to or evidenced by the
Convertible Debentures or the Preferred Securities); (ii) under or in respect of
any Contingent Obligation (whether direct or indirect) of any money borrowed;
(iii) evidenced by any loan or credit agreement, promissory note, debenture,
bond, guaranty or other similar written obligation to pay money; (iv) arising
under the Agreement for Inventory Financing; (v) arising under the Agreement for
Wholesale Financing; and (vi) arising under Capitalized Leases.

         5. Section 2.4 of the Credit Agreement shall be deleted in its entirety
and the following inserted in lieu thereof:

         2.4 APPLICABLE MARGINS. On the Closing Date, the Applicable Margin
shall be determined using Tier I of the performance grid below until June 30,
1998. Thereafter, the Base Rate Applicable Margin and LIBOR Applicable Margin
shall be adjusted on the first day of each calendar quarter, beginning July 1,
1998, and on each October 1, January 1, April 1, and July 1, thereafter, based
on the ratio of Consolidated Funded Debt plus Indebtedness for Borrowed Money
arising under the Agreement for Inventory Financing and the Agreement for
Wholesale Financing as of the end of the quarter ending on March 31, 1998, and
on each June 30, September 30, December 31, and March 31, thereafter, to
Consolidated EBITDA for the most recent preceding four (4) fiscal quarters,
including the fiscal quarter ending on the date of determination. To the extent
that, as of an adjustment date, Borrower has not provided to Agent information
necessary to apply the performance grid, interest shall be payable retroactively
upon receipt of such information and calculation by Agent. In such event,
Borrower shall continue to pay interest at the interest rate and on the Payment
Dates in effect for the preceding quarter and the parties shall adjust for the
difference between interest payable and interest actually paid, when information
to apply the performance grid is available.



- --------------------------------------------------------------------------------
                                                                          Page 2

<PAGE>   3


<TABLE>
<CAPTION>
==========================================================================================
Tier            Consolidated Funded Debt        LIBOR +           Base      Facility Fee
                 plus Indebtedness for                            Rate
                Borrowed Money arising
                 under the Agreement for
                Inventory Financing and the
                 Agreement for Wholesale
                   Financing/EBITDA
- ------------------------------------------------------------------------------------------
<S>             <C>                             <C>               <C>            <C>
Tier I          Greater than 3.50x              112.5 bps*        0 bps          37.5
- ------------------------------------------------------------------------------------------
Tier II         Less than or equal to 3.50x     100.0 bps         0 bps          37.5
                but greater than 3.25x
- ------------------------------------------------------------------------------------------
Tier III        Less than or equal to 3.25x      87.5 bps         0 bps          37.5
                but greater than 3.00x
- ------------------------------------------------------------------------------------------
Tier IV         Less than or equal to 3.00x        75 bps         0 bps          37.5
                but greater than 2.75x
- ------------------------------------------------------------------------------------------
Tier V.         Less than or equal to 2.75x      62.5 bps         0 bps          37.5
                but greater than 2.50x
- ------------------------------------------------------------------------------------------
Tier VI         Less than or equal to 2.50x      62.5 bps         0 bps            25
                but greater than 2.25x
- ------------------------------------------------------------------------------------------
Tier VII        Less than 2.25x                  50.0 bps         0 bps            25
==========================================================================================
</TABLE>

* bps = basis points


         Notwithstanding anything contained in this Agreement to the contrary,
if at any time, or from time to time, Borrower is required to pay interest to
IBM Credit Corporation pursuant to the Agreement for Inventory Financing or DFS
pursuant to the Agreement for Wholesale Financing, then, during such period that
Borrower is required to pay such interest to IBM Credit Corporation or DFS, as
the case may be, the rate of interest to be paid on all outstanding Loans
hereunder will be equal to the greater of (i) the rate as determined pursuant to
this Agreement, and (ii) the rate of interest the Borrower is required to pay
IBM Credit Corporation or DFS, as applicable.

         6. Section 5.17 of the Credit Agreement shall be deleted in its
entirety and the following inserted in lieu thereof:

         5.17 ADDITIONAL INDEBTEDNESS AND FINANCIAL UNDERTAKINGS. Borrower will
not enter into or remain liable upon, any Financial Undertaking, nor will
Borrower incur Indebtedness for Borrowed Money. The prohibition in the preceding
sentence shall not apply to Indebtedness for Borrowed Money which is incurred
under or in connection with (a) this Agreement, (b) the Agreement for Inventory
Financing, provided that such Indebtedness which is incurred under the Agreement
for Inventory Financing shall not exceed $150,000,000, (c) the


<PAGE>   4


Convertible Debentures, (d) Indebtedness for Borrowed Money shown in Borrower's
December 31, 1997, financial statements, (e) Hedge Agreements that in the
aggregate, at any time, do not create an Aggregate Measured Credit Risk in
excess of $7,500,000), or (f) the Agreement for Wholesale Financing, provided
that such Indebtedness which is incurred under the Agreement for Wholesale
Financing shall not exceed $30,000,000. Borrower will not permit any of its
Subsidiaries to enter into or remain liable upon, any Financial Undertaking, nor
will Borrower permit any of its Subsidiaries to incur Indebtedness for Borrowed
Money (other than loans made by Borrower that do not exceed the amounts set
forth on Schedule 3 attached hereto).

         7. Section 5.33 of the Credit Agreement shall be deleted in its
entirety and the following inserted in lieu thereof:

         5.33 INVENTORY FINANCE LIMITATION. Borrower and its Subsidiaries shall
have a ratio of Consolidated Funded Debt plus Indebtedness for Borrowed Money
arising under the Agreement for Inventory Financing and the Agreement for
Wholesale Financing to Consolidated EBITDA of no greater than 4.75 to 1.0 on the
Closing Date, and on the last calendar day of each fiscal quarter thereafter,
until December 31, 1999; and no greater than 4.50 to 1.00 on the last calendar
day of each fiscal quarter thereafter, until December 31, 2000; and no greater
than 4.00 to 1.00 on the last calendar day of each fiscal quarter thereafter,
until December 31, 2001; and no greater than 3.75 to 1.0 on the last calendar
day of each fiscal quarter thereafter, until the Facility Termination Date. The
ratio of Consolidated Funded Debt plus Indebtedness for Borrowed Money arising
under the Agreement for Inventory Financing and the Agreement for Wholesale
Financing to Consolidated EBITDA shall be calculated for the most recent
preceding four fiscal quarters, including the fiscal quarter ending on the date
of determination and shall exclude any debt relating to the Convertible
Debentures or the securities sold pursuant to the Preferred Securities Offering.

         8. The following Sections shall be added to Article V of the Credit
Agreement:

         5.35 AGREEMENT FOR WHOLESALE FINANCING. As of the date hereof, and at
all times thereafter, Borrower shall perform and observe in all material
respects each term, covenant, and condition of the Agreement for Wholesale
Financing.

         5.36 LIENS TO DFS. In the event that Borrower or any Subsidiary
grants any Lien or security interest in favor of DFS, then Borrower and each
Subsidiary will grant a Lien in favor of Lenders on all of their assets, and
will deliver to Agent all documents, stock certificates, security agreements,
pledges, financing statements and other instruments or documents deemed
necessary or advisable by Agent to fulfill the requirements of this Section.
Without limiting Borrower's obligations under this Section, Borrower hereby
appoints Agent as its attorney-in-fact with irrevocable authority to execute
and deliver on behalf of Borrower, at any time after Borrower grants a Lien or
security interest in favor of DFS, all documents, stock certificates, security
agreements, pledges, financing statements and other instruments or documents
deemed necessary or advisable by Agent to fulfill the requirements of this
Section.

         5.37 AMENDMENTS TO THE AGREEMENT FOR WHOLESALE FINANCING.
Notwithstanding anything in this Agreement or the Agreement for Wholesale
Financing to the



- --------------------------------------------------------------------------------
                                                                          Page 4
<PAGE>   5


contrary, Borrower shall not amend or modify the Agreement for Wholesale
Financing without the prior written approval of the Required Lenders.

         9. Section 6.6 of the Credit Agreement shall be deleted in its entirety
and the following inserted in lieu thereof:

         6.6 DEFAULTS ON INDEBTEDNESS. Failure of Borrower or any of its
Subsidiaries to pay any of its respective Indebtedness when due; or the default
by Borrower or any of its Subsidiaries in the performance of any term, provision
or condition contained in any agreement, or any other event shall occur or
condition exist which causes or permits any Indebtedness of Borrower or any of
its Subsidiaries to be due and payable or required to be prepaid (other than by
a regularly scheduled payment) prior to the stated maturity thereof, including,
without limitation, any default with respect to Indebtedness arising under the
Agreement for Wholesale Financing; provided, however, that it shall not be a
default under this SECTION 6.6 if (i) Borrower shall be in default with respect
to Indebtedness arising from Indebtedness other than Indebtedness for Borrowed
Money in an aggregate amount not exceeding Five Million Dollars ($5,000,000),
(ii) Borrower fails to pay the interest payable on the Convertible Debentures,
to the extent that such interest is deferable by the terms of the Convertible
Debentures, or (iii) Borrower shall be in default with respect to Indebtedness
arising under the Agreement for Inventory Financing; provided that if such
default causes any Indebtedness of Borrower or any of its Subsidiaries to be due
and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the stated maturity, then such default shall constitute a
default hereunder.

         10. Subject to Section 12 of this Amendment, the Lenders hereby waive
any default under the Credit Agreement for failure of Borrower to disclose the
existence of the Agreement for Wholesale Financing and the Indebtedness arising
thereunder, including but not limited to, defaults as a result of Borrower's
failure to satisfy the covenants described in Sections 4.9 (Accuracy of
Information), 5.17 (Additional Indebtedness and Financial Undertakings), 5.22
(Ratio of Debt to Cash Flow), 5.23 (Consolidated Fixed Charge Coverage Ratio),
5.24 (Current Ratio), 5.33 (Inventory Finance Limitation) and 6.4
(Representations and Warranties) for each period ending prior to the date
hereof.

         11. It shall be a condition precedent to the effectiveness of this
Amendment that Borrower shall furnished to Agent a true, correct and complete
copy of the Agreement for Wholesale Financing.

         12. Simultaneously with the execution hereof, Borrower shall pay to
Agent, for the account of the Lenders, all interest accrued under Section 2.4 of
the Credit Agreement from and after March 27, 1998, to and including the date
hereof, that remains unpaid because of the failure to include Indebtedness
existing pursuant to the Wholesale Financing Agreement in the calculations under
such Section. Borrower represents and warrants to Lenders that (a) the
calculations set forth on Exhibit A to this Amendment show the calculation of
the ratio of Consolidated Funded Debt (which shall include Indebtedness under
the Agreement for Wholesale Financing) plus Indebtedness for Borrowed Money
under the Agreement for



- --------------------------------------------------------------------------------
                                                                          Page 5

<PAGE>   6



Inventory Financing to Consolidated EBITDA for all fiscal quarters of Borrower
from and after March 27, 1998, and (b) the calculations on Exhibit A are true,
correct and complete.

         13. Borrower agrees that is shall terminate the Agreement for Wholesale
Financing prior to the date that is six (6) months from the date hereof. Failure
to satisfy this Section 13 shall be an Event of Default under the Credit
Agreement.

         14. This Amendment shall be deemed to form a part of and shall be
construed in connection with and as part of the Credit Agreement. Except as
hereinbefore expressly amended, all of the other terms, covenants and conditions
contained in the Credit Agreement shall continue to remain unchanged and in full
force and effect and are hereby ratified and confirmed.

        IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officers.


                                        PIONEER-STANDARD ELECTRONICS, INC.


                                        By:
                                           ----------------------------------
                                        Print Name:
                                        Title:


                                        NATIONAL CITY BANK,
                                            Individually and as Agent


                                        By:
                                           ----------------------------------
                                        Print Name: Anthony J. DiMare
                                        Title: Senior Vice President


                                        KEYBANK NATIONAL ASSOCIATION



                                        By: /s/ Brendan A. Lawlor
                                           ----------------------------------
                                        Print Name: Brendan Lawlor
                                        Title: Vice President



- --------------------------------------------------------------------------------
                                                                          Page 6

<PAGE>   7


                                        MELLON BANK, N.A.



                                        By: /s/ Charles H. Staub
                                           ----------------------------------
                                        Print Name: Charles H. Staub
                                        Title: First Vice President



                                        FIRSTAR BANK, N.A.



                                        By:
                                           -----------------------------------
                                        Print Name: John Barrett
                                        Title: Senior Vice President



                                        FIRSTAR BANK, N.A.



                                        By:
                                           ----------------------------------
                                        Print Name: Joseph Sooter
                                        Title: Vice President



                                        FIRST CHICAGO NBD



                                        By:
                                           ----------------------------------
                                        Print Name: Paul R. DeMelo
                                        Title: Vice President


                                        COMERICA BANK



                                        By:
                                           ----------------------------------
                                        Print Name: Jeffrey J. Judge
                                        Title: Vice President






- --------------------------------------------------------------------------------
                                                                          Page 7

<PAGE>   8



                                        MELLON BANK, N.A.



                                        By:
                                           ----------------------------------
                                        Print Name: Mark Johnston
                                        Title: Vice President


                                        FIRSTAR BANK, N.A.



                                        By: /s/ John D. Barrett
                                           ----------------------------------
                                        Print Name: John Barrett
                                        Title: Senior Vice President


                                        FIRSTAR BANK, N.A.



                                        By:
                                           ----------------------------------
                                        Print Name: Joseph Sooter
                                        Title: Vice President


                                        FIRST CHICAGO NBD



                                        By:
                                           ----------------------------------
                                        Print Name: Paul R. DeMelo
                                        Title: Vice President



                                        COMERICA BANK



                                        By:
                                           ----------------------------------
                                        Print Name: Jeffrey J. Judge
                                        Title: Vice President





- --------------------------------------------------------------------------------
                                                                          Page 7

<PAGE>   9




                                        MELLON BANK, N.A.



                                        By:
                                           ----------------------------------
                                        Print Name: Mark Johnston
                                        Title: Vice President


                                        FIRSTAR BANK, N.A.



                                        By:
                                           ----------------------------------
                                        Print Name: John Barrett
                                        Title: Senior Vice President


                                        FIRSTAR BANK, N.A.



                                        By: /s/ Joseph L. Sooter, Jr.
                                           ----------------------------------
                                        Print Name: Joseph Sooter
                                        Title: Vice President


                                        FIRST CHICAGO NBD



                                        By:
                                           ----------------------------------
                                        Print Name: Paul R. DeMelo
                                        Title: Vice President



                                        COMERICA BANK



                                        By:
                                           ----------------------------------
                                        Print Name: Jeffrey J. Judge
                                        Title: Vice President



- --------------------------------------------------------------------------------
                                                                          Page 7

<PAGE>   10




                                        MELLON BANK, N.A.



                                        By:
                                           ----------------------------------
                                        Print Name: Mark Johnston
                                        Title: Vice President


                                        FIRSTAR BANK, N.A.



                                        By:
                                           ----------------------------------
                                        Print Name: John Barrett
                                        Title: Senior Vice President


                                        FIRSTAR BANK, N.A.



                                        By:
                                           ----------------------------------
                                        Print Name: Joseph Sooter
                                        Title: Vice President


                                        FIRST CHICAGO NBD



                                        By: /s/ Paul R. DeMelo
                                           ----------------------------------
                                        Print Name: Paul R. DeMelo
                                        Title: Vice President



                                        COMERICA BANK



                                        By:
                                           ----------------------------------
                                        Print Name: Jeffrey J. Judge
                                        Title: Vice President



- --------------------------------------------------------------------------------
                                                                          Page 7

<PAGE>   11



                                        MELLON BANK, N.A.



                                        By:
                                           ----------------------------------
                                        Print Name: Mark Johnston
                                        Title: Vice President


                                        FIRSTAR BANK, N.A.



                                        By:
                                           ----------------------------------
                                        Print Name: John Barrett
                                        Title: Senior Vice President


                                        FIRSTAR BANK, N.A.



                                        By:
                                           ----------------------------------
                                        Print Name: Joseph Sooter
                                        Title: Vice President


                                        FIRST CHICAGO NBD



                                        By:
                                           ----------------------------------
                                        Print Name: Paul R. DeMelo
                                        Title: Vice President



                                        COMERICA BANK



                                        By: /s/ Jeffrey J. Judge
                                           ----------------------------------
                                        Print Name: Jeffrey J. Judge
                                        Title: Vice President



- --------------------------------------------------------------------------------
                                                                          Page 7

<PAGE>   12



                                        ABN-AMRO BANK, N.V.



                                        By: /s/ Richard R. DaCosta
                                           ----------------------------------
                                        Print Name: Richard R. DaCosta
                                        Title: Vice President



                                        By: /s/ Christopher L. Snider
                                           ----------------------------------
                                        Print Name: Christopher L. Snider
                                        Title: Assistant Vice President



                                        THE BANK OF NEW YORK


                                        By:
                                           ----------------------------------
                                        Print Name:
                                        Title:



                                        UNION BANK OF CALIFORNIA, N.A.


                                        By:
                                           ----------------------------------
                                        Print Name:
                                        Title:





- --------------------------------------------------------------------------------
                                                                          Page 8

<PAGE>   13



                                        ABN-AMRO BANK N.Y.



                                        By:
                                           ----------------------------------
                                        Print Name: Lee-Lee Miao
                                        Title: Group Vice President



                                        THE BANK OF NEW YORK



                                        By: /s/ David C. Judge
                                           ----------------------------------
                                        Print Name: David C. Judge
                                        Title: Senior Vice President



                                        UNION BANK OF CALIFORNIA, N.A.



                                        By:
                                           ----------------------------------
                                        Print Name: Michael Piken
                                        Title: Vice President





- --------------------------------------------------------------------------------
                                                                          Page 8

<PAGE>   14


                                        ABN-AMRO BANK N.Y.



                                        By:
                                           ----------------------------------
                                        Print Name: Lee-Lee Miao
                                        Title: Group Vice President



                                        THE BANK OF NEW YORK



                                        By:
                                           ----------------------------------
                                        Print Name:
                                        Title:



                                        UNION BANK OF CALIFORNIA, N.A.



                                        By: /s/ Michael Piken
                                           ----------------------------------
                                        Print Name: Michael Piken
                                        Title: Vice President





- --------------------------------------------------------------------------------
                                                                          Page 8
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.O
<SEQUENCE>3
<FILENAME>ex10-o.txt
<DESCRIPTION>EXHIBIT 10(O)
<TEXT>

<PAGE>   1

                                                                   Exhibit 10(o)








                       PIONEER-STANDARD ELECTRONICS, INC.
                       ----------------------------------

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                     --------------------------------------






































                                                       Effective: April 27, 1999
<PAGE>   2

                                TABLE OF CONTENTS
                                -----------------



ARTICLE       DESCRIPTION                                                PAGE
- -------       -----------                                                ----

   1          NAME AND PURPOSE                                           1-1

   2          DEFINITIONS                                                2-1

   3          ELIGIBILITY AND PARTICIPATION                              3-1

   4          ACCRUED ANNUAL RETIREMENT BENEFIT                          4-1

   5          ELIGIBILITY FOR RETIREMENT AND RELATED BENEFITS            5-1

   6          FORMS OF RETIREMENT BENEFITS                               6-1

   7          AMOUNT OF RETIREMENT BENEFITS                              7-1

   8          DEATH BENEFITS                                             8-1

   9          RIGHTS OF PARTICIPANTS AND BENEFICIARIES                   9-1

   10         TRUST                                                      10-1

   11         CLAIMS PROCEDURE                                           11-1

   12         ADMINISTRATION                                             12-1

   13         AMENDMENT AND TERMINATION                                  13-1

   14         PARTICIPATING COMPANIES                                    14-1

   15         MISCELLANEOUS                                              15-1
<PAGE>   3

                       PIONEER-STANDARD ELECTRONICS, INC.
                       ----------------------------------

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                     --------------------------------------


            This Plan is hereby adopted by Pioneer-Standard Electronics, Inc., a
corporation organized and existing under and by virtue of the laws of the State
of Ohio (hereinafter referred to as the "Company");



                              W I T N E S S E T H:
                              --------------------


            WHEREAS, the Company desires to establish the Pioneer-Standard
Electronics, Inc. Supplemental Executive Retirement Plan (hereinafter referred
to as the "Plan") in order to provide unfunded deferred compensation to certain
management and highly compensated employees;

            NOW, THEREFORE, the Company hereby adopts the Plan, effective
April 27, 1999, as follows:
<PAGE>   4

                                   ARTICLE 1

                                NAME AND PURPOSE
                                ----------------


            1.1. NAME. The name of this Plan shall be the PIONEER-STANDARD
ELECTRONICS, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN.

            1.2. PURPOSE. This Plan is hereby established to provide unfunded
deferred compensation to certain management and highly compensated employees of
the Participating Companies under certain conditions specified herein.

            1.3. PLAN FOR A SELECT GROUP. This Plan shall only cover Employees
of the Participating Companies who are members of a "select group of management
or highly compensated employees" within the meaning of Sections 201(2),
301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA. The Company shall have the
authority to take any and all actions necessary or desirable in order that this
Plan shall satisfy the requirements set forth in ERISA and regulations
thereunder applicable to plans maintained for Employees who are members of a
select group of management or highly compensated employees. Moreover, this Plan
at all times shall be administered in such a manner, and benefits hereunder
shall be so limited, notwithstanding any contrary provision of this Plan, in
order that this Plan shall constitute such a plan.

            1.4. NOT A FUNDED PLAN. It is the intention and purpose of the
Company that this Plan shall be deemed to be "unfunded" for tax purposes as well
as being such a plan as would properly be described as "unfunded" for purposes
of Title I of ERISA. This Plan shall be administered in such a manner,
notwithstanding any contrary provision of this Plan, in order that it will be so
deemed and would be so described.



                                       1-1
<PAGE>   5

                                   ARTICLE 2

                                  DEFINITIONS
                                  -----------


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

            2.1. ACCRUED ANNUAL RETIREMENT BENEFIT. The words "Accrued Annual
Retirement Benefit" shall mean an amount determined in accordance with the
provisions of Article 4 hereof.

            2.2. ACTUARIAL EQUIVALENT. The words "Actuarial Equivalent" shall
mean the benefit having the same value as the benefit which the Actuarial
Equivalent replaces. The determination of an Actuarial Equivalent shall be based
on the following:

                 (a) one of the following mortality tables, as applicable:

                     (i)   with respect to forms of benefits other than single
                           sum payments, the UP-1984 Mortality Table; in
                           determinations where it is necessary to determine
                           factors in conjunction with a joint Beneficiary, such
                           Beneficiary's actual age is set back three (3) years
                           prior to factor determination; or

                     (ii)  with respect to single sum payments, the 1983 Group
                           Annuity Mortality Table or such successor table as
                           shall be prescribed from time to time by the
                           Secretary of the Treasury under Section
                           417(e)(3)(A)(ii)(I) of the Code; and

                 (b) one of the following rates of interest, as applicable:

                     (i)   with respect to forms of benefits other than single
                           sum payments, seven and one-half percent (7.5%); or

                     (ii)  with respect to single sum payments, the GATT
                           Interest Rate for the month of November immediately
                           preceding the Plan Year that contains the date of
                           payment of the single sum.

            For purposes of this Section, the words "GATT Interest Rate" shall
mean, for any month, the "applicable interest rate," as such term is defined by
Section 417(e)(3) of the Code,



                                      2-1
<PAGE>   6

for such month (generally, the annual interest rate on 30-year Treasury
securities for that month as specified by the Commissioner of the Internal
Revenue Service).

            2.3. ADMINISTRATOR. The word "Administrator" shall mean the person
or persons, corporation or partnership designated as Administrator under Article
12 hereof.

            2.4. ADOPTION DATE. The words "Adoption Date" shall mean the date as
of which any Participating Company shall have adopted the Plan.

            2.5. AFFILIATED COMPANY. The words "Affiliated Company" generally
shall mean any corporation or business organization that, directly or
indirectly, through one or more intermediaries controls, is controlled by, or is
under common control with the Company, and particularly shall mean any
corporation of which eighty percent (80%) of the voting stock is directly or
indirectly owned by the Company.

            2.6. ANNUAL INCENTIVE COMPENSATION PLAN. The words "Annual Incentive
Compensation Plan" shall mean an arrangement used to provide annual incentive
compensation to employees of the Participating Companies, whether set forth in a
plan, contained in individual employment agreements or otherwise.

            2.7. APPEALS COMMITTEE. The words "Appeals Committee" shall mean the
Appeals Committee established pursuant to Article 11 hereof.

            2.8. BENEFICIARY. The word "Beneficiary" shall mean any Surviving
Spouse or other spouse who receives or is eligible to receive payment of any
benefit under the terms of this Plan on the death of a Participant or former
Participant.

            2.9. BENEFIT COMMENCEMENT DATE. The words "Benefit Commencement
Date" shall mean:

                 (a) the first day of the first period for which an amount is
                     payable as an annuity; or




                                      2-2
<PAGE>   7

                 (b) in the case of a benefit not payable in the form of an
                     annuity, the first date as of which benefits are to be paid
                     pursuant to the terms of this Plan.

            2.10. BENEFIT EQUALIZATION PLAN. The words "Benefit Equalization
Plan" shall mean the Pioneer-Standard Electronics, Inc. Benefit Equalization
Plan.

            2.11. BOARD. The word "Board" shall mean the Board of Directors of
the Company.

            2.12. BREACH OF THE RESTRICTIVE COVENANTS. The words "Breach of the
Restrictive Covenants" shall mean, during a Participant's employment with the
Company or any Affiliated Company or thereafter, during the term of any written
agreement between the Company or Affiliated Company and the Participant dealing
with noncompetition, nonsolicitation, noninterference, confidentiality or
similar matters, the breach of such agreement by the Participant as reasonably
determined by the Compensation Committee in good faith, but only if such breach
is not remedied within thirty (30) days following actual written notification of
such breach by the Compensation Committee to the Participant.

            2.13. CAUSE. The word "Cause" shall mean for purposes of this Plan:

                  (a) a Participant's Termination of Employment shall have been
                      the result of his conviction of any of the following:
                      (i) embezzlement; (ii) misappropriation of money or other
                      property of the Company or any Affiliated Company; or
                      (iii) any felony;

                  (b) a Breach of the Restrictive Covenants; or

                  (c) a Participant's failure, during his employment with the
                      Company or any Affiliated Company, to devote his full time
                      and undivided attention during normal business hours to
                      the business and affairs of the Company or any Affiliated
                      Company, except for reasonable vacations and for illness
                      or incapacity; provided, however, that the 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



                                      2-3
<PAGE>   8

                      interfere with the regular performance of his duties and
                      responsibilities of employment.

            2.14. CHANGE OF CONTROL. The words "Change of Control" shall mean
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 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 Securities Exchange Act of
                      1934 ("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) 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;

                  (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
                      (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.



                                      2-4
<PAGE>   9

            2.15. CODE. The word "Code" shall mean the Internal Revenue Code of
1986, as amended, and any 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.

            2.16. COMPANY. The word "Company" shall mean Pioneer-Standard
Electronics, Inc. and any successor corporation or business organization which
shall assume the duties and obligations of Pioneer-Standard Electronics, Inc.
under this Plan.

            2.17. COMPENSATION COMMITTEE. The words "Compensation Committee"
shall mean the Compensation Committee of the Board or any successor thereto.

            2.18. CONTINUOUS SERVICE. The words "Continuous Service" shall mean
for any Participant any period during which he is or was employed by any
Participating Company or Affiliated Company, including any periods of
Disability. Each such period shall be measured from the Participant's date of
hire (which date shall be considered to be the first day during which the
Participant performs any service for any Participating Company or Affiliated
Company for which the Participant is directly or indirectly compensated) until
the date of Termination of Employment which follows such date of hire.

            In addition, if any Participant has a Termination of Employment and
is rehired within twelve (12) months of:

                  (a) the date of his Termination of Employment; or

                  (b) if earlier, the first day of any period of leave of
                      absence, layoff or Military Service after the end of which
                      the Employee did not return to work for a Participating
                      Company or an Affiliated Company prior to his Termination
                      of Employment;

such Participant's Continuous Service shall include the period of severance
measured from his Termination of Employment until his subsequent date of rehire.
Two or more such periods that



                                      2-5
<PAGE>   10

contain fractions of a year (computed in months and days) shall be aggregated on
the basis of twelve (12) months constituting a year and thirty (30) days
constituting a month.

            If a Participant shall be entitled to Continuous Service for a
period of Disability, such entitlement shall cease on the first to occur of:

                      (i)   cessation of the Participant's Disability;

                      (ii)  cessation of the Participant's entitlement to
                            benefits under the Participating Company's long term
                            disability plan; or

                      (iii) the Participant's commencement of benefits under
                            this Plan.

            In the event that a business organization shall be or shall have
been acquired by or merged into a Participating Company, the date of hire of
each Participant who is or was an employee of such business organization on the
date of acquisition shall be deemed to have been the most recent date he was
hired by such business organization unless another date is designated by the
Compensation Committee.

            2.19. COVERED COMPENSATION. The words "Covered Compensation" shall
mean, with respect to any Participant, the sum of (a) plus (b) below where:

                  (a) equals his salary from any Participating Company; and

                  (b) equals amounts payable to him under any Annual Incentive
                      Compensation Plan;

and where (a) and (b) are payable to such Participant for services rendered to a
Participating Company while a Participant or prior thereto; provided, however,
that to the extent the Compensation Committee considers it appropriate,
compensation or remuneration payable to a Participant for services rendered to
an Affiliated Company shall be taken into account in determining his Covered
Compensation. A Participant's Covered Compensation will not be reduced by any of
the following:



                                      2-6
<PAGE>   11

                      (i)   amounts which are excluded from taxable income under
                            Code Sections 125, 402(e)(3) and 402(h); and

                      (ii)  amounts which are excluded from taxable income
                            because they are deferred by the Participant under
                            the Benefit Equalization Plan or another similar
                            plan.

Covered Compensation shall, however, not include fringe or special benefits or
perquisites, or matching or employer contributions under any benefit plan of any
Participating Company or Affiliated Company.

            Finally, a Participant's Covered Compensation with respect to a
Fiscal Year shall be that Covered Compensation which is earned for such Fiscal
Year, without regard to when such Covered Compensation is actually paid to the
Participant.

            2.20. DIRECTOR. The word "Director" shall mean a member of the
Board.

            2.21. DISABILITY. The word "Disability" shall mean, with respect to
any Participant, a medically determinable physical or mental impairment which
qualifies the Participant to receive benefits under the Participating Company's
long term disability plan, or which would qualify the Participant to receive
benefits under the Participating Company's long term disability plan had he been
covered by said 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 ss.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 ss.12114; or

                  (c) resulted from any intentionally self-inflicted injury.



                                      2-7
<PAGE>   12

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

            2.22. EARLY RETIREMENT DATE. The words "Early Retirement Date" shall
mean the date on which a Participant attains the later of age fifty-five (55) or
seven (7) years of Continuous Service.

            2.23. EFFECTIVE DATE. The words "Effective Date" shall mean the date
this Plan became effective, which date is April 27, 1999.

            2.24. EMPLOYEE. The word "Employee" shall mean any common-law
employee of any Participating Company or Affiliated Company, whether or not an
officer or Director, but excluding any person serving only in the capacity of a
Director.

            2.25. ERISA. The acronym "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended, and any regulations or other
pronouncements promulgated thereunder. Whenever a reference is made herein to a
specific ERISA Section, such reference shall be deemed to include any successor
ERISA Section having the same or a similar purpose.

            2.26. FINAL AVERAGE ANNUAL EARNINGS. The words "Final Average Annual
Earnings" shall mean the quotient of (a) divided by (b), where:

                  (a) equals the total amount of a Participant's Covered
                      Compensation for each of the three (3) Fiscal Years for
                      which the Participant's Covered Compensation was highest
                      out of the five (5) consecutive Fiscal Years ending with
                      the Fiscal Year in which the earlier of his date of
                      Termination of Employment or the date he ceased to be a
                      Senior Executive occurs; and

                  (b) equals three (3);

provided, however, that if a Participant has less than three (3) full Fiscal
Years of such employment, his Final Average Annual Earnings shall mean the total
amount of his Covered



                                      2-8
<PAGE>   13

Compensation for each full calendar month of such employment, divided by the
number of full calendar months of such employment and multiplied by twelve (12).
The Final Average Earnings of a Participant who becomes disabled shall be
calculated as of the date of the determination of his Disability.

            2.27. FISCAL YEAR. The words "Fiscal Year" shall mean the twelve
(12) month period ending on March 31 in each calendar year.

            2.28. MILITARY SERVICE. The words "Military Service" shall mean duty
in the Armed Forces of the United States, whether voluntary or involuntary,
provided that the Employee serves not more than one voluntary enlistment or tour
of duty and further provided that such voluntary enlistment or tour of duty does
not follow involuntary duty. To the extent required by law, this Plan shall be
administered in compliance with the Uniformed Services Employment and
Reemployment Rights Act of 1994.

            2.29. NORMAL RETIREMENT DATE. The words "Normal Retirement Date"
shall mean the date on which a Participant attains age sixty-five (65).

            2.30. PARTICIPANT. The word "Participant" shall mean any eligible
Senior Executive who has performed all the acts required by this Plan to become
a Participant, who has become a Participant in accordance with Article 3 hereof,
and who remains a Participant hereunder. A Participant shall cease to be a
Participant and shall become a former Participant, upon the earliest of his
Termination of Employment, the date he ceases to be designated by the
Compensation Committee as eligible to participate, the date he ceases to be
employed by a Participating Company or the date he ceases to accrue benefits
under this Plan. However, the word "Participant" may also include, where the
context indicates, any former Participant in this Plan.



                                      2-9
<PAGE>   14

            2.31. PARTICIPATING COMPANY. The words "Participating Company" shall
mean the Company and any Affiliated Company which is or shall become a
Participating Company in the Plan pursuant to Article 14 hereof but only for
periods while it is a Participating Company herein.

            2.32. PLAN. The word "Plan" shall mean the Pioneer-Standard
Electronics, Inc. Supplemental Executive Retirement Plan as set forth herein,
effective as of the Effective Date, and as it may be later amended.

            2.33. PLAN YEAR. The words "Plan Year" shall mean the twelve (12)
month period ending on December 31 in each calendar year. The first Plan Year
shall be April 27, 1999 through December 31, 1999.

            2.34. PROFIT SHARING PLAN. The words "Profit Sharing Plan" shall
mean the Pioneer-Standard Electronics, Inc. Employees' Profit Sharing Retirement
Plan or any replacement plan or successor plan thereto.

            2.35. RETIREMENT. The word "Retirement" shall mean a Termination of
Employment of a Participant, whether voluntary or involuntary, on or after the
first to occur of his Early Retirement Date or Normal Retirement Date, for a
reason other than:

                  (a) his death; or

                  (b) for Cause;

            2.36. SENIOR EXECUTIVE. The words "Senior Executive" shall mean any
executive Employee who is a member of a select group of management or highly
compensated employees of any Participating Company within the meaning of
Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA. A Participant who
incurs a Disability at a time when he is a Senior Executive shall be deemed to
continue to be a Senior Executive during the period of his



                                      2-10
<PAGE>   15

Disability but only for such time as he is credited with Continuous Service. A
Participant shall automatically cease to be a Senior Executive on his date of
Termination of Employment.

            2.37. SURVIVING SPOUSE. The words "Surviving Spouse" shall mean the
individual to whom a Participant or former Participant had been married
throughout the twelve (12) month period ending on the date of the Participant's
or former Participant's death.

            2.38. TERMINATION DATE. The words "Termination Date" shall mean the
date as of which any Participating Company ceases to participate in the Plan.

            2.39. TERMINATION OF EMPLOYMENT. The words "Termination of
Employment" shall mean for any Employee the occurrence of any one of the
following events:

                  (a) he is discharged by a Participating Company or any
                      Affiliated Company unless he is subsequently reemployed
                      and given pay back to his date of discharge;

                  (b) he voluntarily terminates employment with a Participating
                      Company or any Affiliated Company;

                  (c) he retires from employment with a Participating Company or
                      any Affiliated Company;

                  (d) he fails to return to work at the end of any leave of
                      absence authorized by a Participating Company or any
                      Affiliated Company, or within ninety (90) days following
                      such Employee's release from Military Service or within
                      any other period following Military Service in which his
                      right to reemployment with a Participating Company or any
                      Affiliated Company is guaranteed by law; or

                  (e) he fails to return to work after the cessation of
                      disability income payments under any sick leave, short
                      term or long term disability program of a Participating
                      Company or any Affiliated Company.

            2.40. TRUST. The word "Trust" shall mean any trust that may be
established pursuant to Article 10 hereof.



                                      2-11
<PAGE>   16

            2.41. VESTED PERCENTAGE. The words "Vested Percentage" shall mean
for any Participant a percentage determined on the basis of his number of years
of Continuous Service in accordance with the following table:

            YEARS OF CONTINUOUS SERVICE              VESTED PERCENTAGE
            ---------------------------              -----------------

            Less than 3 years                               0%
            3 but less than 4 years                         30%
            4 but less than 5 years                         50%
            5 but less than 6 years                         70%
            6 but less than 7 years                         90%
            7 or more years                                 100%

Notwithstanding the foregoing, the Vested Percentage of a Participant shall
become one hundred percent (100%) upon the first to occur of the following
events:

                  (a) the Participant's attainment of his Early Retirement Date,
                      or Normal Retirement Date, while he is an Employee;

                  (b) the Participant's death while he is an Employee;

                  (c) the Participant's Termination of Employment due to his
                      Disability;

                  (d) the effective date of the termination of the Plan; or

                  (e) the date of a Change of Control.

However, notwithstanding any contrary provision of this Plan, regardless of a
Participant's Vested Percentage, his benefits hereunder shall at all times until
paid be forfeitable for Cause or Breach of the Restrictive Covenants.







                                      2-12

<PAGE>   17

                                   ARTICLE 3

                          ELIGIBILITY AND PARTICIPATION
                          -----------------------------

            3.1. ELIGIBILITY. The Compensation Committee may, from time to time,
in its discretion, designate one or more Senior Executives as eligible to
participate in this Plan; provided, however, that neither James L. Bayman nor
John V. Goodger shall be eligible to participate in this Plan.

            3.2. PARTICIPATION. Each Senior Executive who has satisfied the
eligibility requirements, set forth in Section 3.1 hereof, shall become a
Participant on or as of the date of his designation as a Senior Executive
eligible to participate in the Plan, or as soon thereafter as he reasonably can
be enrolled in the Plan, provided that he complies with appropriate
administrative requirements for enrollment of Participants, and shall remain a
Participant until the earlier of (a) the date of his Termination of Employment
or (b) the cessation of his Participant status pursuant to Section 3.3 hereof.

            3.3. CESSATION OF PARTICIPATION INITIATED BY THE COMPENSATION
COMMITTEE. In the event that the Compensation Committee determines, in its sole
discretion, that a Participant is not, or may not be, a member of a "select
group of management or highly compensated employees" within the meaning of
Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA, then the
Compensation Committee may, in its sole discretion, terminate such Participant's
participation in this Plan. In the event of such termination of participation:

                 (a) such Participant shall cease to accrue benefits hereunder;
                     and

                 (b) the Compensation Committee shall direct that such actions
                     shall be taken which, in its sole discretion, most closely
                     adhere to the terms of this Plan while not putting at risk
                     its status as a plan maintained for a "select group of
                     management or highly compensated employees" as referred to
                     above.


                                      3-1

<PAGE>   18



                                   ARTICLE 4

                        ACCRUED ANNUAL RETIREMENT BENEFIT
                        ---------------------------------

            4.1. AMOUNT OF ACCRUED ANNUAL RETIREMENT BENEFIT. A Participant's
Accrued Annual Retirement Benefit shall equal the remainder of (a) minus (b),
where:

                 (a) equals the product of (i) multiplied by (ii), below, where:

                     (i)   equals 3.3334% of his Final Average Annual Earnings
                           and

                     (ii)  equals his full years of Continuous Service,

                     provided that such product does not exceed 50% of Final
Average Annual Earnings; and

                 (b) equals the sum of the Actuarial Equivalent of (i), (ii),
                     (iii), and (iv), below, where:

                     (i)   equals the amounts contributed with respect to the
                           Participant by a Participating Company or an
                           Affiliated Company under the Profit Sharing Plan, or
                           any other tax qualified retirement plan maintained by
                           any Participating Company or Affiliated Company, as
                           profit sharing contributions, matching contributions,
                           or similar employer contributions;

                     (ii)  equals the amounts deemed contributed with respect to
                           the Participant by a Participating Company or an
                           Affiliated Company under the Benefit Equalization
                           Plan, or any other nonqualified deferred compensation
                           plan maintained by any Participating Company or
                           Affiliated Company, as deemed profit sharing
                           contributions, matching contributions, or similar
                           employer contributions;

                     (iii) equals the employer funded or financed accrued
                           benefit of the Participant under any tax qualified or
                           nonqualified defined benefit plan maintained by any
                           Participating Company or Affiliated Company; and

                     (iv)  equals fifty percent (50%) of the Participant's
                           Social Security retirement benefit payable at the
                           earliest age at which an unreduced retirement benefit
                           is payable to the Participant.



                                      4-1
<PAGE>   19

                                   ARTICLE 5

                 ELIGIBILITY FOR RETIREMENT AND RELATED BENEFITS
                 -----------------------------------------------

            5.1. NORMAL OR LATE RETIREMENT. A Participant who continues in the
employ of a Participating Company or an Affiliated Company until his Normal
Retirement Date shall be eligible to retire on or after such date and to receive
a retirement benefit hereunder, in such form as is provided in Article 6 hereof,
and in the amount provided in Article 7 hereof. The Benefit Commencement Date
for a Participant who retires from the employ of a Participating Company or an
Affiliated Company on or after his Normal Retirement Date shall be the date
which is thirty (30) days following his date of Retirement.

            5.2. EARLY RETIREMENT. A Participant who continues in the employ of
a Participating Company or an Affiliated Company until his Early Retirement Date
shall be eligible to retire on or after such date and to receive a retirement
benefit hereunder, in such form as is provided in Article 6 hereof, and in the
amount provided in Article 7 hereof. The Benefit Commencement Date for a
Participant who retires on or after his Early Retirement Date and prior to his
Normal Retirement Date shall, in the absence of an election of an earlier date
pursuant to Section 5.7 hereof, be his Normal Retirement Date.

            5.3. VESTED DEFERRED RETIREMENT. A Participant who continues in the
employ of a Participating Company or an Affiliated Company until he has
completed at least three (3) years of Continuous Service, or whose Vested
Percentage is otherwise greater than zero (0), but whose Termination of
Employment occurs prior to the earlier of his Early Retirement Date or his
Normal Retirement Date, shall be eligible to receive a vested deferred
retirement benefit hereunder, in such form as is provided in Article 6 hereof,
and in the amount provided in Article 7 hereof. The Benefit Commencement Date
for a former Participant eligible to receive a vested


                                      5-1
<PAGE>   20
deferred retirement benefit shall be his Normal Retirement Date, or if he has
completed seven (7) or more years of Continuous Service, such earlier date, if
any, as he may elect pursuant to Section 5.7 hereof.

            5.4. WITHDRAWAL RIGHT FOLLOWING CHANGE OF CONTROL. During the two
(2) year period following a Change of Control, a Participant may elect, in lieu
of his Accrued Annual Retirement Benefit hereunder, to withdraw, in the Single
Sum Form described in Section 6.3 hereof, the Actuarial Equivalent of his
Accrued Annual Retirement Benefit, subject to the following penalties:

                 (a) the Actuarial Equivalent of his Accrued Annual Retirement
                     Benefit shall be reduced by ten percent (10%); and

                 (b) upon such withdrawal the Participant's Accrued Annual
                     Retirement Benefit shall be cancelled and the Participant
                     shall no longer be eligible to participate in the Plan.

            5.5. APPLICATION. Each Participant who is eligible for a retirement
benefit or a withdrawal pursuant to this Article shall apply therefor, in
writing, on such form or forms as the Administrator shall prescribe in
accordance with the provisions of Article 6 hereof.

            5.6. FORFEITURE DUE TO CAUSE OR BREACH OF THE RESTRICTIVE COVENANTS.
Notwithstanding the foregoing provisions of this Article 5 to the contrary, upon
the Termination of Employment of a Participant for Cause, such Participant shall
forfeit his Accrued Annual Retirement Benefit and he shall thenceforth be
ineligible to participate in this Plan, and in no event shall he be entitled to
the receipt of any other benefit hereunder. Furthermore, upon any finding that a
Participant or former Participant has committed an act of Cause or a Breach of
the Restrictive Covenants, such Participant shall forfeit his Accrued Annual
Retirement Benefit and any future payments under the Plan shall be canceled.
Amounts previously paid shall not be recoverable. In the event of a disagreement
between the Participant and the Compensation


                                      5-2
<PAGE>   21

Committee as to whether a Participant's Termination of Employment was for Cause,
or whether there has been a Breach of the Restrictive Covenants, then,
notwithstanding any contrary provision of this Plan, payment of benefits
hereunder shall be delayed pending resolution of such disagreement pursuant to
the Plan's claims procedure.

            5.7. ELECTION OF EARLIER BENEFIT COMMENCEMENT DATE. Any Participant
who has at least seven (7) years of Continuous Service and who either:

                 (a) retires from the employ of a Participating Company or an
                     Affiliated Company on or after his Early Retirement Date
                     and prior to his Normal Retirement Date; or

                 (b) has a Termination of Employment prior to his Early
                     Retirement Date;

may elect in writing a Benefit Commencement Date earlier than the normal
applicable Benefit Commencement Date, provided that such earlier Benefit
Commencement Date shall not be a date prior to the later of his date of
Retirement or his Early Retirement Date. Any election of an earlier Benefit
Commencement Date shall be made by the Participant at least thirteen (13) months
prior to the such earlier Benefit Commencement Date. Such election shall be on a
form prescribed for the purpose by the Administrator and signed by the
Participant. Such election shall be deemed to be made when it shall have been
received by the Administrator or its representative. A Participant who is
electing an earlier Benefit Commencement Date may at any time at least thirteen
(13) months prior to such earlier Benefit Commencement Date:

                 (i) revoke an election previously made under this Section by
                     written notice duly filed with the Administrator or its
                     designated representative, in which event the Benefit
                     Commencement Date shall be deemed to be the normal Benefit
                     Commencement Date provided in Sections 5.2 or 5.3 hereof,
                     as applicable; or

                (ii) change his election by written notice and designation duly
                     made and filed with the Administrator or its designated
                     representative pursuant to this Section, provided that such
                     notice is received by the Administrator or its designated
                     representative at least thirteen


                                      5-3
<PAGE>   22

                     (13) months prior to the Benefit Commencement Date
                     specified in such notice and designation.



                                      5-4
<PAGE>   23



                                   ARTICLE 6

                          FORMS OF RETIREMENT BENEFITS
                          ----------------------------

            6.1. NORMAL FORMS. The normal form of retirement benefits payable to
a Participant who is eligible therefor pursuant to Article 5 hereof shall be:

                 (a) the Life Annuity Form (Form 1) described in Section 6.3
                     hereof if the Participant is not married on his Benefit
                     Commencement Date; or

                 (b) the Spouse's Annuity Form (Form 2) described in Section 6.3
                     hereof if the Participant is married on his Benefit
                     Commencement Date.

A Participant shall, prior to his Benefit Commencement Date, submit to the
Administrator satisfactory evidence of his age and, if he is married,
satisfactory evidence of his marriage and the age of his spouse.

            6.2. ELECTION OF OTHER FORMS. Subject to certain restrictions
described herein, in lieu of receiving his retirement benefits in accordance
with the normal form set forth in Section 6.1 hereof, a Participant or former
Participant who is eligible to receive retirement benefits pursuant to Article 5
hereof may elect, in writing, to receive his retirement benefits on the basis of
any other form of retirement benefits described in Section 6.3 hereof. Any
election of another form of retirement benefits shall be made by a Participant
at least thirteen (13) months prior to his Benefit Commencement Date. Any such
election may be revoked and made again any number of times as long as such
revocation and new election is made at least thirteen (13) months prior to his
Benefit Commencement Date.

                  Such election shall be on a form prescribed for the purpose by
the Administrator and shall be signed by the Participant. Such election shall be
deemed to be made when it shall have been received by the Administrator or its
designated representative. Satisfactory proof of


                                      6-1
<PAGE>   24

the age of the Participant's spouse will be required prior to the payment of
retirement benefits under Form 2, if applicable, or Form 3.

            6.3. FORMS. The forms of retirement benefits payable under this
Plan are as follows:

            FORM 1. LIFE ANNUITY FORM. A Participant who receives payment of his
retirement benefits under the Life Annuity Form shall receive an annuity
commencing on his Benefit Commencement Date and providing annual retirement
benefit payments during his life. No retirement benefits shall be payable after
the death of the Participant.

            FORM 2. SPOUSE'S ANNUITY FORM. A Participant who receives payment of
his retirement benefits under the Spouse's Annuity Form shall receive an annuity
commencing on his Benefit Commencement Date and providing annual retirement
benefit payments during his life, with the provision that after his death fifty
percent (50%) of his annual benefit shall continue during the life of and shall
be paid to the person who was his spouse on his Benefit Commencement Date.

            FORM 3. JOINT AND SURVIVOR FORM. A Participant who receives payment
of his retirement benefits under the Joint and Survivor Form shall receive an
annuity commencing on his Benefit Commencement Date and providing annual
retirement benefit payments during his life, with the provision that after his
death one hundred percent (100%) of his annual retirement benefit shall continue
during the life of and shall be paid to the person who was his spouse on his
Benefit Commencement Date.

            FORM 4. SINGLE SUM FORM. A Participant who receives payment of his
retirement benefits under the Single Sum Form shall receive a single sum payment
on his Benefit


                                      6-2
<PAGE>   25

Commencement Date in lieu of payments under Forms 1, 2, or 3. Notwithstanding
the foregoing, the Single Sum Form is available only:

                 (a) to a Participant in payment of a withdrawal pursuant to
                     Section 5.4 hereof following a Change of Control;

                 (b) to a Participant in payment of a distribution pursuant to
                     Section 13.2 hereof upon termination of the Plan;

                 (c) to a Surviving Spouse as a death benefit pursuant to
                     Section 8.2 hereof; or

                 (d) to a Participant:

                     (i)   if the benefit is being paid due to his Retirement on
                           or after his attainment of the first to occur of his
                           Early Retirement Date or Normal Retirement Date; and

                     (ii)  provided such payment is not made earlier than six
                           (6) months after his Termination of Employment.

The Single Sum Form shall not be payable to any Participant whose benefit is
payable due to his Vested Deferred Retirement pursuant to Section 5.3 hereof,
regardless of when payable.

            6.4. TERMS AND CONDITIONS OF FORMS. The forms of retirement benefits
described in Section 6.3 hereof shall be subject to the following conditions:

                     (a)   Except for payment of the Single Sum Form, retirement
                           benefits shall be paid annually on the first day of
                           the Plan Year.

                     (b)   Retirement benefits which are payable during the life
                           of a Participant or spouse of a Participant shall
                           commence on the date specified in this Plan, if such
                           person is then living, and shall end with the payment
                           made as of the first day of the Plan Year during
                           which such person shall die.

                     (c)   Regardless of the form of retirement benefits under
                           which a Participant was going to receive payment, if
                           a Participant shall die prior to his Benefit
                           Commencement Date, no retirement benefits shall be
                           payable to the spouse of the Participant under this
                           Article 6. Instead, benefits, if any, shall be
                           payable under Article 8.

                     (d)   If any Participant shall die after the commencement
                           of retirement benefit payments pursuant to a form
                           described in Section 6.3



                                      6-3
<PAGE>   26

                           hereof, his spouse shall receive such payment or
                           series of payments, if any, provided for under the
                           form of retirement benefits, commencing on the
                           first day of the Plan Year next following the Plan
                           Year during which the Participant shall have died.

                     (e)   If any Participant was to have received retirement
                           benefits under Form 2 or Form 3 and his spouse shall
                           die prior to his Benefit Commencement Date, then the
                           Participant shall receive his retirement benefits
                           under Form 1 unless, prior to his Benefit
                           Commencement Date, he remarries.

                     (f)   If any Participant is receiving retirement benefits
                           under Form 2 or Form 3 and his spouse shall die after
                           his Benefit Commencement Date, but prior to the death
                           of the Participant, such Participant shall continue
                           to receive the annual retirement benefits payable
                           under such form and no retirement benefits shall be
                           paid after the death of the Participant even though
                           he shall remarry prior to his death.

            6.5. REVOCATION OR MODIFICATION OF ELECTED FORMS. Any Participant
may at any time at least thirteen (13) months before his Benefit Commencement
Date:

                     (a)   revoke an election previously made under Section 6.2
                           hereof by written notice duly filed with the
                           Administrator or its designated representative in
                           which event the Participant shall be treated the same
                           as though his optional election had not been filed;
                           or

                     (b)   change his election from one to another of the forms
                           described in Section 6.3 hereof by written notice and
                           designation duly made and filed with the
                           Administrator or its designated representative
                           pursuant to Section 6.2 hereof.

            6.6. CONSENT NOT REQUIRED. No consent shall be required of a person
in order to elect another form of retirement benefits or to revoke such an
election.

            6.7. CORRECTION OF AMOUNTS PAYABLE. Anything contained in this
Article 6 to the contrary notwithstanding, if, after the Retirement or other
Termination of Employment of a Participant, the amount of retirement benefit
which would have been payable to him under this Plan is subject to any
deduction, change, offset or correction, then the amount payable to such


                                      6-4
<PAGE>   27

Participant and his spouse shall be adjusted to reflect any such deduction,
change, offset or correction.

            6.8. TIMING OF PAYMENTS. Payments under this Plan generally shall be
made as of the times specified elsewhere in this Plan. Notwithstanding the
foregoing provision of this Section and such other provisions to the contrary,
the requirement that a distribution commence on or before a particular date
shall not apply if the amount of payment required to be made on such date cannot
be ascertained by such date or the Administrator is unable to locate the
Participant after making reasonable efforts to do so, provided that, within
sixty (60) days after such amount can be ascertained or the Participant is
located, a payment is made retroactive to such date. This Section is not
intended to permit a Participant, former Participant or Beneficiary to elect to
defer payment beyond the dates otherwise provided therefor in this Plan.




                                      6-5
<PAGE>   28



                                   ARTICLE 7

                          AMOUNT OF RETIREMENT BENEFITS
                          -----------------------------

            7.1. ANNUAL AMOUNT PAYABLE UNDER FORM 1 AS A NORMAL OR LATE
RETIREMENT BENEFIT. The annual retirement benefit payable to a Participant who
is eligible therefor pursuant to Article 5 hereof and whose retirement benefit
commences on or after his Normal Retirement Date and is payable under Form 1
described in Section 6.3 hereof shall be equal to his Accrued Annual Retirement
Benefit.

            7.2. ANNUAL AMOUNT PAYABLE UNDER FORM 1 AS AN EARLY RETIREMENT OR
VESTED DEFERRED RETIREMENT BENEFIT. The annual retirement benefit payable to a
Participant who is eligible therefor pursuant to Article 5 hereof and whose
retirement benefit commences prior to his Normal Retirement Date and is payable
under Form 1 described in Section 6.3 hereof shall be equal to (a) reduced by
(b) where:


                 (a) is equal to such Participant's Accrued Annual Retirement
                     Benefit, multiplied by his Vested Percentage; and

                 (b) is equal to one from among (i), (ii) or (iii) below, where:

                     (i)   equals zero (0), i.e. there is no reduction, if his
                           Termination of Employment occurs on or after the
                           later of his Early Retirement Date or his attainment
                           of age sixty (60);

                     (ii)  equals one-half of one percent (0.5%) of the amount
                           determined under Subsection (a) above for each month
                           prior to his attainment of age sixty (60) that his
                           retirement benefits commence if his Termination of
                           Employment occurs prior to his attainment of age
                           sixty (60) but he has attained his Early Retirement
                           Date at the time of such Termination of Employment;
                           or

                     (iii) equals one-half of one percent (0.5%) of the amount
                           determined under Subsection (a) above for each month
                           prior to his Normal Retirement Date that his
                           retirement benefits commence if his Termination of
                           Employment


                                      7-1
<PAGE>   29

                           occurs prior to his attainment of the earlier of
                           his Early Retirement Date or his Normal Retirement
                           Date.

            7.3. AMOUNT PAYABLE UNDER OTHER FORMS. The annual retirement benefit
payable to a Participant, who is eligible therefor pursuant to Article 5 hereof
and whose retirement benefit is payable under a form of retirement benefits
described in Article 6 hereof other than Form 1, shall be a reduced amount so
that his retirement benefit is the Actuarial Equivalent of the retirement
benefit which he would have received under Section 7.1 or 7.2 hereof if his
retirement benefit were payable under Form 1.

            7.4. REHIRED PARTICIPANTS. If a former Participant who has received
or is entitled to a retirement benefit pursuant to this Plan shall become
reemployed by a Participating Company or an Affiliated Company, such Participant
shall immediately become a Participant again on the date he is reemployed and
shall have reinstated for purposes of this Plan, in lieu of the previously
determined retirement benefits, the Continuous Service and Accrued Annual
Retirement Benefit which he had at the time he retired or terminated his
employment. If any such Participant shall have already received or been
receiving retirement benefits hereunder, such retirement benefits shall cease
and the retirement benefits to which he shall be entitled on his subsequent
Termination of Employment, whether before or after his Normal Retirement Date,
shall be actuarially reduced for the amount of benefits he shall have received
prior to his reemployment.



                                      7-2
<PAGE>   30

                                   ARTICLE 8

                                 DEATH BENEFITS
                                 --------------

            8.1. DEATH ON OR AFTER BENEFIT COMMENCEMENT DATE. In the event of
the death of a Participant or former Participant on or after his Benefit
Commencement Date, there shall be paid to his Beneficiary, if any, the death
benefit, if any, provided under the form of retirement benefits under which such
Participant was receiving retirement benefits.

            8.2. DEATH PRIOR TO BENEFIT COMMENCEMENT DATE. In the event of the
death of a Participant while he is an Employee, or a former Participant who is
no longer an Employee and whose Vested Percentage is greater than zero (0), and
whose Benefit Commencement Date has not occurred, his Surviving Spouse, if any,
shall be entitled to receive a death benefit pursuant to this Section which
shall be paid as soon as reasonably practicable, but not later than sixty (60)
days following the death of the Participant.

            The death benefit shall be payable in the Single Sum Form described
in Section 6.3 hereof in an amount which is the Actuarial Equivalent of the
value of the survivor portion of the benefit otherwise payable in the Joint and
Survivor Form.

            Such survivor portion shall be the annual amount which such
Surviving Spouse would have received, as the Participant's survivor, if such
Participant had received a retirement benefit commencing on the later to occur
of:

                 (a) the day before his date of death; or

                 (b) the earliest day on which he could have received a
                     retirement benefit under this Plan if he had terminated his
                     employment on the day before his date of death;

under the Joint and Survivor Form described as Form 3 in Section 6.3 hereof.


                                      8-1
<PAGE>   31

                                   ARTICLE 9

                    RIGHTS OF PARTICIPANTS AND BENEFICIARIES
                    ----------------------------------------

            9.1. CREDITOR STATUS OF PARTICIPANT AND BENEFICIARY. This Plan
constitutes the unfunded, unsecured promise of the Participating Companies to
make benefit payments to each Participant and Beneficiary in the future and
shall be a liability solely against the general assets of the Participating
Companies. The Participating Companies shall not be required to segregate, set
aside or escrow any amounts for the benefit of any Participant or Beneficiary.
Each Participant and Beneficiary shall have the status of a general unsecured
creditor of the Participating Companies and may look only to the Participating
Companies and their general assets for payment of benefits under this Plan.

            9.2. RIGHTS WITH RESPECT TO A TRUST. Any Trust, and any assets held
thereby to assist the Participating Companies in meeting their obligations under
this Plan, shall in no way be deemed to controvert the provisions of Section 9.1
hereof.

            9.3. INVESTMENTS. In its sole discretion, the Company may acquire
(or direct the Participating Companies to acquire) insurance policies, annuities
or other financial vehicles for the purpose of providing future assets of the
Participating Companies to meet their anticipated liabilities under this Plan.
Such policies, annuities or other investments shall at all times be and remain
unrestricted general property and assets of the Participating Companies or
property of a Trust. Participants and Beneficiaries shall have no rights, other
than as general creditors, with respect to such policies, annuities or other
acquired assets.



                                      8-2
<PAGE>   32



                                   ARTICLE 10

                                      TRUST
                                      -----

            10.1. ESTABLISHMENT OF TRUST. Notwithstanding any other provision or
interpretation of this Plan, the Company may establish a Trust in which to hold
cash, insurance policies or other assets to be used to make, or reimburse the
Participating Companies for, payments to the Participants or Beneficiaries of
all or part of the benefits under this Plan. Any Trust assets shall at all times
remain subject to the claims of general creditors of the Participating Companies
in the event of their insolvency as more fully described in the Trust.

            10.2. OBLIGATIONS OF THE COMPANY. Notwithstanding the fact that a
Trust may be established under Section 10.1 hereof, the Company shall remain
liable for paying the benefits under this Plan. However, any payment of benefits
to a Participant or a Beneficiary made by such a Trust shall satisfy the
Company's obligation to make such payment to such person.

            10.3. TRUST TERMS. A Trust established under Section 10.1 hereof may
be revocable by the Company; provided, however, that such a Trust may become
irrevocable in accordance with its terms in the event of a Change of Control.
Such a Trust may contain such other terms and conditions as the Company may
determine to be necessary or desirable. The Company may terminate or amend a
Trust established under Section 10.1 hereof at any time, and in any manner it
deems necessary or desirable, subject to the preceding sentence and the terms of
any agreement under which any such Trust is established or maintained.




                                      10-1
<PAGE>   33

                                   ARTICLE 11

                                CLAIMS PROCEDURE
                                ----------------

            11.1. CLAIM FOR BENEFITS. Any claim for benefits under this Plan
shall be made in writing to the Administrator in such a manner as the
Administrator shall reasonably prescribe. The Administrator shall process each
such claim and determine entitlement to benefits within thirty (30) days
following its receipt of a completed application for benefits unless special
circumstances require an extension of time for processing the claim. If such an
extension of time for processing is required, written notice of the extension
shall be furnished to the claimant prior to the termination of the initial
thirty (30) day period. In no event shall such extension exceed a period of
thirty (30) days from the end of such initial period. The extension notice shall
indicate the special circumstances requiring an extension of time and the date
as of which the Administrator expects to render the final decision.

            If such a claim is wholly or partially denied by the Administrator,
the Administrator shall notify the claimant of the denial of the claim in
writing, delivered in person or mailed by first class mail to the claimant's
last known address. Such notice of denial shall contain:

                 (a) the specific reason or reasons for denial of the claim;

                 (b) a reference to the relevant Plan provisions upon which the
                     denial is based;

                 (c) a description of any additional material or information
                     necessary for the claimant to perfect the claim, together
                     with an explanation of why such material or information is
                     necessary; and

                 (d) an explanation of this Plan's claim review procedure.


                                      11-1
<PAGE>   34

If no such notice is provided, and if the claim has not been granted within the
time specified above for approval of the claim, the claim shall be deemed denied
and subject to review as described below. The interpretations, determinations
and decisions of the Administrator shall be final and binding upon all persons
with respect to any right, benefit and privilege hereunder, subject to the
review procedures set forth in this Article 11.

            11.2. REQUEST FOR REVIEW OF A DENIAL OF A CLAIM FOR BENEFITS. Any
claimant or any authorized representative of such claimant whose claim for
benefits under this Plan has been denied or deemed denied, in whole or in part,
by the Administrator may upon written notice delivered to the Appeals Committee
request a review by the Appeals Committee of such denial of his or her claim for
benefits. Such claimant shall have sixty (60) days from the date the claim is
deemed denied, or sixty (60) days from receipt of the notice denying the claim,
as the case may be, in which to request such a review. The claimant's notice
must specify the relief requested and the reason such claimant believes the
denial should be reversed.

            11.3. APPEALS PROCEDURE. The Appeals Committee is hereby authorized
to review the facts and relevant documents, including this Plan, to interpret
this Plan and other relevant documents and to render a decision on the appeal of
the claimant. Such review may be made by written briefs submitted by the
claimant and the Administrator or at a hearing, or by both, as shall be deemed
necessary by the Appeals Committee. Upon receipt of a request for review, the
Appeals Committee shall schedule a hearing to be held (subject to reasonable
scheduling conflicts) not less than thirty (30) nor more than forty-five (45)
days from the receipt of such request. The date and time of such hearing shall
be designated by the Appeals Committee upon not less than fifteen (15) days'
notice to the claimant and the Administrator unless both of them accept shorter
notice. The notice shall specify that such claimant must


                                      11-2
<PAGE>   35

indicate in writing, at least five (5) days in advance of the time established
for such hearing, his intention to appear at the appointed time and place, or
the hearing will automatically be canceled. The reply shall specify any other
persons who will accompany him to the hearing, or such other persons will not be
admitted to the hearing. The Appeals Committee shall make every effort to
schedule the hearing on a day and at a time which is convenient to both the
claimant and the Administrator. The hearing will be scheduled at the Company's
headquarters unless the Appeals Committee determines that another location would
be more appropriate. The claimant, or his duly authorized representative, may
review all pertinent documents relating to the claim in preparation for the
hearing and may submit issues and comments in writing prior to or during the
hearing.

            11.4. DECISION UPON REVIEW OF DENIAL OF CLAIM FOR BENEFITS. After
the review has been completed, the Appeals Committee shall render a decision in
writing, a copy of which shall be sent to both the claimant and the
Administrator. In making its decision the Appeals Committee shall have full
power, authority, and discretion to determine any and all questions of fact,
resolve all questions of interpretation of this instrument or related documents
which may arise under any of the provisions of this Plan or such documents as to
which no other provision for determination is made hereunder, and exercise all
other powers and discretions necessary to be exercised under the terms of this
Plan which it is herein given or for which no contrary provision is made and to
determine the right to benefits of, and the amount of benefits, if any, payable
to, any person in accordance with the provisions of this Plan. The Appeals
Committee shall render a decision on the claim review promptly, but not more
than sixty (60) days after the receipt of the claimant's request for review,
unless a hearing is held, in which case the sixty (60) day period shall be
extended to thirty (30) days after the date of the hearing. Such decision shall


                                      11-3
<PAGE>   36

include specific reasons for the decision, written in a manner calculated to be
understood by the claimant, and shall contain specific references to the
pertinent provisions of the Plan and related documents upon which the decision
is based. The decision on review shall be furnished to the claimant within the
appropriate time described above. If the decision on review is not furnished
within such time, the claim shall be deemed denied on review at the end of such
period. There shall be no further appeal from a decision rendered by the Appeals
Committee. The decision of the Appeals Committee shall be final and binding in
all respects on the Administrator, the Company and the claimant. Except as
otherwise provided by law, the review procedures of this Article 11 shall be the
claimant's sole and exclusive remedy and shall be in lieu of all actions at law,
in equity, pursuant to arbitration or otherwise.

            11.5. ESTABLISHMENT OF APPEALS COMMITTEE. The Board shall appoint
the members of an Appeals Committee which shall consist of three (3) or more
members. The members of the Appeals Committee shall remain in office at the will
of the Board, and the Board, from time to time, may remove any of said members
with or without cause. A member of the Appeals Committee may resign upon written
notice to the remaining member or members of the Appeals Committee and to the
Board, respectively. The fact that a person is a Participant or a former
Participant or a prospective Participant shall not disqualify him from acting as
a member of the Appeals Committee, nor shall any member of the Appeals Committee
be disqualified from acting on any question because of his interest therein,
except that no member of the Appeals Committee may act on any claim which such
member has brought as a Participant, former Participant or Beneficiary under
this Plan. In case of the death, resignation or removal of any member of the
Appeals Committee, the remaining members shall act until a successor-member
shall be appointed by the Board. At the Administrator's request, the


                                      11-4
<PAGE>   37

Secretary of the Company shall notify the Administrator in writing of the names
of the original members of the Appeals Committee, of any and all changes in the
membership of the Appeals Committee, of the member designated as Chairman, and
the member designated as Secretary, and of any changes in either office. Until
notified of a change, the Administrator shall be protected in assuming that
there has been no change in the membership of the Appeals Committee or the
designation of Chairman or of Secretary since the last notification was filed
with it. The Administrator shall be under no obligation at any time to inquire
into the membership of the Appeals Committee or its officers. All communications
to the Appeals Committee shall be addressed to its Secretary at the address of
the Company. Unless the Board shall appoint others as the Appeals Committee, the
three (3) Board members with the longest period of active service on the Board
shall constitute such Committee.

            11.6. OPERATIONS OF APPEALS COMMITTEE. On all matters and questions,
a decision of a majority of the members of the Appeals Committee shall govern
and control. Meetings may be held in person or by electronic means. In lieu of a
meeting, decisions may be made by unanimous written consent. The Appeals
Committee shall appoint one of its members to act as its Chairman and another
member to act as Secretary. The terms of office of these members shall be
determined by the Appeals Committee, and either or both the Secretary and
Chairman may be removed by the other members of the Appeals Committee for any
reason which such other members may deem just and proper. The Secretary shall do
all things directed by the Appeals Committee. Although the Appeals Committee
shall act by decision of a majority of its members as above provided,
nevertheless in the absence of written notice to the contrary, every person may
deal with the Secretary and consider his acts as having been authorized by the



                                      11-5
<PAGE>   38

Appeals Committee. Any notice served or demand made on the Secretary shall be
deemed to have been served or made upon the Appeals Committee.

            11.7. SPECIAL PROVISIONS RELATING TO CHANGE OF CONTROL. In the event
of a Change of Control, then notwithstanding the contrary provisions of this
Article, for the two (2) year period following such Change of Control, the three
(3) individuals having the greatest Accrued Annual Retirement Benefits under
this Plan shall assume the responsibilities of the Appeals Committee set forth
in this Article. If one or more of them shall not be able to serve or to
continue to serve, the individual or individuals, as applicable, having the next
largest Accrued Annual Retirement Benefits under this Plan will serve in such
person's or persons' place. If at any time during such two (2) year period fewer
than three (3) individuals have Accrued Annual Retirement Benefits under this
Plan, such individual or individuals shall perform the duties of the Appeals
Committee. If only one (1) individual has Accrued Annual Retirement Benefits
under this Plan, the Appeals Committee shall not consist of such individual but
shall consist of such individual as he and the Company shall agree. If he and
the Company shall fail to agree on a single individual, the Appeals Committee
shall consist of three (3) individuals, one appointed by the Company, one
appointed by the individual claiming benefits hereunder, and a third selected by
the other two (2).



                                      11-6
<PAGE>   39

                                   ARTICLE 12

                                 ADMINISTRATION
                                 --------------

            12.1. APPOINTMENT OF ADMINISTRATOR. The Board shall appoint the
Administrator which shall be any person(s), corporation or partnership
(including the Company itself) as said Board shall deem desirable in its sole
discretion. The Administrator may be removed or resign upon thirty (30) days'
written notice or such lesser period of notice as is mutually agreeable. Unless
the Board appoints another Administrator, the Compensation Committee shall be
the Administrator.

            12.2. POWERS AND DUTIES OF THE ADMINISTRATOR. Except as expressly
otherwise set forth herein, the Administrator shall have the authority and
responsibility granted or imposed on an "administrator" by ERISA. The
Administrator shall determine any and all questions of fact, resolve all
questions of interpretation of this Plan which may arise under any of the
provisions of this Plan as to which no other provision for determination is made
hereunder, and exercise all other powers and discretions necessary to be
exercised under the terms of this Plan which it is herein given or for which no
contrary provision is made. The Administrator shall have full power and
discretion to interpret this Plan and related documents, to resolve ambiguities,
inconsistencies and omissions, to determine any question of fact, and to
determine the rights and benefits, if any, of any Participant or other
applicant, in accordance with the provisions of this Plan. Subject to the
provisions of any claims procedure hereunder, the Administrator's decision with
respect to any matter shall be final and binding on all parties concerned, and
neither the Administrator nor any of its directors, officers, employees or
delegates nor, where applicable, the directors, officers or employees of any
delegate, shall be liable in that regard except for gross abuse of the
discretion given it and them under the terms of this Plan. All determinations of
the


                                      12-1
<PAGE>   40

Administrator shall be made in a uniform, consistent and nondiscriminatory
manner with respect to all Participants and Beneficiaries in similar
circumstances. The Administrator, from time to time, may designate one or more
persons or agents to carry out any or all of its duties hereunder.

            12.3. ENGAGEMENT OF ADVISORS. The Administrator may employ
actuaries, attorneys, accountants, brokers, employee benefit consultants, and
other specialists to render advice concerning any responsibility the
Administrator, Appeals Committee or Compensation Committee has under this Plan.
Such persons may also be advisors to any Participating Company.

            12.4. PAYMENT OF COSTS AND EXPENSES. The costs and expenses incurred
in the administration of this Plan shall be paid in either of the following
manners as determined by the Company in its sole discretion:

                 (a) the expenses may be paid directly by one or more of the
                     Participating Companies; or

                 (b) the expenses may be paid out of the Trust, if any (subject
                     to any restriction contained in such Trust or required by
                     law).

Such costs and expenses include those incident to the performance of the
responsibilities of the Administrator, Appeals Committee or Compensation
Committee, including but not limited to, claims administration fees and costs,
fees of accountants, legal counsel and other specialists, bonding expenses, and
other costs of administering this Plan. Notwithstanding the foregoing, in no
event will any person serving in the capacity of Administrator, Appeals
Committee member or Compensation Committee member who is a full-time employee of
a Participating Company be entitled to any compensation for such services.



                                      12-2
<PAGE>   41

                                   ARTICLE 13

                            AMENDMENT AND TERMINATION
                            -------------------------

            13.1. POWER TO AMEND OR TERMINATE. Except as otherwise provided
herein following a Change of Control, this Plan may be amended by the Company at
any time, or from time to time, and may be terminated by the Company at any
time, but no such amendment, modification or termination shall reduce the
Accrued Annual Retirement Benefit or Vested Percentage of any Participant,
determined as of the date of such amendment, modification or termination. Such
amendment or termination shall be in writing, executed by two or more officers
of the Company whose actions are authorized or ratified by the Board. This Plan
may not be amended (but may be terminated) during the two (2) year period
following a Change of Control except that amendments may be made as required by
law.

            13.2. EFFECTS OF PLAN TERMINATION. If this Plan is terminated, then,
on and after the effective date of such termination, all accruals hereunder
shall cease. Thereafter, the Vested Percentage of each Participant shall become
one hundred percent (100%) and the Actuarial Equivalent of each Participant's
Accrued Annual Retirement Benefit shall be distributed to such Participant in
the Single Sum Form described in Section 6.3 hereof as soon as reasonably
possible but not later than ninety (90) days after the date of such termination.

            13.3. NO LIABILITY FOR PLAN AMENDMENT OR TERMINATION. Neither the
Company, nor any other Participating Company, nor any officer, Employee or
director thereof shall have any liability as a result of the amendment or
termination of this Plan. Without limiting the generality of the foregoing, the
Company shall have no liability for terminating this Plan notwithstanding the
fact that a Participant may have expected to have future accruals hereunder had
this Plan remained in effect.



                                      13-1

<PAGE>   42

                                   ARTICLE 14

                             PARTICIPATING COMPANIES
                             -----------------------

            14.1. LIST OF PARTICIPATING COMPANIES. The Participating Companies
as of the Effective Date are as follows:

PARTICIPATING COMPANIES               ADOPTION DATE         TERMINATION DATE
- -----------------------               -------------         ----------------
Pioneer-Standard Electronics, Inc.    April 27, 1999
Pioneer-Standard of Maryland, Inc.    April 27, 1999
Pioneer-Standard Illinois, Inc.       April 27, 1999
Pioneer-Standard Minnesota, Inc.      April 27, 1999
Pioneer-Standard Electronics, Ltd.    April 27, 1999
Dickens Data Systems, Inc.            April 27, 1999

            14.2. DESIGNATION OF PARTICIPATING COMPANIES. An Affiliated Company
may become a Participating Company under this Plan at any time. Such an
Affiliated Company, if organized under the laws of the United States of America
or any State, shall become a Participating Company, without the need for
amendment hereof, upon attaining such Affiliated Company status unless otherwise
provided by the Compensation Committee. Alternatively, such an Affiliated
Company may become a Participating Company by an amendment to Section 14.1
hereof which specifies the name of the Affiliated Company, its Adoption Date and
other pertinent information.


            14.3. ADOPTION OF SUPPLEMENTS. The Company may determine that
special provisions shall be applicable to some or all of the Senior Executives
of a Participating Company, either in addition to or in lieu of certain
provisions of this Plan. In such event, the Company shall adopt a Supplement
with respect to the Participating Company which employs such individuals which
Supplement shall specify by name or otherwise the Senior Executives of the
Participating Company covered thereby and the special provisions applicable to
such Senior



                                      14-1
<PAGE>   43

Executives. Any Supplement shall be deemed to be a part of this Plan solely with
respect to the Senior Executives specified therein.

            14.4. AMENDMENT OF SUPPLEMENTS. The Company, from time to time, may
amend, modify or terminate any Supplement; provided, however, that no such
action shall operate so as to deprive any Senior Executive who was covered by
such Supplement of any vested rights to which he is entitled under this Plan or
the Supplement.

            14.5. TERMINATION OF PARTICIPATION OF PARTICIPATING COMPANY. A
Participating Company whose status as an Affiliated Company terminates shall no
longer be deemed a Participating Company as of the date of the termination of
such Affiliated Company status. Alternatively, the Company may terminate this
Plan with respect to Participants employed by any Participating Company by an
amendment to Section 14.1 hereof which specifies the name of the Participating
Company, and its Termination Date, and other pertinent information. Distribution
of the benefits of Participants employed by said Participating Company shall
thereupon be made in the manner provided in Article 13 hereof.

            14.6. DELEGATION OF AUTHORITY. The Company is hereby fully empowered
to act on behalf of itself and the other Participating Companies as it may deem
appropriate in maintaining the Plan. Without limiting the generality of the
foregoing, such actions include obtaining and retaining relevant tax advantages
for the Plan. Furthermore, the adoption by the Company of any amendment to the
Plan or the termination thereof, will constitute and represent, without any
further action on the part of any Participating Company, the approval, adoption,
ratification or confirmation by each Participating Company of any such amendment
or termination. In addition, the appointment of or removal by the Company of any
member of the Appeals Committee, any Administrator or other person under the
Plan shall constitute and


                                      14-2
<PAGE>   44

represent, without any further action on the part of any Participating Company,
the appointment or removal by each Participating Company of such person.


            14.7. AMENDMENT RESTRICTIONS AND PROCEDURES. Amendments authorized
by this Article 14, including those adding or removing a Participating Company,
shall be subject to the provisions of Article 13 hereof dealing with amendment
and termination of the Plan, as applicable.




                                      14-3
<PAGE>   45



                                   ARTICLE 15

                            MISCELLANEOUS PROVISIONS
                            ------------------------

            15.1. NON-ALIENATION. No benefits under this Plan shall be subject
in any manner to be anticipated, alienated, sold, transferred, assigned,
pledged, encumbered, attached, garnished or charged in any manner (either at law
or in equity), and any attempt to so anticipate, alienate, sell, transfer,
assign, pledge, encumber, attach, garnish or charge the same shall be void; nor
shall any such benefits in any manner be liable for or subject to the debts,
contracts, liabilities, engagements or torts of the person entitled to such
benefits as are herein provided for her or him.

            15.2. TAX WITHHOLDING. The Company or any other Participating
Company may withhold from a Participant's compensation or any payment made by it
under this Plan such amount or amounts as may be required for purposes of
complying with the tax withholding or other provisions of the Code or the Social
Security Act or any state or local income or employment tax act or for purposes
of paying any estate, inheritance or other tax attributable to any amounts
payable hereunder.

            15.3. INCAPACITY. If the Administrator determines that any
Participant or other person entitled to payments under this Plan is incompetent
by reason of physical or mental disability and is consequently unable to give a
valid receipt for payments made hereunder, or is a minor, the Administrator may
order the payments becoming due to such person to be made to another person for
his benefit, without responsibility on the part of the Administrator to follow
the application of amounts so paid. Payments made pursuant to this Section shall
completely discharge the Administrator, the Company and the other Participating
Companies and the Appeals Committee with respect to such payments.


                                      15-1
<PAGE>   46

            15.4. ADMINISTRATIVE FORMS. All applications, elections and
designations in connection with this Plan made by a Participant or other person
shall become effective only when duly executed on forms provided by the
Administrator and filed with the Administrator.

            15.5. INDEPENDENCE OF PLAN. Except as otherwise expressly provided
herein, this Plan shall be independent of, and in addition to, any other benefit
agreement or plan of a Participating Company or any rights that may exist from
time to time thereunder.

            15.6. NO EMPLOYMENT RIGHTS CREATED. This Plan shall not be deemed to
constitute a contract of employment between the Company or any other
Participating Company and any Participant, nor confer upon any Participant the
right to be retained in the service of the Company or any other Participating
Company for any period of time, nor shall any provision hereof restrict the
right of any Company to discharge or otherwise deal with any Participant.

            15.7. RESPONSIBILITY FOR LEGAL EFFECT. Neither the Company, nor any
other Participating Company, nor the Administrator or the Compensation Committee
or Appeals Committee, nor any officer, member, delegate or agent of any of them,
makes any representations or warranties, express or implied, or assumes any
responsibility concerning the legal, tax, or other implications or effects of
this Plan. Without limiting the generality of the foregoing, no Participating
Company shall have any liability for the tax liability which a Participant may
incur resulting from participation in this Plan or the payment of benefits
hereunder.

            15.8. LIMITATION OF DUTIES. The Company, the Participating
Companies, the Compensation Committee, the Administrator, the Appeals Committee,
and their respective officers, members, employees and agents shall have no duty
or responsibility under this Plan other than the duties and responsibilities
expressly assigned to them herein or delegated to them


                                      15-2
<PAGE>   47

pursuant hereto. None of them shall have any duty or responsibility with respect
to the duties or responsibilities assigned or delegated to another of them.

            15.9. LIMITATION OF SPONSOR LIABILITY. Any right or authority
exercisable by the Company, pursuant to any provision of this Plan, shall be
exercised in the Company's capacity as sponsor of this Plan, or on behalf of the
Company in such capacity, and not in a fiduciary capacity, and may be exercised
without the approval or consent of any person in a fiduciary capacity. Neither
the Company, nor any of its respective officers, members, employees, agents and
delegates, shall have any liability to any party for its exercise of any such
right or authority.

            15.10. SUCCESSORS. The terms and conditions of this Plan shall inure
to the benefit of and bind the Company, the other Participating Companies, the
Participants, their Beneficiaries, and the successors and personal
representatives of the Participants and their Beneficiaries.

            15.11. CONTROLLING LAW. This Plan shall be construed in accordance
with the laws of the State of Ohio to the extent not preempted by laws of the
United States.

            15.12. HEADINGS AND TITLES. The Section headings and titles of
Articles used in this Plan are for convenience of reference only and shall not
be considered in construing this Plan.

            15.13. GENERAL RULES OF CONSTRUCTION. The masculine gender shall
include the feminine and neuter, and vice versa, as the context shall require.
The singular number shall include the plural, and vice versa, as the context
shall require. The present tense of a verb shall include the past and future
tenses, and vice versa, as the context may require.

                                      15-3
<PAGE>   48

            15.14. EXECUTION IN COUNTERPARTS. This Plan may be executed in any
number of counterparts each of which shall be deemed an original and said
counterparts shall constitute but one and the same instrument and may be
sufficiently evidenced by any one counterpart.

            15.15. SEVERABILITY. In the event that any provision or term of this
Plan, or any agreement or instrument required by the Administrator hereunder, is
determined by a judicial, quasi-judicial or administrative body to be void or
not enforceable for any reason, all other provisions or terms of this Plan or
such agreement or instrument shall remain in full force and effect and shall be
enforceable as if such void or nonenforceable provision or term had never been a
part of this Plan, or such agreement or instrument except as to the extent the
Administrator determines such result would have been contrary to the intent of
the Company in establishing and maintaining this Plan.

            15.16. INDEMNIFICATION. The Participating Companies shall jointly
and severally indemnify, defend, and hold harmless any Employee, officer or
director of any Participating Company for all acts taken or omitted in carrying
out the responsibilities of the Company, Participating Company, Compensation
Committee, Administrator or Appeals Committee under the terms of this Plan or
other responsibilities imposed upon such individual by law. This indemnification
for all such acts taken or omitted is intentionally broad, but shall not provide
indemnification for any civil penalty that may be imposed by law, nor shall it
provide indemnification for embezzlement or diversion of Plan funds for the
benefit of any such individual. The Participating Companies shall jointly and
severally indemnify any such individual for expenses of defending an action by a
Participant, dependent, service provider, government entity or other person,
including all legal fees and other costs of such defense. The Participating
Companies shall also reimburse any such an individual for any monetary recovery



                                      15-4
<PAGE>   49

in a successful action against such individual in any federal or state court or
arbitration. In addition, if a claim is settled out of court with the
concurrence of the Company, the Participating Companies shall jointly and
severally indemnify any such individual for any monetary liability under any
such settlement, and the expenses thereof. Such indemnification will not be
provided to any person who is not a present or former Employee or director of a
Participating Company nor shall it be provided for any claim by a Participating
Company against any such individual.

            IN WITNESS WHEREOF, PIONEER-STANDARD ELECTRONICS, INC., the Company,
by its appropriate officers duly authorized, has caused this Plan to be executed
and adopted as of the 27th day of April, 1999.

                                        PIONEER-STANDARD ELECTRONICS, INC.

                                                  ("Company")

                                        By  /s/ James L. Bayman
                                            -------------------------------

                                        And /s/ Arthur Rhein
                                            -------------------------------
















                                      15-5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.P
<SEQUENCE>4
<FILENAME>ex10-p.txt
<DESCRIPTION>EXHIBIT 10(P)
<TEXT>

<PAGE>   1
                                                                   Exhibit 10(p)






                       PIONEER-STANDARD ELECTRONICS, INC.

                            BENEFIT EQUALIZATION PLAN


























                                                       Effective: April 27, 1999



<PAGE>   2




                                TABLE OF CONTENTS
                                -----------------


ARTICLE    DESCRIPTION                                                   PAGE
- -------    -----------                                                   ----

   1       NAME AND PURPOSE                                               1-1

   2       DEFINITIONS                                                    2-1

   3       ELIGIBILITY AND PARTICIPATION                                  3-1

   4       COMPENSATION REDUCTION, MATCH AND PROFIT
           SHARING AMOUNTS AND ACCOUNTS                                   4-1

   5       ELIGIBILITY FOR RETIREMENT AND RELATED BENEFITS                5-1

   6       FORMS OF RETIREMENT BENEFITS                                   6-1

   7       DEATH BENEFITS                                                 7-1

   8       RIGHTS OF PARTICIPANTS AND BENEFICIARIES                       8-1

   9       TRUST                                                          9-1

   10      CLAIMS PROCEDURE                                               10-1

   11      ADMINISTRATION                                                 11-1

   12      AMENDMENT AND TERMINATION                                      12-1

   13      PARTICIPATING COMPANIES                                        13-1

   14      MISCELLANEOUS                                                  14-1


                                       ii

<PAGE>   3



                       PIONEER-STANDARD ELECTRONICS, INC.

                            BENEFIT EQUALIZATION PLAN

         This Plan is hereby adopted by Pioneer-Standard Electronics, Inc., a
corporation organized and existing under and by virtue of the laws of the State
of Ohio (hereinafter referred to as the "Company");

                              W I T N E S S E T H:

         WHEREAS, the Company maintains the Pioneer-Standard Electronics, Inc.
Employees' Profit Sharing Retirement Plan (hereinafter referred to as the
"Profit Sharing Plan"); and

         WHEREAS, the Company now desires to establish the Pioneer-Standard
Electronics, Inc. Benefit Equalization Plan (hereinafter referred to as the
"Plan") in order to permit certain management and highly compensated employees
to make deferrals of their unpaid compensation, receive matching contributions
on such deferrals, and receive employer nonelective contributions in excess of
the certain limits imposed under the Profit Sharing Plan; and

         WHEREAS, the Company desires to further provide such management and
highly compensated employees with unfunded deferred compensation by providing an
election to defer receipt of certain additional compensation from the Company as
well as providing the Company with a vehicle to provide additional deferred
compensation to such individuals;

         NOW, THEREFORE, the Company hereby adopts the Plan, effective April 27,
1999, as follows:

                                      iii

<PAGE>   4

                                   ARTICLE 1
                                   ---------

                                NAME AND PURPOSE
                                ----------------

         1.1. Name. The name of this Plan shall be the PIONEER-STANDARD
ELECTRONICS, INC. BENEFIT EQUALIZATION PLAN.

         1.2. Purpose. This Plan is hereby established to provide unfunded
deferred compensation to certain management and highly compensated employees of
the Participating Companies under certain conditions specified herein.

         1.3. Plan for a Select Group. This Plan shall only cover Employees of
the Participating Companies who are members of a "select group of management or
highly compensated employees" within the meaning of Sections 201(2), 301(a)(3),
401(a)(1) and 4021(b)(6) of ERISA. The Company shall have the authority to take
any and all actions necessary or desirable in order that this Plan shall satisfy
the requirements set forth in ERISA and regulations thereunder applicable to
plans maintained for Employees who are members of a select group of management
or highly compensated employees. Moreover, this Plan at all times shall be
administered in such a manner, and benefits hereunder shall be so limited,
notwithstanding any contrary provision of this Plan, in order that this Plan
shall constitute such a plan.

         1.4. Not a Funded Plan. It is the intention and purpose of the Company
that this Plan shall be deemed to be "unfunded" for tax purposes as well as
being such a plan as would properly be described as "unfunded" for purposes of
Title I of ERISA. This Plan shall be administered in such a manner,
notwithstanding any contrary provision of this Plan, in order that it will be so
deemed and would be so described.

                                      1-1

<PAGE>   5


                                   ARTICLE 2
                                   ---------

                                   DEFINITIONS
                                   -----------

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

         2.1. Accounts. The word "Accounts" shall mean the Deferral Account,
Match Account and Profit Sharing Account maintained on the books of the Company
for a Participant under this Plan. A Participant's Accounts shall not constitute
or be treated as a trust fund of any kind.

         2.2. Administrator. The word "Administrator" shall mean the person or
persons, corporation or partnership designated as Administrator under Article 11
hereof.

         2.3. Adoption Date. The words "Adoption Date" shall mean the date as of
which any Participating Company shall have adopted the Plan.

         2.4. Affiliated Company. The words "Affiliated Company" generally shall
mean any corporation or business organization that, directly or indirectly,
through one or more intermediaries controls, is controlled by, or is under
common control with the Company, and particularly shall mean any corporation of
which eighty percent (80%) of the voting stock is directly or indirectly owned
by the Company.

         2.5. Appeals Committee. The words "Appeals Committee" shall mean the
Appeals Committee established pursuant to Article 10 hereof.

         2.6. Annual Incentive Compensation Plan. The words "Annual Incentive
Compensation Plan" shall mean an arrangement used to provide annual incentive
compensation to employees of the Participating Companies, whether set forth in a
plan, contained in individual employment agreements or otherwise.

                                      2-1

<PAGE>   6

         2.7. Base Salary. The words "Base Salary" shall mean a Participant's
base remuneration for services rendered to a Participating Company while a
Participant; provided, however, that to the extent the Compensation Committee
considers it appropriate, Base Salary payable to a Participant for service
rendered to an Affiliated Company shall be taken into account in determining his
Base Salary. A Participant's Base Salary will not be reduced by any of the
following:

                           (i)  amounts which are excluded from taxable income
                                under Code Sections 125, 402(e)(3) and 402(h);
                                and

                           (ii) amounts which are excluded from taxable income
                                because they are deferred by the Participant
                                under a plan similar to this Plan.

Base Salary shall, however, not include fringe or special benefits or
perquisites, or matching or employer contributions under any benefit plan of any
Participating Company or Affiliated Company.

         2.8. Beneficiary. The word "Beneficiary" shall mean any person who
receives or is designated to receive payment of any benefit under the terms of
this Plan because of the participation of another person in this Plan.

         2.9. Benefit Commencement Date. The words "Benefit Commencement Date"
shall mean the first date as of which benefits are to be paid pursuant to the
terms of this Plan.

         2.10. Board. The word "Board" shall mean the Board of Directors of the
Company.

         2.11. Bonus. The word "Bonus" shall mean a Participant's bonus for
services rendered to a Participating Company while a Participant, whether
payable pursuant to the Annual Incentive Compensation Plan or otherwise,
provided, however, that to the extent the Compensation Committee considers it
appropriate, a bonus payable to a Participant for services rendered to an
Affiliated Company shall be taken into account in determining the amount of a
Participant's Bonus for purposes of this Plan. A Participant's Bonus will not be
reduced by any of the following:

                                      2-2

<PAGE>   7

                           (i)  amounts which are excluded from taxable income
                                under Code Sections 125, 402(e)(3) and 402(h);
                                and

                           (ii) amounts which are excluded from taxable income
                                because they are deferred by the Participant
                                under a plan similar to this Plan.

A Bonus shall, however, not include fringe or special benefits or perquisites,
or matching or employer contributions under any benefit plan of any
Participating Company or Affiliated Company. If amounts are payable under the
Annual Incentive Compensation Plan, or other arrangement, more frequently than
annually, each such payment shall constitute a separate Bonus for purposes of
this Plan.

         2.12. Bonus Deferral Election. The words "Bonus Deferral Election"
shall mean, with respect to any Participant, the whole percentage or dollar
amount of a future Bonus payment which the Participant elects to defer to the
Plan pursuant to Article 4 hereof.

         2.13. Breach of the Restrictive Covenants. The words "Breach of the
Restrictive Covenants" shall mean, during a Participant's employment with the
Company or any Affiliated Company or thereafter, during the term of any written
agreement between the Company or Affiliated Company and the Participant dealing
with noncompetition, nonsolicitation, noninterference, confidentiality or
similar matters, the breach of such agreement by the Participant as reasonably
determined by the Compensation Committee in good faith, but only if such breach
is not remedied within

                                      2-3

<PAGE>   8

thirty (30) days following actual written notification of such breach by the
Compensation Committee to the Participant.

         2.14. Cause. The word "Cause" shall mean for purposes of this Plan:

                  (a) a Participant's Termination of Employment shall have been
         the result of his conviction of any of the following: (i) embezzlement;
         (ii) misappropriation of money or other property of the Company or any
         Affiliated Company; or (iii) any felony;

                  (b) a Breach of the Restrictive Covenants; or;

                  (c) a Participant's failure, during his employment with the
         Company or any Affiliated Company, to devote his full time and
         undivided attention during normal business hours to the business and
         affairs of the Company or any Affiliated Company, except for reasonable
         vacations and for illness or incapacity; provided, however, that the
         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.

         2.15. Change of Control. The words "Change of Control" shall mean 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 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 Securities Exchange Act of 1934 ("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) has become the
         beneficial owner (as the term "beneficial

                                      2-4

<PAGE>   9

         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;

                  (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
         (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.

         2.16. Code. The word "Code" shall mean the Internal Revenue Code of
1986, as amended, and any 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.

         2.17. Company. The word "Company" shall mean Pioneer-Standard
Electronics, Inc. and any successor corporation or business organization which
shall assume the duties and obligations of Pioneer-Standard Electronics, Inc.
under this Plan.

         2.18. Compensation. The word "Compensation" shall mean all remuneration
which is paid to an Employee in cash or in kind for the performance of services
for a Participating Company for the Fiscal Year, and which must be reported as
wages on the Employee's Form W-2 for income tax purposes, adjusted as follows:

                                      2-5

<PAGE>   10

                  (a) increased for salary reduction amounts which are excluded
         from the taxable income of the Employee under Code Sections 125,
         402(e)(3) and 402(h);

                  (b) increased by any deferred compensation amounts; and

                  (c) reduced by all of the following amounts even if they are
         taxable to the Employee:

                           (i)  expense reimbursements, expense allowances or
                                moving expenses; and

                           (ii) cash and noncash fringe benefits and welfare
                                benefits.

         Finally, an Employee's Compensation with respect to a Fiscal Year shall
be that Compensation which is earned for such Fiscal Year, without regard to
when such Compensation is actually paid to the Employee.

         2.19. Compensation Committee. The words "Compensation Committee" shall
mean the Compensation Committee of the Board or any successor thereto.

         2.20. Compensation Limit. The words "Compensation Limit" shall mean the
limitation on annual compensation which is taken into account under the Profit
Sharing Plan pursuant to Section 401(a)(17) of the Code. This limitation shall
be adjusted, as applicable, on January 1 of each year. The Compensation Limit
used to determine Excess Compensation for a particular Fiscal Year shall be the
limitation on annual compensation which is taken into account under the Profit
Sharing Plan for the plan year of the Profit Sharing Plan which ends on December
31 in such Fiscal Year.

         2.21. Continuous Service. The words "Continuous Service" shall mean for
any Participant any period during which he is or was employed by any
Participating Company or Affiliated Company, excluding any periods of
Disability, even if such period

                                       2-6

<PAGE>   11

of Disability is counted as Continuous Service under any other plan or
arrangement of any Participating Company or Affiliated Company. Each such period
shall be measured from the Participant's date of hire (which date shall be
considered to be the first day during which the Participant performs any service
for any Participating Company or Affiliated Company for which the Participant is
directly or indirectly compensated) until the date of Termination of Employment
which follows such date of hire.

         In addition, if any Participant has a Termination of Employment and is
rehired within twelve (12) months of:

                  (a) the date of his Termination of Employment; or

                  (b) if earlier, the first day of any period of leave of
         absence, layoff or Military Service after the end of which the Employee
         did not return to work for a Participating Company or an Affiliated
         Company prior to his Termination of Employment;

such Participant's Continuous Service shall include the period of severance
measured from his Termination of Employment until his subsequent date of rehire.
Two or more such periods that contain fractions of a year (computed in months
and days) shall be aggregated on the basis of twelve (12) months constituting a
year and thirty (30) days constituting a month.

         In the event that a business organization shall be or shall have been
acquired by or merged into a Participating Company, the date of hire of each
Participant who is or was an employee of such business organization on the date
of acquisition shall be deemed to have been the most recent date he was hired by
such business organization unless another date is designated by the Compensation
Committee.

         2.22. Deferral Account. The words "Deferral Account" shall mean the
bookkeeping account maintained by the Company on behalf of each Participant to
reflect

                                      2-7

<PAGE>   12

the Participant's Deferral Amounts for each Fiscal Year and all earnings, gains
and losses thereon.

         2.23. Deferral Amount. The words "Deferral Amount" shall mean for each
Participant an amount equal to the amount by which the Participant's Base Salary
and Bonus are reduced by means of a Salary Deferral Election or a Bonus Deferral
Election pursuant to Article 4 hereof.

         2.24. Deferral Election. The words "Deferral Election" shall mean, with
respect to any Participant, the whole percentage or dollar amount of Base Salary
and Bonus which the Participant elects to defer to the Plan pursuant to Article
4 hereof.

         2.25. Director. The word "Director" shall mean a member of the Board.

         2.26. Disability. The word "Disability" shall mean, with respect to any
Participant, a medically determinable physical or mental impairment which
qualifies the Participant to receive benefits under the Participating Company's
long term disability plan, or which would qualify the Participant to receive
benefits under the Participating Company's long term disability plan had he been
covered by said 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 Section 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 Section 12114; or

                  (c) resulted from any intentionally self-inflicted injury.

                                      2-8

<PAGE>   13

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

         2.27. Early Retirement Date. The words "Early Retirement Date" shall
mean the date on which a Participant attains the later of age fifty-five (55) or
seven (7) years of Continuous Service.

         2.28. Effective Date. The words "Effective Date" shall mean the date
this Plan became effective, which date is April 27, 1999.

         2.29. Employee. The word "Employee" shall mean any common-law employee
of any Participating Company or Affiliated Company, whether or not an officer or
Director, but excluding any person serving only in the capacity of a Director.

         2.30. ERISA. The acronym "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended, and any regulations or other
pronouncements promulgated thereunder. Whenever a reference is made herein to a
specific ERISA Section, such reference shall be deemed to include any successor
ERISA Section having the same or a similar purpose.

         2.31. Excess Compensation. The words "Excess Compensation" shall mean
the Participant's Compensation for a Fiscal Year which is in excess of the
Compensation Limit.

         2.32. Fiscal Year. The words "Fiscal Year" shall mean the twelve (12)
month period ending on March 31 in each calendar year.

         2.33. Match Account. The words "Match Account" shall mean the
bookkeeping account maintained by the Company on behalf of each Participant to
reflect

                                      2-9

<PAGE>   14

the Participant's Match Amounts for each Fiscal Year and all earnings, gains and
losses thereon.

         2.34. Match Amounts. The words "Match Amounts" shall mean for each
Participant the amounts which are deemed to be credited to the Participant's
Match Account pursuant to Article 4 hereof.

         2.35. Military Service. The words "Military Service" shall mean duty in
the Armed Forces of the United States, whether voluntary or involuntary,
provided that the Employee serves not more than one voluntary enlistment or tour
of duty and further provided that such voluntary enlistment or tour of duty does
not follow involuntary duty. To the extent required by law, this Plan shall be
administered in compliance with the Uniformed Services Employment and
Reemployment Rights Act of 1994.

         2.36. Normal Retirement Date. The words "Normal Retirement Date" shall
mean the date on which a Participant attains age sixty-five (65).

         2.37. Participant. The word "Participant" shall mean any eligible
Senior Executive who has performed all the acts required by this Plan to become
a Participant, who has become a Participant in accordance with Article 3 hereof,
and who remains a Participant hereunder. A Participant shall cease to be a
Participant and shall become a former Participant, upon the earliest of his
Termination of Employment, the date he ceases to be designated by the
Compensation Committee as eligible to participate, the date he ceases to be
employed by a Participating Company or the date he ceases to accrue benefits
under this Plan. However, the word "Participant" may also include, where the
context indicates, any former Participant in this Plan.

                                      2-10

<PAGE>   15

         2.38. Participating Company. The words "Participating Company" shall
mean the Company and any Affiliated Company which is or shall become a
Participating Company in the Plan pursuant to Article 13 hereof but only for
periods while it is a Participating Company herein.

         2.39. Plan. The word "Plan" shall mean the Pioneer-Standard
Electronics, Inc. Benefit Equalization Plan as set forth herein, effective as of
the Effective Date, and as it may be later amended.

         2.40. Plan Year. The words "Plan Year" shall mean the twelve (12) month
period ending on December 31 in each calendar year. The first Plan Year shall be
April 27, 1999 through December 31, 1999.

         2.41. Profit Sharing Account. The words "Profit Sharing Account" shall
mean the bookkeeping account maintained by the Company on behalf of each
Participant to reflect the Participant's Profit Sharing Amounts for each Fiscal
Year and all earnings, gains and losses thereon.

         2.42. Profit Sharing Amount. The words "Profit Sharing Amount" shall
mean for each Participant the amounts which are deemed to be credited to the
Participant's Profit Sharing Account pursuant to Article 4 hereof.

         2.43. Profit Sharing Plan. The reference and words "Profit Sharing
Plan" shall mean the Pioneer-Standard Electronics, Inc. Employees' Profit
Sharing Retirement Plan or any replacement plan or successor plan thereto.

         2.44. Retirement. The word "Retirement" shall mean a Termination of
Employment of a Participant, whether voluntary or involuntary, on or after the
first to occur of his Early Retirement Date or his Normal Retirement Date, for a
reason other than:

                                      2-11

<PAGE>   16

                  (a) his death or Disability; or

                  (b) for Cause.

         2.45. Salary Deferral Election. The words "Salary Deferral Election"
shall mean, with respect to any Participant, the whole percentage or dollar
amount of a future Base Salary payment which the Participant elects to defer to
the Plan pursuant to Article 4 hereof.

         2.46. Senior Executive. The words "Senior Executive" shall mean any
executive Employee who is a member of a select group of management or highly
compensated employees of any Participating Company within the meaning of
Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA. A Participant
shall automatically cease to be a Senior Executive on his date of Termination of
Employment.

         2.47. Short Term Deferral Election. The words "Short Term Deferral
Election" shall mean, with respect to any Participant, the whole percentage or
dollar amount of the Participant's Deferral Amount for the Fiscal Year which the
Participant elects to defer until a date specified by the Participant pursuant
to Article 4 hereof.

         2.48. Termination Date. The words "Termination Date" shall mean the
date as of which any Participating Company ceases to participate in the Plan.

         2.49. Termination of Employment. The words "Termination of Employment"
shall mean for any Employee the occurrence of any one of the following events:

                  (a) he is discharged by a Participating Company or any
         Affiliated Company unless he is subsequently reemployed and given pay
         back to his date of discharge;

                  (b) he voluntarily terminates employment with a Participating
         Company or any Affiliated Company;

                                      2-12

<PAGE>   17

                  (c) he retires from employment with a Participating Company or
         any Affiliated Company;

                  (d) he fails to return to work at the end of any leave of
         absence authorized by a Participating Company or any Affiliated
         Company, or within ninety (90) days following such Employee's release
         from Military Service or within any other period following Military
         Service in which his right to reemployment with a Participating Company
         or any Affiliated Company is guaranteed by law; or

                  (e) he fails to return to work after the cessation of
         disability income payments under any sick leave or short term
         disability program of a Participating Company or any Affiliated
         Company, for any reason including such a failure to return to work due
         to his Disability.

         2.50. Trust. The word "Trust" shall mean any trust that may be
established pursuant to Article 9 hereof.

         2.51. Vested Interest. The words "Vested Interest" shall mean with
respect to any Participant the total of (a) plus (b) minus (c), where:

                  (a) equals the amount, if any, credited to his Deferral
         Account;

                  (b) equals his Vested Percentage multiplied by the sum of:

                           (i)  the balance in his Match Account and his Profit
                                Sharing Account; plus

                           (ii) any distributions made to the Participant from
                                his Match Account or his Profit Sharing Account;
                                and

                  (c) equals the amount of any distributions made to the
         Participant from his Match Account or his Profit Sharing Account.

         2.52. Vested Percentage. The words "Vested Percentage" shall mean for
any Participant a percentage determined on the basis of his number of years of
Continuous Service in accordance with the following table:

                                      2-13

<PAGE>   18

                    Years of Continuous Service     Vested Percentage
                    ---------------------------     -----------------

                    Less than 1 year                         0%
                    1 but less than 2 years                 20%
                    2 but less than 3 years                 40%
                    3 but less than 4 years                 60%
                    4 but less than 5 years                 80%
                    5 or more years                        100%

Notwithstanding the foregoing, the Vested Percentage of a Participant with
respect to his Deferral Account always shall be one hundred percent (100%) and
the Vested Percentage of a Participant with respect to his Match Account and
Profit Sharing Account shall become one hundred percent (100%) upon the first to
occur of the following events:

                  (a) the Participant's attainment of his Early Retirement Date,
         or Normal Retirement Date, while he is an Employee;

                  (b) the Participant's death while he is an Employee;

                  (c) the Participant's Termination of Employment due to his
         Disability;

                  (d) the effective date of the termination of the Plan; or

                  (e) the date of a Change of Control.

However, notwithstanding any contrary provision of this Plan, regardless of a
Participant's Vested Percentage, his Account balances hereunder, other than his
Account balance in his Deferral Account, shall at all times until paid be
forfeitable for Cause or Breach of the Restrictive Covenants.

                                      2-14

<PAGE>   19

                                   ARTICLE 3
                                   ---------

                          ELIGIBILITY AND PARTICIPATION
                          -----------------------------


         3.1. Eligibility. The Compensation Committee may, from time to time, in
its discretion, designate one or more Senior Executives as eligible to
participate in this Plan.

         3.2. Participation. Each Senior Executive who has satisfied the
eligibility requirements, set forth in Section 3.1 hereof, shall become a
Participant on or as of the date of his designation as a Senior Executive
eligible to participate in the Plan, or as soon thereafter as he reasonably can
be enrolled in the Plan, provided that he complies with appropriate
administrative requirements for enrollment of Participants, and shall remain a
Participant until the earlier of (a) the date of his Termination of Employment
or (b) the cessation of his Participant status pursuant to Section 3.3 hereof.

         3.3. Cessation of Participation Initiated by the Compensation
Committee. In the event that the Compensation Committee determines, in its sole
discretion, that a Participant is not, or may not be, a member of a "select
group of management or highly compensated employees" within the meaning of
Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA, then the
Compensation Committee may, in its sole discretion, terminate such Participant's
participation in this Plan. In the event of such termination of participation:

                  (a) such Participant shall no longer be permitted to make
         deferrals or be credited with allocations hereunder; and

                  (b) the Compensation Committee shall direct that such actions
         shall be taken which, in its sole discretion, most closely adhere to
         the terms of this Plan while not putting at risk its status as a plan
         maintained

                                      3-1

<PAGE>   20

         for a "select group of management or highly compensated employees" as
         referred to above.

                                      3-2

<PAGE>   21


                                   ARTICLE 4
                                   ---------

                        COMPENSATION REDUCTION, MATCH AND
                      PROFIT SHARING AMOUNTS, AND ACCOUNTS
                      ------------------------------------


         4.1. Deferral Elections. If a Participant elects to make deferrals
under this Plan for a Fiscal Year, then a portion of the Compensation which
would normally be paid to the Participant by or through the Participating
Company shall be retained by the Participating Company, and, in lieu thereof, an
amount equal thereto shall constitute a Deferral Amount hereunder and shall be
credited to the Participant's Deferral Account pursuant to Section 4.4 hereof.
Such elections shall be subject to the following rules:

                  (a) Salary Deferral. With respect to each Fiscal Year, a
         Participant may elect to defer a portion of his or her Base Salary by
         making a Salary Deferral Election, in writing or such other form and at
         such time as is required by the Administrator prior to deferral
         hereunder. A Participant's Salary Deferral Election shall specify a
         stated percentage or a stated dollar amount of the Participant's Base
         Salary, which specified percentage or dollar amount shall not exceed
         eighty percent (80%) of the Participant's Base Salary. The amount so
         elected under the Salary Deferral Election shall be credited to the
         Participant's Deferral Account under this Plan. No Salary Deferral
         Election shall be effective with respect to Base Salary paid before:

                           (i)  the date of receipt by the Administrator of a
                                Salary Deferral Election in a form acceptable to
                                the Administrator for the Participant's initial
                                Fiscal Year of participation in this Plan; and

                           (ii) the first day of the Fiscal Year with respect to
                                subsequent Fiscal Years, provided the
                                Administrator has received the Salary Deferral
                                Election in a form acceptable to the
                                Administrator prior to such first day.

                  (b) Bonus Deferral. With respect to each Fiscal Year, a
         Participant may elect to defer a portion of his or her Bonus by making
         a Bonus Deferral Election, in writing or such other form and at such
         time as is required by the Administrator prior to deferral hereunder. A
         Participant's Bonus Deferral Election shall specify a stated percentage
         or a stated dollar amount of the Participant's Bonus, which specified


                                      4-1

<PAGE>   22
         percentage or dollar amount shall not exceed one hundred percent (100%)
         of the Participant's Bonus. The amount so elected under the Bonus
         Deferral Election shall be credited to the Participant's Deferral
         Account under this Plan. No Bonus Deferral Election shall be effective
         with respect to a Bonus paid before:

                           (i)  the date of receipt by the Administrator of a
                                Bonus Deferral Election in a form acceptable to
                                the Administrator for the Participant's initial
                                Fiscal Year of participation in this Plan; and

                           (ii) the first day of the Fiscal Year with respect to
                                subsequent Fiscal Years, provided the
                                Administrator has received the Bonus Deferral
                                Election in a form acceptable to the
                                Administrator prior to such first day.

                  (c) General Deferral Election Rules. A Participant's Salary
         Deferral Election and Bonus Deferral Election shall be irrevocable for
         the entire Fiscal Year for which it is made. All elections to make
         deferrals under this Plan, and all resulting deferrals, shall be
         subject to such rules, procedures, limits and restrictions as the
         Administrator may establish from time to time. If permitted by the
         Administrator, a Participant's Deferral Election may be effective from
         Fiscal Year to Fiscal Year during a Participant's continuing
         participation, until the Participant ceases to participate or the
         election is prospectively revoked. Such prospective revocation of a
         Deferral Election shall be effective as of the first day of the Fiscal
         Year commencing after the receipt by the Administrator of a revocation
         in form acceptable to the Administrator. If permitted by the
         Administrator, a Participant may make differing Deferral Elections with
         respect to each of multiple Bonuses payable for a particular Fiscal
         Year or may make a single election applicable to all such Bonuses.

                  (d) Short Term Deferral. With respect to each Fiscal Year, a
         Participant may make a Short Term Deferral Election applicable to all
         or a portion of his Deferral Amount for such Fiscal Year. A
         Participant's Short Term Deferral Election shall specify a stated
         percentage or a stated dollar amount of the Participant's Deferral
         Amount for the Fiscal Year, which specified percentage or dollar amount
         shall not exceed one hundred percent (100%) of the Participant's
         Deferral Amount for the Fiscal Year. The resulting deferral shall be
         for a definite period and shall be payable in the Single Sum Form on
         the date specified by the Participant provided that the following shall
         be applicable:

                           (i)   The deferral must be at least to the third
                                 Fiscal Year following the Fiscal Year from
                                 which the Base Salary or Bonus is deferred.

                                      4-2

<PAGE>   23

                           (ii)  The Deferral Election will be superseded by the
                                 other Plan provisions applicable to death,
                                 Disability, Retirement or Termination of
                                 Employment of the Participant, or the
                                 termination of the Plan, or a previous
                                 withdrawal of such amounts (to the extent
                                 thereof) pursuant to Section 5.5(a) or (b)
                                 hereof, before the date as of which the amount
                                 is payable.

                           (iii) The Participant may not change the date which
                                 he has specified as the date on which such
                                 Deferral Amount shall be distributed to him.

         4.2. Matching. For each Fiscal Year, the Match Account of a Participant
who is deemed to have Deferral Amounts credited to a Deferral Account for such
Fiscal Year pursuant to a Deferral Election as provided in Section 4.1 hereof,
shall be credited with a Match Amount equal to the matching contribution amount
which would have been provided to the Participant under the Profit Sharing Plan
if the Deferral Amounts had instead been contributed as pre-tax contribution to
the Profit Sharing Plan and the limits imposed by Code Sections 401(a)(17),
401(k)(3), 401(m)(2), 402(g), and 415 were not applicable. For purposes of
illustration only, as of the Effective Date, a Participant shall be credited
with a Match Amount equal to the lesser of:

                  (a) fifty percent (50%) of the Deferral Amounts made to the
         Plan pursuant to a Deferral Election for the Fiscal Year, which
         Deferral Amounts shall be calculated prior to the withholding of any
         taxes; or

                  (b) two percent (2%) of the Participant's Excess Compensation
         for the Fiscal Year.

                                      4-3

<PAGE>   24

         4.3. Profit Sharing. For each Fiscal Year, the Profit Sharing Account
of a Participant who is eligible to share in the employer nonelective
contribution under the Profit Sharing Plan for the plan year of the Profit
Sharing Plan which ends on December 31 during such Fiscal Year shall be credited
with a Profit Sharing Amount under the Plan equal to that same percentage of the
Participant's Excess Compensation as the Participant's allocation of the Company
nonelective contributions and forfeitures under the Profit Sharing Plan for such
plan year of the Profit Sharing Plan is a percentage of the Participant's
Compensation as limited by the Compensation Limit for such plan year. The
foregoing shall be subject to the following:

                  (a) Initial Fiscal Year. For the Fiscal Year commencing on the
         Effective Date and ending on March 31, 2000, no Profit Sharing Amounts
         shall be credited to the Profit Sharing Account of any Senior
         Executive.

                  (b) Subsequent Years. For each Fiscal Year thereafter, a
         Profit Sharing Amount shall be credited to the Profit Sharing Account
         of each Participant who is a Participant as of the last day of such
         Fiscal Year. Such Profit Sharing Amount shall be calculated taking into
         account all of the Participant's Base Salary and Bonus for such Fiscal
         Year which is Excess Compensation, including Base Salary and Bonus for
         portions of such Fiscal Year which are prior to the Participant's
         enrollment in the Plan. Such amount shall be credited to the Profit
         Sharing Account of such Participant as of the later of the last day of
         such Fiscal Year or the date on which the employer nonelective
         contributions actually are made to the Profit Sharing Plan for the plan
         year ending December 31 in such Fiscal Year.

                  (c) Change of Plan Year. If the plan year of the Profit
         Sharing Plan shall change, the Compensation Committee shall determine a
         Profit Sharing Amount which shall reasonably take into account the
         effect of the change of plan year of the Profit Sharing Plan.

                  (d) Other Plans. If a Participant is a participant in a tax
         qualified retirement plan of any Participating Company or Affiliated
         Company other than the Profit Sharing Plan, such Participant's Profit
         Sharing Amount under this Plan shall be the same percentage of his Base
         Salary and Bonus as the amount credited for Participants who are
         participants in the Profit Sharing Plan even if the amount allocated
         under such other tax qualified retirement plan is different from the
         amount

                                      4-4

<PAGE>   25

         allocated under the Profit Sharing Plan, the plan year of such other
         plan is different from the plan year of the Profit Sharing Plan or the
         other plan is a different type of tax qualified retirement plan (such
         as a defined benefit plan).

         4.4. Establishment of Accounts. The Administrator or its designated
representative shall establish a Deferral Account, a Match Account, and a Profit
Sharing Account in the name of each Participant on its books and records. All
amounts credited to the Accounts of any Participant, former Participant, or
Beneficiary shall constitute a general, unsecured liability of the Participating
Companies to such person.

         4.5. Crediting of Deferral Amounts, Match Amounts and Profit Sharing
Amounts. Amounts shall be credited to the appropriate Accounts at the following
times:

                  (a) Deferral Amounts. Deferral Amounts shall be credited to a
         Participant's Deferral Account at the time that the Participant's
         Compensation is reduced pursuant to Section 4.1 hereof; and

                  (b) Match Amounts. Match Amounts shall be credited to a
         Participant's Match Account at the time that matching contributions
         would have been credited to the Profit Sharing Plan if the Deferral
         Amounts on which the Match Amounts are based were instead deferred
         under the Profit Sharing Plan (and the limitations under Code Sections
         401(a)(17), 401(k)(3), 401(m)(2), 402(g), and 415 were not been
         applicable), adjusted as may be necessary thereafter; and

                  (c) Profit Sharing Amounts. Profit Sharing Amounts shall be
         credited to the Participant's Profit Sharing Account at the time that
         such amounts would have been credited to the Profit Sharing Plan if the
         limitations under Code Section 401(a)(17) were not been applicable.

         4.6. Withholding. The Company may withhold from any Deferral Amount,
Match Amount or Profit Sharing Amount, such amount as may be required for
purposes of payment of Social Security, Medicare and other applicable taxes. In
the event that such taxes are withheld, the amount credited to a Participant's
Deferral Account, Match Account, or Profit Sharing Account shall be reduced by
the amount of such withholding.

                                      4-5

<PAGE>   26

         4.7. Adjustment of Accounts. The Accounts of Participants, former
Participants, and Beneficiaries of deceased Participants shall be adjusted for
earnings, gains and losses as if such Accounts held actual assets and such
assets were invested in Investment Funds in accordance with Section 4.8 hereof.
The value of each Participant's Accounts shall be determinable on a daily basis
as follows, using the terms and methods in the order defined below:

                  (a) Beginning Balance. The balance at the beginning of the
         day. This equals the ending balance as of the end of the most recent
         day upon which the New York Stock Exchange was open for trading.

                  (b) Sub-Ending Balance. The beginning balance, plus Deferral
         Amounts, plus Match Amounts, plus Profit Sharing Amounts, and less any
         distributions and forfeitures, which are made or occur as of such date.

                  (c) Investment earnings. Investment earnings, gains and losses
         determined pursuant to this Section will be credited to each
         Participant's Accounts as of each day upon which the New York Stock
         Exchange is open for trading.

                  (d) Ending Balance. The sub-ending balance plus investment
         earnings, gains and losses.

         4.8. Investment Funds and Elections. The Company shall designate
Investment Funds for the investment of Accounts as if such Accounts held actual
assets. The Investment Funds may include but shall not be limited to the
following types of funds, which can be managed on an individual basis or as part
of a mutual fund as determined by the Company:

                  (a) money market funds;

                  (b) mutual funds;

                  (c) equity funds;

                  (d) fixed income funds;

                  (e) balanced funds;

                                      4-6

<PAGE>   27

                  (f) any pooled investment fund established by a bank;

                  (g) any insurance company's general account; and

                  (h) any special account established and maintained by any
         insurance company.

The Company shall have the sole discretion to determine the number of Investment
Funds to be designated hereunder and the nature of the funds and may change or
eliminate the Investment Funds designated hereunder from time to time.

         Participants and former Participants shall direct the investment of
their Accounts among the Investment Funds designated by the Company as though
such Accounts held actual assets. Any such directions of investment shall be
subject to such rules as the Company and Administrator may prescribe, including,
but not limited to, rules concerning the manner of providing investment
directions and the frequency of changing such investment directions. In the
event a Participant or former Participant does not direct the investment of any
portion of his Accounts, such undirected portion shall be deemed to be invested
in one or more Investment Funds as the Administrator or its designated
representative designates.

                                      4-7

<PAGE>   28

                                   ARTICLE 5
                                   ---------

                 ELIGIBILITY FOR RETIREMENT AND RELATED BENEFITS
                 -----------------------------------------------


         5.1. Normal or Late Retirement. A Participant who continues in the
employ of a Participating Company or an Affiliated Company until his Normal
Retirement Date shall be eligible to retire on or after such date and to receive
a distribution of the amounts credited to his Accounts hereunder, in such form
as is provided in Article 6 hereof. The Benefit Commencement Date for a
Participant who retires from the employ of a Participating Company or an
Affiliated Company on or after his Normal Retirement Date shall be the date
which is thirty (30) days following his date of Retirement.

         5.2. Early Retirement. A Participant who continues in the employ of a
Participating Company or an Affiliated Company until his Early Retirement Date
shall be eligible to retire on or after such date and to receive a distribution
of the amounts credited to his Accounts hereunder, in such form as is provided
in Article 6 hereof. The Benefit Commencement Date for a Participant who retires
on or after his Early Retirement Date and prior to his Normal Retirement Date
shall, in the absence of an election of an earlier date pursuant to Section 5.8
hereof, be his Normal Retirement Date.

         5.3. Vested Deferred Retirement. A Participant who continues in the
employ of a Participating Company or an Affiliated Company until he has
completed at least one (1) year of Continuous Service, or whose Vested
Percentage is otherwise greater than zero (0), but whose Termination of
Employment occurs for any reason other than his Disability prior to the earlier
of his Early Retirement Date or his Normal Retirement Date, shall be eligible to
receive a distribution of his Vested Interest hereunder, in such

                                      5-1

<PAGE>   29

form as is provided in Article 6 hereof. The Benefit Commencement Date for a
former Participant eligible to receive a vested deferred retirement benefit
shall be his Normal Retirement Date, or if he has completed seven (7) or more
years of Continuous Service, such earlier date, if any, as he may elect pursuant
to Section 5.8 hereof.

         5.4. Disability Retirement Benefit. A Participant who has a Termination
of Employment due to his Disability shall receive a distribution of the amounts
credited to his Accounts hereunder, in such form as is provided in Article 6
hereof. The Benefit Commencement Date for a Participant who has a Termination of
Employment due to his Disability shall be as soon as reasonably practicable, but
not later than sixty (60) days following the date of such Termination of
Employment.

         5.5. Withdrawal Rights and Short Term Deferrals.

                  (a) Withdrawal Right Following Change of Control. During the
         two (2) year period following a Change of Control, a Participant may
         elect, in lieu of the amounts credited to his Accounts hereunder, to
         withdraw, in the Single Sum Form described in Section 6.3 hereof, the
         amounts credited to his Accounts hereunder, subject to the following
         penalties:

                           (i)  the amounts credited to his Accounts shall be
                                reduced by ten percent (10%); and

                           (ii) upon such withdrawal the Participant's Account
                                balances shall be cancelled and the Participant
                                shall no longer be eligible to participate in
                                the Plan.

                  (b) Hardship Withdrawal. In the event that the Administrator,
         upon application of a Participant, determines in its sole discretion,
         that the Participant has suffered an "unforeseeable emergency" as
         defined for purposes of Section 457 of the Code, the Company shall
         first suspend Deferral Amounts for the remainder of the then current
         Fiscal Year and then pay to the Participant an amount, not in excess of
         the sum of the Participant's (i) Deferral Account and (ii) Match and
         Profit Sharing Accounts multiplied by the Participant's Vested
         Percentage, as applicable, necessary to satisfy the emergency. For
         purposes of this Plan, an unforeseeable emergency is an unanticipated
         emergency that is caused by an event beyond the control of the
         Participant and that would result in

                                      5-2

<PAGE>   30

         severe financial hardship to the Participant if the distribution were
         not permitted, as may result from illness, casualty loss or sudden
         financial reversal. Cash needs arising from foreseeable events, such as
         the purchase of a residence or education expenses for children, shall
         not be considered the result of an unforeseeable financial emergency.
         Such distribution shall be made in the Single Sum Form as described in
         Section 6.3 hereof. To the extent of such withdrawal, the Participant's
         Account balances shall be cancelled.

                  (c) Short Term Deferrals. In the event that the Participant,
         in accordance with Section 4.1(d) hereof, has elected to defer a
         portion of his Base Salary or Bonus to a specific date, such payment
         shall be made in the Single Sum Form as of such date, subject to the
         superseding provisions of Section 4.1(d) hereof.

         5.6. Application. Each Participant who is eligible for a retirement
benefit or a withdrawal pursuant to this Article shall apply therefor, in
writing, on such form or forms as the Administrator shall prescribe in
accordance with the provisions of Article 6 hereof.

         5.7. Forfeiture and Payment Delay Due to Cause or Breach of the
Restrictive Covenants. Notwithstanding the foregoing provisions of this Article
5 to the contrary, upon the Termination of Employment of a Participant for
Cause, such Participant shall forfeit the balance in his Match Account and
Profit Sharing Account and he shall thenceforth be ineligible to participate in
this Plan, and, except as otherwise provided in this Section, in no event shall
he be entitled to the receipt of any other benefit hereunder. Furthermore, upon
any finding that a Participant or former Participant has committed an act of
Cause or a Breach of the Restrictive Covenants, such Participant shall forfeit
the balance in his Match Account and Profit Sharing Account and, except as
otherwise provided in this Section, any future payments under the Plan shall be
canceled. Amounts previously paid shall not be recoverable. The balance of the
Participant's Deferral Account shall not be forfeited. However, payment of such
amount shall not

                                      5-3

<PAGE>   31

commence until any Breach of the Restricted Covenants shall have ceased. In the
event of a disagreement between the Participant and the Compensation Committee
as to whether a Participant's Termination of Employment was for Cause, or
whether there has been a Breach of the Restrictive Covenants, or whether such a
Breach of the Restrictive Covenants shall have ceased, then, notwithstanding any
contrary provision of this Plan, payment of benefits hereunder shall be delayed
pending resolution of such disagreement pursuant to the Plan's claims procedure.

         5.8. Election of Earlier Benefit Commencement Date. Any Participant may
at any time prior to his Termination of Employment elect in writing a Benefit
Commencement Date earlier than the normal applicable Benefit Commencement Date,
provided that such earlier Benefit Commencement Date shall not be a date prior
to the later of his date of Retirement or his Early Retirement Date, and
provided further that no such earlier Benefit Commencement Date shall become
effective unless:

                  (a) such Participant has at least seven (7) years of
         Continuous Service; and

                  (b) such Participant retires from the employ of a
         Participating Company or an Affiliated Company on or after his Early
         Retirement Date and prior to his Normal Retirement Date or has any
         other Termination of Employment (except termination due to his
         Disability) prior to his Early Retirement Date.

Any election of an earlier Benefit Commencement Date shall be made by the
Participant at least thirteen (13) months prior to such earlier Benefit
Commencement Date. Such election shall be on a form prescribed for the purpose
by the Administrator and signed by the Participant. Such election shall be
deemed to be made when it shall have been received by the Administrator or its
designated representative. A Participant who is

                                      5-4

<PAGE>   32

electing an earlier Benefit Commencement Date may at any time prior to his
Termination of Employment and at least thirteen (13) months prior to such
earlier Benefit Commencement Date:

                           (i)  revoke an election previously made under this
                                Section by written notice duly filed with the
                                Administrator or its designated representative,
                                in which event the Benefit Commencement Date
                                shall be deemed to be the normal Benefit
                                Commencement Date provided in Sections 5.2 or
                                5.3 hereof, as applicable; or

                           (ii) change his election by written notice and
                                designation duly made and filed with the
                                Administrator or its designated representative
                                pursuant to this Section, provided that such
                                notice is received by the Administrator or its
                                designated representative at least thirteen (13)
                                months prior to the Benefit Commencement Date
                                specified in such notice and designation.

                                      5-5

<PAGE>   33




                                   ARTICLE 6
                                   ---------

                          FORMS OF RETIREMENT BENEFITS
                          ----------------------------


         6.1. Normal Form. The normal form of retirement benefits payable to a
Participant who is eligible therefor pursuant to Article 5 hereof shall be the
Ten Year Installment Form (Form 1) described in Section 6.3 hereof.

         6.2. Election of Other Forms. Subject to certain restrictions described
herein, in lieu of receiving his retirement benefits in accordance with the
normal form set forth in Section 6.1 hereof, a Participant or former Participant
who is eligible to receive retirement benefits pursuant to Article 5 hereof may
elect, in writing, to receive his retirement benefits on the basis of any other
form of retirement benefits described in Section 6.3 hereof. Any election of
another form of retirement benefits shall be made by a Participant at least
thirteen (13) months prior to his Benefit Commencement Date. Any such election
may be revoked and made again any number of times as long as such revocation and
new election is made at least thirteen (13) months prior to his Benefit
Commencement Date.

         Such election shall be on a form prescribed for the purpose by the
Administrator and shall be signed by the Participant. Such election shall be
deemed to be made when it shall have been received by the Administrator or its
designated representative.

         6.3. Forms. The forms of retirement benefits payable under this Plan
are as follows:

         Form 1. Ten Year Installment Form. A Participant who receives payment
of his benefits under the Ten Year Installment Form shall receive a retirement
benefit

                                      6-1

<PAGE>   34

commencing on his Benefit Commencement Date and providing a total of ten (10)
substantially equal annual installments (i.e., 1/10th the first year, then 1/9th
the next, etc.) to the Participant or, if he shall die prior to the completion
of said installments, the remaining amount shall be paid in the Single Sum Form
to his Beneficiary within sixty (60) days following the date of the
Participant's death.

         Form 2. Alternative Installment Form. A Participant who receives
payment of his retirement benefits under the Alternative Installment Form shall
receive a retirement benefit commencing on his Benefit Commencement Date and
providing a total of five (5) annual installments, fifteen (15) annual
installments or such other number of annual installments, which shall not exceed
twenty (20) installments, as are authorized by the Administrator (as such
Participant shall designate in writing) in substantially equal amounts to the
Participant, unless the Participant elects, with the consent of the
Administrator, to receive installments which are not substantially equal and
vary from year to year (as such Participant shall designate in writing). In the
event the Participant shall die prior to the completion of said installments,
the remaining amount shall be paid in the Single Sum Form to his Beneficiary
within sixty (60) days following the date of the Participant's death.

         Form 3. Single Sum Form. A Participant who receives payment of his
retirement benefits under the Single Sum Form shall receive a single sum payment
on his Benefit Commencement Date in lieu of payments under Forms 1 or 2.
Notwithstanding the foregoing, the Single Sum Form is available only:

                  (a) to a Participant in payment of a withdrawal pursuant to
         Section 5.5 hereof following a Change of Control or due to a hardship;

                  (b) to a Participant in payment of a distribution pursuant to
         Section 12.2 hereof upon termination of the Plan;

                                      6-2

<PAGE>   35

                  (c) to a Beneficiary as a death benefit pursuant to Section
         7.1 or 7.2 hereof;

                  (d) to a Participant:

                           (i)  if the benefit is being paid due to his
                                Retirement on or after his attainment of the
                                first to occur of his Early Retirement Date or
                                Normal Retirement Date; and

                           (ii) provided such payment is not made earlier than
                                six (6) months after his Termination of
                                Employment; or

                  (e) to a Participant if the benefit is being paid due to his
         Termination of Employment due to his Disability.

The Single Sum Form shall not be payable to any Participant whose benefit is
payable due to his Vested Deferred Retirement pursuant to Section 5.3 hereof,
regardless of when payable.

         6.4. Terms and Conditions of Forms. The forms of retirement benefits
described in Section 6.3 hereof shall be subject to the following conditions:

                  (a) Except for payment of the Single Sum Form, retirement
         benefits shall be paid annually on the first day of the Plan Year.

                  (b) Retirement benefits which are payable during the life of a
         Participant or spouse of a Participant shall commence on the date
         specified in this Plan, if such person is then living, and shall end
         with the payment made as of the first day of the Plan Year during which
         such person shall die.

                  (c) Regardless of the form of retirement benefits under which
         a Participant was going to receive payment, if a Participant shall die
         prior to his Benefit Commencement Date, no retirement benefits shall be
         payable to the Beneficiary of the Participant under this Article 6.
         Instead, benefits, if any, shall be payable under Article 7 hereof.

                  (d) If any Participant shall die after his Benefit
         Commencement Date, his Beneficiary shall receive such payment, if any,
         provided for under the form of retirement benefits described in Section
         6.3 hereof, which in each case shall provide for the payment of any
         remaining amount to his Beneficiary in the Single Sum Form within sixty
         (60) days following the Participant's death.

                                      6-3

<PAGE>   36

                  (e) If any Participant was to have received retirement
         benefits under Form 1 or Form 2 and his Beneficiary shall die prior to
         his Benefit Commencement Date, then the Participant shall receive his
         retirement benefits under such Form and he shall be entitled to
         designate a new Beneficiary.

                  (f) If any Participant is receiving retirement benefits under
         Form 1 or Form 2 and his Beneficiary shall die after his Benefit
         Commencement Date, but prior to the death of the Participant, such
         Participant shall continue to receive the annual retirement benefits
         payable under such form and he shall be entitled to designate a new
         Beneficiary.

                  (g) Regardless of the form of retirement benefits under which
         a Participant was going to receive payment, a Participant who has a
         Termination of Employment due to his Disability shall receive his
         retirement benefits in the Single Sum Form described in Section 6.3
         hereof as soon as practicable, but not later than sixty (60) days
         following such Termination of Employment.

                  (h) Payments generally shall be calculated on the basis of the
         value of the Participant's Accounts determined as of the November 1
         last preceding the payment date, except that the final payment shall
         use the current value.

         6.5. Revocation or Modification of Elected Forms. Any Participant may
at any time at least thirteen (13) months before his Benefit Commencement Date:

                  (a) revoke an election previously made under Section 6.2
         hereof by written notice duly filed with the Administrator or its
         designated representative in which event the Participant shall be
         treated the same as though his optional election had not been filed; or

                  (b) change his election from one to another of the forms
         described in Section 6.3 hereof by written notice and designation duly
         made and filed with the Administrator or its designated representative
         pursuant to Section 6.2 hereof.

         6.6. Consent Not Required. No consent shall be required of a person in
order to elect another form of retirement benefits or to revoke such an
election.

         6.7. Correction of Amounts Payable. Anything contained in this Article
6 to the contrary notwithstanding, if, after the Retirement or other Termination
of Employment of a Participant, the amount of retirement benefit which would
have been

                                      6-4

<PAGE>   37

payable to him under this Plan is subject to any deduction, change, offset or
correction, then the amount payable to such Participant and his Beneficiary
shall be adjusted to reflect any such deduction, change, offset or correction.

         6.8. Timing of Payments. Payments under this Plan generally shall be
made as of the time specified elsewhere in this Plan. Notwithstanding the
foregoing provision of this Section and such other provisions to the contrary,
the requirement that a distribution commence on or before a particular date
shall not apply if the amount of payment required to be made on such date cannot
be ascertained by such date or the Administrator is unable to locate the
Participant after making reasonable efforts to do so, provided that, within
sixty (60) days after such amount can be ascertained or the Participant is
located, a payment is made retroactive to such date. This Section is not
intended to permit a Participant, former Participant or Beneficiary to elect to
defer payment beyond the dates otherwise provided therefor in this Plan.


                                      6-5


<PAGE>   38




                                   ARTICLE 7
                                   ---------

                                 DEATH BENEFITS
                                 --------------


         7.1. Death On Or After Benefit Commencement Date. In the event of the
death of a Participant or former Participant on or after his Benefit
Commencement Date, there shall be paid to his Beneficiary, if any, the death
benefit, if any, provided for under the form of retirement benefits described in
Section 6.3 hereof, which in each case shall provide for the payment of any
remaining amount to his Beneficiary in the Single Sum Form described in Section
6.3 hereof as soon as reasonably practicable, but not later than sixty (60) days
following the death of the Participant or the former Participant.

         7.2. Death Prior To Benefit Commencement Date. In the event of the
death of a Participant while he is an Employee, or a former Participant who is
no longer an Employee and whose Vested Percentage is greater than zero (0), and
whose Benefit Commencement Date has not occurred, his Beneficiary shall be
entitled to receive a death benefit pursuant to this Section which shall be
equal to the deceased Participant's Vested Interest which shall be paid in the
Single Sum Form described in Section 6.3 hereof as soon as reasonably
practicable, but not later than sixty (60) days following the death of the
Participant.

         7.3. Automatic Beneficiary. Unless a Participant or former Participant
has designated a Beneficiary in accordance with the provisions of Section 7.4
hereof, his Beneficiary shall be deemed to be the person or persons in the first
of the following classes in which there are any survivors of such Participant or
former Participant:

                  (a) his spouse at the time of his death;

                  (b) his issue, per stirpes;

                                      7-1

<PAGE>   39

                  (c) his parents; or

                  (d) the executor or administrator of his estate.

         7.4. Designated Beneficiary or Beneficiaries. A Participant or former
Participant may sign a document designating a Beneficiary or Beneficiaries to
receive any benefit payable under Section 7.2 hereof. In the event a Participant
or former Participant dies at a time when he has a designation on file which
does not dispose of the total benefit distributable under Section 7.2 hereof,
then the portion of such benefit distributable on behalf of said Participant or
former Participant, the disposition of which was not determined by the deceased
Participant's or former Participant's designation, shall be distributed to a
Beneficiary determined under Section 7.3 hereof. Any ambiguity in a
Participant's or former Participant's Beneficiary designation shall be resolved
by the Administrator.

                                      7-2

<PAGE>   40




                                   ARTICLE 8
                                   ---------

                    RIGHTS OF PARTICIPANTS AND BENEFICIARIES
                    ----------------------------------------


         8.1. Creditor Status of Participant and Beneficiary. This Plan
constitutes the unfunded, unsecured promise of the Participating Companies to
make benefit payments to each Participant and Beneficiary in the future and
shall be a liability solely against the general assets of the Participating
Companies. The Participating Companies shall not be required to segregate, set
aside or escrow any amounts for the benefit of any Participant or Beneficiary.
Each Participant and Beneficiary shall have the status of a general unsecured
creditor of the Participating Companies and may look only to the Participating
Companies and their general assets for payment of benefits under this Plan.

         8.2. Rights with Respect to a Trust. Any Trust, and any assets held
thereby to assist the Participating Companies in meeting their obligations under
this Plan, shall in no way be deemed to controvert the provisions of Section 8.1
hereof.

         8.3. Investments. In its sole discretion, the Company may acquire (or
direct the Participating Companies to acquire) insurance policies, annuities or
other financial vehicles for the purpose of providing future assets of the
Participating Companies to meet their anticipated liabilities under this Plan.
Such policies, annuities or other investments shall at all times be and remain
unrestricted general property and assets of the Participating Companies or
property of a Trust. Participants and Beneficiaries shall have no rights, other
than as general creditors, with respect to such policies, annuities or other
acquired assets.

                                      8-1

<PAGE>   41




                                    ARTICLE 9
                                    ---------

                                      TRUST
                                      -----


         9.1. Establishment of Trust. Notwithstanding any other provision or
interpretation of this Plan, the Company may establish a Trust in which to hold
cash, insurance policies or other assets to be used to make, or reimburse the
Participating Companies for, payments to the Participants or Beneficiaries of
all or part of the benefits under this Plan. Any Trust assets shall at all times
remain subject to the claims of general creditors of the Participating Companies
in the event of their insolvency as more fully described in the Trust.

         9.2. Obligations of the Company. Notwithstanding the fact that a Trust
may be established under Section 9.1 hereof, the Company shall remain liable for
paying the benefits under this Plan. However, any payment of benefits to a
Participant or a Beneficiary made by such a Trust shall satisfy the Company's
obligation to make such payment to such person.

         9.3. Trust Terms. A Trust established under Section 9.1 hereof may be
revocable by the Company; provided, however, that such a Trust may become
irrevocable in accordance with its terms in the event of a Change of Control.
Such a Trust may contain such other terms and conditions as the Company may
determine to be necessary or desirable. The Company may terminate or amend a
Trust established under Section 9.1 hereof at any time, and in any manner it
deems necessary or desirable, subject to the preceding sentence and the terms of
any agreement under which any such Trust is established or maintained.

                                      9-1

<PAGE>   42




                                   ARTICLE 10
                                   ----------

                                CLAIMS PROCEDURE
                                ----------------


         10.1. Claim for Benefits. Any claim for benefits under this Plan shall
be made in writing to the Administrator in such a manner as the Administrator
shall reasonably prescribe. The Administrator shall process each such claim and
determine entitlement to benefits within thirty (30) days following its receipt
of a completed application for benefits unless special circumstances require an
extension of time for processing the claim. If such an extension of time for
processing is required, written notice of the extension shall be furnished to
the claimant prior to the termination of the initial thirty (30) day period. In
no event shall such extension exceed a period of thirty (30) days from the end
of such initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date as of which the
Administrator expects to render the final decision.

         If such a claim is wholly or partially denied by the Administrator, the
Administrator shall notify the claimant of the denial of the claim in writing,
delivered in person or mailed by first class mail to the claimant's last known
address. Such notice of denial shall contain:

                  (a) the specific reason or reasons for denial of the claim;

                  (b) a reference to the relevant Plan provisions upon which the
         denial is based;

                  (c) a description of any additional material or information
         necessary for the claimant to perfect the claim, together with an
         explanation of why such material or information is necessary; and

                  (d) an explanation of this Plan's claim review procedure.

                                      10-1

<PAGE>   43

If no such notice is provided, and if the claim has not been granted within the
time specified above for approval of the claim, the claim shall be deemed denied
and subject to review as described below. The interpretations, determinations
and decisions of the Administrator shall be final and binding upon all persons
with respect to any right, benefit and privilege hereunder, subject to the
review procedures set forth in this Article 10.

         10.2. Request for Review of a Denial of a Claim for Benefits. Any
claimant or any authorized representative of such claimant whose claim for
benefits under this Plan has been denied or deemed denied, in whole or in part,
by the Administrator may upon written notice delivered to the Appeals Committee
request a review by the Appeals Committee of such denial of his or her claim for
benefits. Such claimant shall have sixty (60) days from the date the claim is
deemed denied, or sixty (60) days from receipt of the notice denying the claim,
as the case may be, in which to request such a review. The claimant's notice
must specify the relief requested and the reason such claimant believes the
denial should be reversed.

         10.3. Appeals Procedure. The Appeals Committee is hereby authorized to
review the facts and relevant documents, including this Plan, to interpret this
Plan and other relevant documents and to render a decision on the appeal of the
claimant. Such review may be made by written briefs submitted by the claimant
and the Administrator or at a hearing, or by both, as shall be deemed necessary
by the Appeals Committee. Upon receipt of a request for review, the Appeals
Committee shall schedule a hearing to be held (subject to reasonable scheduling
conflicts) not less than thirty (30) nor more than forty-five (45) days from the
receipt of such request. The date and time of such hearing shall

                                      10-2

<PAGE>   44

be designated by the Appeals Committee upon not less than fifteen (15) days'
notice to the claimant and the Administrator unless both of them accept shorter
notice. The notice shall specify that such claimant must indicate in writing, at
least five (5) days in advance of the time established for such hearing, his
intention to appear at the appointed time and place, or the hearing will
automatically be canceled. The reply shall specify any other persons who will
accompany him to the hearing, or such other persons will not be admitted to the
hearing. The Appeals Committee shall make every effort to schedule the hearing
on a day and at a time which is convenient to both the claimant and the
Administrator. The hearing will be scheduled at the Company's headquarters
unless the Appeals Committee determines that another location would be more
appropriate. The claimant, or his duly authorized representative, may review all
pertinent documents relating to the claim in preparation for the hearing and may
submit issues and comments in writing prior to or during the hearing.

         10.4. Decision upon Review of Denial of Claim for Benefits. After the
review has been completed, the Appeals Committee shall render a decision in
writing, a copy of which shall be sent to both the claimant and the
Administrator. In making its decision the Appeals Committee shall have full
power, authority, and discretion to determine any and all questions of fact,
resolve all questions of interpretation of this instrument or related documents
which may arise under any of the provisions of this Plan or such documents as to
which no other provision for determination is made hereunder, and exercise all
other powers and discretions necessary to be exercised under the terms of this
Plan which it is herein given or for which no contrary provision is made and to
determine the right to benefits of, and the amount of benefits, if any, payable
to, any

                                      10-3

<PAGE>   45

person in accordance with the provisions of this Plan. The Appeals Committee
shall render a decision on the claim review promptly, but not more than sixty
(60) days after the receipt of the claimant's request for review, unless a
hearing is held, in which case the sixty (60) day period shall be extended to
thirty (30) days after the date of the hearing. Such decision shall include
specific reasons for the decision, written in a manner calculated to be
understood by the claimant, and shall contain specific references to the
pertinent provisions of the Plan and related documents upon which the decision
is based. The decision on review shall be furnished to the claimant within the
appropriate time described above. If the decision on review is not furnished
within such time, the claim shall be deemed denied on review at the end of such
period. There shall be no further appeal from a decision rendered by the Appeals
Committee. The decision of the Appeals Committee shall be final and binding in
all respects on the Administrator, the Company and the claimant. Except as
otherwise provided by law, the review procedures of this Article 10 shall be the
claimant's sole and exclusive remedy and shall be in lieu of all actions at law,
in equity, pursuant to arbitration or otherwise.

         10.5. Establishment of Appeals Committee. The Board shall appoint the
members of an Appeals Committee which shall consist of three (3) or more
members. The members of the Appeals Committee shall remain in office at the will
of the Board, and the Board, from time to time, may remove any of said members
with or without cause. A member of the Appeals Committee may resign upon written
notice to the remaining member or members of the Appeals Committee and to the
Board, respectively. The fact that a person is a Participant or a former
Participant or a prospective Participant shall not disqualify him from acting as
a member of the Appeals Committee, nor shall

                                      10-4

<PAGE>   46

any member of the Appeals Committee be disqualified from acting on any question
because of his interest therein, except that no member of the Appeals Committee
may act on any claim which such member has brought as a Participant, former
Participant or Beneficiary under this Plan. In case of the death, resignation or
removal of any member of the Appeals Committee, the remaining members shall act
until a successor-member shall be appointed by the Board. At the Administrator's
request, the Secretary of the Company shall notify the Administrator in writing
of the names of the original members of the Appeals Committee, of any and all
changes in the membership of the Appeals Committee, of the member designated as
Chairman, and the member designated as Secretary, and of any changes in either
office. Until notified of a change, the Administrator shall be protected in
assuming that there has been no change in the membership of the Appeals
Committee or the designation of Chairman or of Secretary since the last
notification was filed with it. The Administrator shall be under no obligation
at any time to inquire into the membership of the Appeals Committee or its
officers. All communications to the Appeals Committee shall be addressed to its
Secretary at the address of the Company. Unless the Board shall appoint others
as the Appeals Committee, the three (3) Board members with the longest period of
active service on the Board shall constitute such Committee.

         10.6. Operations of Appeals Committee. On all matters and questions, a
decision of a majority of the members of the Appeals Committee shall govern and
control. Meetings may be held in person or by electronic means. In lieu of a
meeting, decisions may be made by unanimous written consent. The Appeals
Committee shall appoint one of its members to act as its Chairman and another
member to act as


                                      10-5

<PAGE>   47


Secretary. The terms of office of these members shall be determined by the
Appeals Committee, and either or both the Secretary and Chairman may be removed
by the other members of the Appeals Committee for any reason which such other
members may deem just and proper. The Secretary shall do all things directed by
the Appeals Committee. Although the Appeals Committee shall act by decision of a
majority of its members as above provided, nevertheless in the absence of
written notice to the contrary, every person may deal with the Secretary and
consider his acts as having been authorized by the Appeals Committee. Any notice
served or demand made on the Secretary shall be deemed to have been served or
made upon the Appeals Committee.

         10.7. Special Provisions Relating to Change of Control. In the event of
a Change of Control, then notwithstanding the contrary provisions of this
Article, for the two (2) year period following such Change of Control, the three
(3) individuals having the greatest amounts accrued under this Plan shall assume
the responsibilities of the Appeals Committee set forth in this Article. If one
or more of them shall not be able to serve or to continue to serve, the
individual or individuals, as applicable, having the next largest amounts
accrued under this Plan will serve in such person's or persons' place. If at any
time during such two (2) year period fewer than three (3) individuals have
amounts accrued under this Plan, such individual or individuals shall perform
the duties of the Appeals Committee. If only one (1) individual has amounts
accrued under this Plan, the Appeals Committee shall not consist of such
individual but shall consist of such individual as he and the Company shall
agree. If he and the Company shall fail to agree on a single individual, the
Appeals Committee shall consist of three (3) individuals, one

                                      10-6

<PAGE>   48

appointed by the Company, one appointed by the individual claiming benefits
hereunder, and a third selected by the other two (2).

                                      10-7

<PAGE>   49




                                   ARTICLE 11
                                   ----------

                                 ADMINISTRATION
                                 --------------


         11.1. Appointment of Administrator. The Board shall appoint the
Administrator which shall be any person(s), corporation or partnership
(including the Company itself) as said Board shall deem desirable in its sole
discretion. The Administrator may be removed or resign upon thirty (30) days'
written notice or such lesser period of notice as is mutually agreeable. Unless
the Board appoints another Administrator, the Compensation Committee shall be
the Administrator.

         11.2. Powers and Duties of the Administrator. Except as expressly
otherwise set forth herein, the Administrator shall have the authority and
responsibility granted or imposed on an "administrator" by ERISA. The
Administrator shall determine any and all questions of fact, resolve all
questions of interpretation of this Plan which may arise under any of the
provisions of this Plan as to which no other provision for determination is made
hereunder, and exercise all other powers and discretions necessary to be
exercised under the terms of this Plan which it is herein given or for which no
contrary provision is made. The Administrator shall have full power and
discretion to interpret this Plan and related documents, to resolve ambiguities,
inconsistencies and omissions, to determine any question of fact, and to
determine the rights and benefits, if any, of any Participant or other
applicant, in accordance with the provisions of this Plan. Subject to the
provisions of any claims procedure hereunder, the Administrator's decision with
respect to any matter shall be final and binding on all parties concerned, and
neither the Administrator nor any of its directors, officers, employees or
delegates nor, where applicable, the directors, officers or employees of any
delegate, shall be liable in that

                                      11-1

<PAGE>   50

regard except for gross abuse of the discretion given it and them under the
terms of this Plan. All determinations of the Administrator shall be made in a
uniform, consistent and nondiscriminatory manner with respect to all
Participants and Beneficiaries in similar circumstances. The Administrator, from
time to time, may designate one or more persons or agents to carry out any or
all of its duties hereunder.

         11.3. Engagement of Advisors. The Administrator may employ actuaries,
attorneys, accountants, brokers, employee benefit consultants, and other
specialists to render advice concerning any responsibility the Administrator,
Appeals Committee or Compensation Committee has under this Plan. Such persons
may also be advisors to any Participating Company.

         11.4. Payment of Costs and Expenses. The costs and expenses incurred in
the administration of this Plan shall be paid in either of the following manners
as determined by the Company in its sole discretion:

                  (a) the expenses may be paid directly by one or more of the
         Participating Companies; or

                  (b) the expenses may be paid out of the Trust, if any (subject
         to any restriction contained in such Trust or required by law).

Such costs and expenses include those incident to the performance of the
responsibilities of the Administrator, Appeals Committee or Compensation
Committee, including but not limited to, claims administration fees and costs,
fees of accountants, legal counsel and other specialists, bonding expenses, and
other costs of administering this Plan. Notwithstanding the foregoing, in no
event will any person serving in the capacity of Administrator, Appeals
Committee member or Compensation Committee member who is a full-time employee of
a Participating Company be entitled to any compensation for such services.

                                      11-2

<PAGE>   51




                                   ARTICLE 12
                                   ----------

                            AMENDMENT AND TERMINATION
                            -------------------------


         12.1. Power to Amend or Terminate. Except as otherwise provided herein
following a Change of Control, this Plan may be amended by the Company at any
time, or from time to time, and may be terminated by the Company at any time,
but no such amendment, modification or termination shall reduce the amounts
credited to the Accounts or Vested Percentage of any Participant, determined as
of the date of such amendment, modification or termination. Such amendment or
termination shall be in writing, executed by two or more officers of the Company
whose actions are authorized or ratified by the Board. This Plan may not be
amended (but may be terminated) during the two (2) year period following a
Change of Control except that amendments may be made as required by law.

         12.2. Effects of Plan Termination. If this Plan is terminated, then, on
and after the effective date of such termination, all deferrals and allocations
hereunder shall cease. Thereafter, the Vested Percentage of each Participant
shall become one hundred percent (100%) and the amounts credited to the Accounts
of each Participant shall be distributed to such Participant in the Single Sum
Form described in Section 6.3 hereof as soon as reasonably possible but not
later than ninety (90) days after the date of such termination.

         12.3. No Liability for Plan Amendment or Termination. Neither the
Company, nor any other Participating Company, nor any officer, Employee or
director thereof shall have any liability as a result of the amendment or
termination of this Plan. Without limiting the generality of the foregoing, the
Company shall have no liability for

                                      12-1

<PAGE>   52

terminating this Plan notwithstanding the fact that a Participant may have
expected to make future deferrals and have future allocations made on his behalf
hereunder had this Plan remained in effect.

                                      12-2

<PAGE>   53




                                   ARTICLE 13
                                   ----------

                             PARTICIPATING COMPANIES
                             -----------------------


         13.1. List of Participating Companies. The Participating Companies as
of the Effective Date are as follows:

Participating Companies                  Adoption Date       Termination Date
- -----------------------                  -------------       ----------------
Pioneer-Standard Electronics, Inc.       April 27, 1999
Pioneer-Standard of Maryland, Inc.       April 27, 1999
Pioneer-Standard Illinois, Inc.          April 27, 1999
Pioneer-Standard Minnesota, Inc.         April 27, 1999
Pioneer-Standard Electronics, Ltd.       April 27, 1999
Dickens Data Systems, Inc.               April 27, 1999

         13.2. Designation of Participating Companies. An Affiliated Company may
become a Participating Company under this Plan at any time. Such an Affiliated
Company, if organized under the laws of the United States of America or any
State, shall become a Participating Company, without the need for amendment
hereof, upon attaining such Affiliated Company status unless otherwise provided
by the Compensation Committee. Alternatively, such an Affiliated Company may
become a Participating Company by an amendment to Section 13.1 hereof which
specifies the name of the Affiliated Company, its Adoption Date and other
pertinent information.

13.3. Adoption of Supplements. The Company may determine that special provisions
shall be applicable to some or all of the Senior Executives of a Participating
Company, either in addition to or in lieu of certain provisions of this Plan. In
such event, the Company shall adopt a Supplement with respect to the
Participating Company which employs such individuals which Supplement shall
specify by name or otherwise the Senior Executives of the Participating Company
covered thereby and the

                                      13-1

<PAGE>   54

special provisions applicable to such Senior Executives. Any Supplement shall be
deemed to be a part of this Plan solely with respect to the Senior Executives
specified therein.

         13.4. Amendment of Supplements. The Company, from time to time, may
amend, modify or terminate any Supplement; provided, however, that no such
action shall operate so as to deprive any Senior Executive who was covered by
such Supplement of any vested rights to which he is entitled under this Plan or
the Supplement.

         13.5. Termination of Participation of Participating Company. A
Participating Company whose status as an Affiliated Company terminates shall no
longer be deemed a Participating Company as of the date of the termination of
such Affiliated Company status. Alternatively, the Company may terminate this
Plan with respect to Participants employed by any Participating Company by an
amendment to Section 13.1 hereof which specifies the name of the Participating
Company, and its Termination Date, and other pertinent information. Distribution
of the benefits of Participants employed by said Participating Company shall
thereupon be made in the manner provided in Article 12 hereof.

         13.6. Delegation of Authority. The Company is hereby fully empowered to
act on behalf of itself and the other Participating Companies as it may deem
appropriate in maintaining the Plan. Without limiting the generality of the
foregoing, such actions include obtaining and retaining relevant tax advantages
for the Plan. Furthermore, the adoption by the Company of any amendment to the
Plan or the termination thereof, will constitute and represent, without any
further action on the part of any Participating Company, the approval, adoption,
ratification or confirmation by

                                      13-2

<PAGE>   55

each Participating Company of any such amendment or termination. In addition,
the appointment of or removal by the Company of any member of the Appeals
Committee, any Administrator or other person under the Plan shall constitute and
represent, without any further action on the part of any Participating Company,
the appointment or removal by each Participating Company of such person.

         13.7. Amendment Restrictions and Procedures. Amendments authorized by
this Article 13, including those adding or removing a Participating Company,
shall be subject to the provisions of Article 12 hereof dealing with amendment
and termination of the Plan, as applicable.


                                      13-3
<PAGE>   56




                                   ARTICLE 14
                                   ----------

                                  MISCELLANEOUS
                                  -------------


         14.1. Non-Alienation. No benefits or amounts credited to Accounts under
this Plan shall be subject in any manner to be anticipated, alienated, sold,
transferred, assigned, pledged, encumbered, attached, garnished or charged in
any manner (either at law or in equity), and any attempt to so anticipate,
alienate, sell, transfer, assign, pledge, encumber, attach, garnish or charge
the same shall be void; nor shall any such benefits or amounts in any manner be
liable for or subject to the debts, contracts, liabilities, engagements or torts
of the person entitled to such benefits or amounts as are herein provided for
her or him.

         14.2. Tax Withholding. The Company or any other Participating Company
may withhold from a Participant's compensation or any payment made by it under
this Plan such amount or amounts as may be required for purposes of complying
with the tax withholding or other provisions of the Code or the Social Security
Act or any state or local income or employment tax act or for purposes of paying
any estate, inheritance or other tax attributable to any amounts payable
hereunder.

         14.3. Incapacity. If the Administrator determines that any Participant
or other person entitled to payments under this Plan is incompetent by reason of
physical or mental disability and is consequently unable to give a valid receipt
for payments made hereunder, or is a minor, the Administrator may order the
payments becoming due to such person to be made to another person for his
benefit, without responsibility on the part of the Administrator to follow the
application of amounts so paid. Payments made pursuant to this Section shall
completely discharge the Administrator, the Company and

                                      14-1

<PAGE>   57

the other Participating Companies and the Appeals Committee with respect to such
payments.

         14.4. Administrative Forms. All applications, elections and
designations in connection with this Plan made by a Participant or other person
shall become effective only when duly executed on forms provided by the
Administrator and filed with the Administrator.

         14.5. Independence of Plan. Except as otherwise expressly provided
herein, this Plan shall be independent of, and in addition to, any other benefit
agreement or plan of a Participating Company or any rights that may exist from
time to time thereunder.

         14.6. No Employment Rights Created. This Plan shall not be deemed to
constitute a contract of employment between the Company or any other
Participating Company and any Participant, nor confer upon any Participant the
right to be retained in the service of the Company or any other Participating
Company for any period of time, nor shall any provision hereof restrict the
right of any Company to discharge or otherwise deal with any Participant.

         14.7. Responsibility for Legal Effect. Neither the Company, nor any
other Participating Company, nor the Administrator or the Compensation Committee
or Appeals Committee, nor any officer, member, delegate or agent of any of them,
makes any representations or warranties, express or implied, or assumes any
responsibility concerning the legal, tax, or other implications or effects of
this Plan. Without limiting the generality of the foregoing, no Participating
Company shall have any liability for the

                                      14-2

<PAGE>   58

tax liability which a Participant may incur resulting from participation in this
Plan or the payment of benefits hereunder.

         14.8. Limitation of Duties. The Company, the Participating Companies,
the Compensation Committee, the Administrator, the Appeals Committee, and their
respective officers, members, employees and agents shall have no duty or
responsibility under this Plan other than the duties and responsibilities
expressly assigned to them herein or delegated to them pursuant hereto. None of
them shall have any duty or responsibility with respect to the duties or
responsibilities assigned or delegated to another of them.

         14.9. Limitation of Sponsor Liability. Any right or authority
exercisable by the Company, pursuant to any provision of this Plan, shall be
exercised in the Company's capacity as sponsor of this Plan, or on behalf of the
Company in such capacity, and not in a fiduciary capacity, and may be exercised
without the approval or consent of any person in a fiduciary capacity. Neither
the Company, nor any of its respective officers, members, employees, agents and
delegates, shall have any liability to any party for its exercise of any such
right or authority.

         14.10. Successors. The terms and conditions of this Plan shall inure to
the benefit of and bind the Company, the other Participating Companies, the
Participants, their Beneficiaries, and the successors and personal
representatives of the Participants and their Beneficiaries.

         14.11. Controlling Law. This Plan shall be construed in accordance with
the laws of the State of Ohio to the extent not preempted by laws of the United
States.

                                      14-3

<PAGE>   59

         14.12. Headings and Titles. The Section headings and titles of Articles
used in this Plan are for convenience of reference only and shall not be
considered in construing this Plan.

         14.13. General Rules of Construction. The masculine gender shall
include the feminine and neuter, and vice versa, as the context shall require.
The singular number shall include the plural, and vice versa, as the context
shall require. The present tense of a verb shall include the past and future
tenses, and vice versa, as the context may require.

         14.14. Execution in Counterparts. This Plan may be executed in any
number of counterparts each of which shall be deemed an original and said
counterparts shall constitute but one and the same instrument and may be
sufficiently evidenced by any one counterpart.

         14.15. Severability. In the event that any provision or term of this
Plan, or any agreement or instrument required by the Administrator hereunder, is
determined by a judicial, quasi-judicial or administrative body to be void or
not enforceable for any reason, all other provisions or terms of this Plan or
such agreement or instrument shall remain in full force and effect and shall be
enforceable as if such void or nonenforceable provision or term had never been a
part of this Plan, or such agreement or instrument except as to the extent the
Administrator determines such result would have been contrary to the intent of
the Company in establishing and maintaining this Plan.

         14.16. Indemnification. The Participating Companies shall jointly and
severally indemnify, defend, and hold harmless any Employee, officer or director
of any Participating Company for all acts taken or omitted in carrying out the
responsibilities of

                                      14-4

<PAGE>   60

the Company, Participating Company, Compensation Committee, Administrator or
Appeals Committee under the terms of this Plan or other responsibilities imposed
upon such individual by law. This indemnification for all such acts taken or
omitted is intentionally broad, but shall not provide indemnification for any
civil penalty that may be imposed by law, nor shall it provide indemnification
for embezzlement or diversion of Plan funds for the benefit of any such
individual. The Participating Companies shall jointly and severally indemnify
any such individual for expenses of defending an action by a Participant,
dependent, service provider, government entity or other person, including all
legal fees and other costs of such defense. The Participating Companies shall
also reimburse any such an individual for any monetary recovery in a successful
action against such individual in any federal or state court or arbitration. In
addition, if a claim is settled out of court with the concurrence of the
Company, the Participating Companies shall jointly and severally indemnify any
such individual for any monetary liability under any such settlement, and the
expenses thereof. Such indemnification will not be provided to any person who is
not a present or former Employee or director of a Participating Company nor
shall it be provided for any claim by a Participating Company against any such
individual.

                                      14-5

<PAGE>   61

         IN WITNESS WHEREOF, PIONEER-STANDARD ELECTRONICS, INC., the Company, by
its appropriate officers duly authorized, has caused this Plan to be executed
and adopted as of the 27th day of April, 1999.

                                    PIONEER-STANDARD ELECTRONICS, INC.

                                                ("Company")

                                    By  /s/ James L. Bayman
                                        -------------------------------

                                    And /s/ Arthur Rhein
                                        -------------------------------








                                      14-6
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.Q
<SEQUENCE>5
<FILENAME>ex10-q.txt
<DESCRIPTION>EXHIBIT 10(Q)
<TEXT>

<PAGE>   1
                                                                   Exhibit 10(q)


NON-COMPETITION AGREEMENT

                                                                  [PIONEER LOGO]
- --------------------------------------------------------------------------------
NON-COMPETITION AGREEMENT

PIONEER STANDARD                              Name:      Thomas G. Pitera
ELECTRONICS, INC.                             Position:  President, IED Division


         FOR VALUABLE CONSIDERATION, in the form of executive benefit plans
introduced in fiscal year 2000 over and beyond entitlement, the receipt and
sufficiency of which are hereby acknowledged, the individual named above
("Employee") hereby agrees as follows:

1. POSITION. Pioneer-Standard Electronics, Inc. ("the Company") shall employ
Employee in the position set forth above, with duties and responsibilities to be
determined by the Company. The Company reserves the right to add to, subtract
from, or otherwise change these duties, and to reassign Employee or change
his/her title consistent with its business judgment of the best interests of the
Company.

Employee shall use his or her best efforts at all times to promote, protect, and
advance the best interests of the Company. Employee will devote his or her
entire business time and attention to the Company, and will not promote the
business or products of any other company or engage in any outside business
activity without the prior written consent of the Company during his or her
employment with the Company.

2. COMPENSATION. Employee shall be compensated as deemed appropriate by the
Company's management. His/her salary and/or incentive pay shall be reviewed
regularly and shall be subject to increases or decreases consistent with the
Company's assessments of performance, relative contribution, and/or the
particular business conditions of the Company. Employee shall be eligible as per
eligibility requirements and other plan provisions to participate in any and all
employee benefit plans made available from time to time to the Company's
employees.

3. DURATION. Employee may terminate this Agreement at any time and such
termination shall be effective on the date of his or her notice, unless
otherwise mutually agreed. Similarly, the Company has the right to terminate
this Agreement and Employee's employment at any time, with or without advance
notice or cause. Should the Company terminate the Employee's employment without
cause, the Company will continue to pay the employee monthly base salary, target
incentive and benefit coverage for twelve (12) months (the "severance
payments"). In the event that (1) employee's employment is terminated for cause
or (2) employee voluntarily resigns from employment with the company, then the
company shall have no obligation for severance payments under this provision.
Absolutely no one except the President and Chief Operating Officer of the
Company may change this "at will" relationship, and then only in writing.
Employee acknowledges that any reliance on any representations, oral or
otherwise, contrary to "at will" employment is unreasonable and shall not form
the basis for any actions or forbearances on his or her part.

4. NONDISCLOSURE. Employee agrees at all times to hold as secret and
confidential any and all knowledge, technical information, business information,
developments, trade secrets, know-how and confidences of the Company and of any
third party who has entrusted its own such information to the Company,
including, but not limited to, the following:

(a) any formula, pattern, device, plan, drawing, technical information,
blueprint, data, diagram, model, specification, computer program, process or
compilation of same which is, or is designed to be, used in the business of the
Company or results from its activities;

(b) all business plans and/or strategies, financial information, customer and
sales information, price lists, vendor information, cost information, and
personnel information; and

(c) ideas, inventions, discoveries, and improvements, whether or not patentable,
belonging to the Company or which Employee conceives or makes, alone or with
others, during or relating to his/her employment with the Company, and which
were made partially or wholly with the use of equipment, supplies, facilities or
information of the Company, or were developed partially or wholly on the
Company's time (collectively, "Confidential Information"). Employee agrees not
to use this Confidential Information for his/her own benefit or for the benefit
of others (except as Company duties may require) either during or after
employment with the Company without prior written consent from the Company.
Further, Employee agrees not to remove or aid in the removal from the premises
of the Company such Confidential Information or any property or material which
relates thereto. Unauthorized removal of Confidential Information will lead to
appropriate discipline, up to and including termination of employment.

<PAGE>   2


NON-COMPETITION AGREEMENT

                                                                  [PIONEER LOGO]
- --------------------------------------------------------------------------------
Upon Employee's separation from employment with the Company, Employee agrees to
return and deliver to the Company all notes, notebooks, drawings, blueprints,
customer and sales information, and all other Confidential Information, together
with copies, compilations, and summaries of same, which are in his/her
possession or under his/her control.

5. NONCOMPETITION. For purposes of this Agreement, "Noncompetition Period" shall
refer to the 2-year period commencing on the effective date of termination of
Employee's employment with the Company for any reason.

(a) VOLUNTARY TERMINATION AND TERMINATION FOR CAUSE. Employee agrees that, in
the event that he/she: (1) voluntarily resigns from employment with the Company;
or (2) is terminated for cause from employment with the Company, he/she will
not, without the prior written consent of the Company, either directly or
indirectly, in the geographical area in which the Company maintains offices,
sales agents, or otherwise conducts business, be employed by, own, manage,
operate or control, or participate, directly or indirectly, in the ownership,
management, operation, or control of, or be connected with (whether as a
director, officer, employee, partner, consultant, or otherwise), any business
which competes with the Company in the distribution of electronic parts,
components or systems (the "Noncompetition Obligation").

(b) TERMINATION WITHOUT CAUSE. In the event that Employees's employment is
terminated without cause, the Company shall have the option to pay to Employee
his regular base and target incentive salary consistent with regular payroll
practices (the "Noncompetition Payments") for all or any part of the
Noncompetition Period. If the Company elects to make Noncompetition Payments to
Employee, then Employee will be bound by the Noncompetition Obligation set forth
in Subparagraph A, above, for the duration of Noncompetition Payments. All
decision as to: (1) whether to make Noncompetition Payments to Employee; and (2)
the duration of the Noncompetition Payments, shall be within the sole discretion
of the Company, and will be communicated to Employee at the time of termination.
It is acknowledged and understood that any Noncompetition Payments made
hereunder are in addition to, and independent of, any Severance Payments under
Paragraph 3, above and constitutes adequate consideration for the Noncompetition
objectives set forth herein. It is further acknowledged and understood that any
Noncompetition Obligation arising under this Subparagraph shall be in addition
to any other obligations on the part of Employee under this Agreement, including
but not limited to, his/her nondisclosure and nonsolicitation obligations.

6. NONSOLICITATION/NONINTERFERENCE. Employee further agrees that he/she will not
at any time during the Noncompetition Period, without the prior written consent
of the Company, directly or indirectly solicit or induce, attempt to solicit or
induce, or aid or assist in the solicitation or inducement of any employee,
agent, other representative or associate of the Company, vendor, and/or supplier
to terminate his, her, or its relationship with the Company.

7. ACKNOWLEDGMENT. Employee specifically acknowledges that the covenants set
forth in paragraphs four (4), five (5), and six (6) hereof are reasonable and
necessary in view of the nature of the relationship between Employee and the
Company and Employee's access to the Company's Confidential Information in
regard to his/her employment with the Company. Employee warrants and represents
that, in the event that the restrictions set forth in these paragraphs become
operative, he/she will be able to engage in other activities for the purpose of
earning a livelihood. Employee acknowledges that any breach of any of these
paragraphs will cause the Company immediate irreparable harm and hereby consents
to injunctive relief for any actual or threatened breach. Should the Company
succeed in any regard in enforcing any of the restrictive covenants set forth,
the Employee agrees to pay all expenses and costs, including reasonable
attorneys' fees, incurred by the Company in any enforcement proceeding.

Employee acknowledges that the covenants of paragraphs four (4), five (5), and
six (6) hereof are of the essence of this Agreement. They shall be construed as
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of Employee against the Company, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of any of these covenants.

8. PREEMPTION IN THE EVENT OF CHANGE IN CONTROL. The parties acknowledge that,
concurrent with the execution of this Agreement, they are entering into a Change
of Control Agreement dated February 25, 2000. In the event of a "Change of
Control", and for the duration of the "Change of Control Period", as those terms
are defined in the Change of Control Agreement, the parties agree as follows:

(a) It is the intent of the parties that severance provisions under this
Agreement are superceded by those contained in the Change of Control Agreement.
Accordingly, the Employee acknowledges that he/she shall have no right or
entitlement to severance payments under Paragraph 3 of this Agreement, in the
event of a Change of Control. The exclusive financial obligations of the Company
during the Change of Control Period shall be

<PAGE>   3


NON-COMPETITION AGREEMENT

                                                                  [PIONEER LOGO]
- --------------------------------------------------------------------------------
those set forth in Section 3 of the Change of Control Agreement.

(b) In the event that Employee's employment terminates for any reason during the
Change of Control Period, then Paragraph 5 of this Agreement (Noncompetition)
shall be of no force or effect, and neither the Employee nor the Company shall
have any obligation thereunder.

(c) Except as expressly provided by this Paragraph 8, all other provisions of
this Agreement shall remain binding on the parties during any Change in Control
Period, and shall otherwise be unaffected by a Change in Control.

(d) Upon expiration or termination of any Change in Control Period, Paragraphs 3
and 5 of this Agreement shall be restored in full, and shall be fully binding
upon the parties.

9. REFORMATION OF AGREEMENT; SEVERABILITY. In the event that any of the
paragraph(s) and/or provision(s) of this Agreement shall be found by a court of
competent jurisdiction to be invalid or unenforceable as expressly written, such
court shall reform such paragraph(s) and/or provision(s) to the end that
Employee shall be subject to reasonable obligation(s) under the circumstances
enforceable by the Company.

Should Employee be found to have been in breach of his/her noncompete and/or
nonsolicitation/noninterference obligations, the Court shall extend or revise
the applicable restraint(s) so as to afford the Company the full period of
restraint(s) contemplated by this Agreement.

In the event that any paragraph(s) or provision(s) of this Agreement is found to
be void or unenforceable to any extent for any reason, it is the agreed-upon
intent of the parties hereto that all remaining paragraphs and provisions of
this Agreement shall remain in full force and effect to the maximum extent
permitted and that this Agreement shall be enforceable as if such void or
unenforceable paragraph(s) and/or provision(s) had never been a part hereof.

10. DISCLOSURE OF THIS AGREEMENT. Employee shall deliver a copy of this
Agreement to each person, business, or entity with whom he/she seeks employment,
partnership, or other business association at any time within two (2) years of
separation from employment with the Company.

11. ENTIRE AGREEMENT. This Agreement supersedes and replaces any existing
agreement or understanding between Employee and the Company relating to the
subject matters addressed herein. Employee and the Company recognize and agree
that this is the entire agreement between them concerning the topics expressly
addressed herein. Any modification of this Agreement must be in writing signed
by both parties.

12. ASSIGNMENT. This Agreement shall inure to the benefit of, and shall be
binding as to, the Company, its affiliated and/or related businesses, as well as
to their successors and assigns.

13. GOVERNING LAW. This Agreement shall become effective as of the date set
forth below and shall be governed by, and contained in accordance with, the
internal, substantive laws of the State of Ohio. Employee agrees that the state
and federal courts located in the State of Ohio shall have jurisdiction in any
action, suit or proceeding against Employee based on or arising out of this
Agreement and Employee hereby: (a) submits to the personal jurisdiction of such
courts; (b) consents to service of process in connection with any action, suit
or proceeding against Employee; and (c) waives any other requirement (whether
imposed by statute, rule of court or otherwise) with respect to personal
jurisdiction, venue or service of process.

<PAGE>   4


NON-COMPETITION AGREEMENT

                                                                  [PIONEER LOGO]
- --------------------------------------------------------------------------------

IN WITNESS WHEREOF, Employee, having read and fully understood each of the
foregoing provisions, and the Company have executed this Agreement as of this
25th day of February, 2000.



EMPLOYEE:  TOM PITERA                         ACCEPTED BY PIONEER-STANDARD
         ---------------------------          ELECTRONICS, INC.
               (Print Name)


    /s/ Tom Pitera                            By: /s/ Arthur Rhein
- ------------------------------------             ------------------------------
           (Signature)                           Name


                                              Title:
                                                    ---------------------------





                       *Copy to be retained by Employee*
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.R
<SEQUENCE>6
<FILENAME>ex10-r.txt
<DESCRIPTION>EXHIBIT 10(R)
<TEXT>

<PAGE>   1
                                                                   Exhibit 10(r)

                                                                  [PIONEER LOGO]

                          CHANGE OF CONTROL AGREEMENT
                          ---------------------------


         THIS CHANGE OF CONTROL AGREEMENT by and between Pioneer-Standard
Electronics, Inc., an Ohio Corporation (the "Company"), and Thomas G. Pitera
(the "Employee"), is dated as of the 25th day of February, 2000.


                                  WITNESSETH:
                                  -----------

         WHEREAS, the Board of Directors of the Company (the "Board"), has
determined that it is in the best interests of the Company and its shareholders
to assure that the Company will have the continued dedication of the Employee,
notwithstanding the possibility, threat, or occurrence of a Change of Control
(as defined below) of the Company; and

         WHEREAS, the Board believes it is imperative to diminish the inevitable
distraction of the Employee by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control, to encourage the
Employee's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Employee with compensation arrangements upon a Change of Control which provide
the Employee with individual financial security and which are competitive with
those of other corporations;

         NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:

Section 1. EFFECTIVE DATE AND CHANGE OF CONTROL.

         1.1   (a)  EFFECTIVE DATE. This Agreement shall become effective only
upon the "Effective Date," which shall be the first date during the "Change of
Control Period" (as defined in Section 1.1(b)) on which a Change of Control (as
defined in Section 1.2) occurs. Until such time, the Employee shall have no
rights against the Company and the Company shall not have any obligations to the
Employee under or by virtue of this Agreement. Anything in this Agreement to the
contrary notwithstanding, if the Employee's employment with the Company is
terminated prior to the date on which a Change of Control occurs, and it is
reasonably demonstrated that such termination (1) was at the request of a third
party who has taken steps reasonably calculated to effect a Change of Control or
(2) otherwise arose in Connection with or anticipation of a Change of Control,
then for all purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination.

         (b) The "Change of Control Period" is the period commencing on the date
hereof and ending on the first anniversary of such date; provided, however, that
commencing on the date one (1) year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof is
hereinafter referred to as the "Renewal Date"), the Change of Control Period
shall be automatically extended so as to terminate one (1) year from such
Renewal Date, unless the Company shall give written notice to the Employee at
least sixty (60) days prior to the Renewal Date that the Change of Control
Period shall not be so extended and that this Agreement shall terminate upon the
Renewal Date; provided, however, that such notice may not be given at any time
during the nine (9) month period following the Effective Date.



Prepared February 25, 2000

<PAGE>   2




         1.2 CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of
Control" shall mean:

                 (a) The acquisition by any person, entity or "group," within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934 (the "Exchange Act") (excluding, for this purpose, the Company or its
Subsidiaries, The Pioneer Stock Benefit Trust, or any employee benefit plan of
the Company or its Subsidiaries which acquires beneficial ownership of voting
securities of the Company), of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either the then
outstanding Common Shares or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the election of
directors; or

                (b) Individuals who, as of the date hereof, constitute the Board
(as of the date hereof the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, 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 whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Company, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; or

                (c) Approval by the shareholders of the Company of a
reorganization, merger, consolidation, in each case, with respect to which
persons who were the shareholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than 80% of the combined voting power entitled to vote generally in the election
of directors of the reorganized, merged or consolidated company's then
outstanding voting securities, or a liquidation or dissolution of the Company or
of the sale of all or substantially all of the assets of the Company.

Section 2. TERMINATION OF EMPLOYMENT.

         2.1 TERMINATION BY THE COMPANY.

         (a) COMPANY'S RIGHT TO TERMINATE. Subject to (i) the Company's
obligations under Section 3.1 hereof subsequent to the Effective Date, or (ii)
under any written employment agreement between the Company and the Employee, the
Employee's employment with the Company may be terminated at any time without
Cause.

         (b) CAUSE. The Company may terminate the Employee's employment for
"Cause." For purposes of this Agreement, "Cause" means (i) an act or acts of
personal dishonesty taken by the Employee and intended to result in personal
enrichment of the Employee at the expense of the Company or (ii) the conviction
of the Employee of a felony.

         2.2 TERMINATION BY THE EMPLOYEE.

         The Employee's employment with the Company (i) shall automatically
terminate upon death and (ii) may be voluntarily terminated by the Employee at
any time for any reason, in the Employee's sole discretion.



Prepared February 25, 2000

<PAGE>   3


         2.3 TRANSFERS. Transfer of the Employee among the Company and
affiliated entities at least 80% directly or indirectly owned by the Company
("Subsidiaries") shall not be deemed to be a termination of employment.

         2.4 NOTICE OF TERMINATION.

         Any termination by the Company or by the Employee shall be communicated
by Notice of Termination to the other party hereto given in accordance with
Section 8(d) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) in the case of a termination for
Cause, sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee's employment under the provision
so indicated, and (iii) if the date of termination is other than the date of
receipt of such notice, specifies the date of termination (which date shall be
not more than fifteen (15) days after the giving of such notice).

Section 3. OBLIGATIONS OF THE COMPANY UPON TERMINATION.

         3.1 WITHOUT CAUSE OR VOLUNTARY TERMINATION. If, at any time
prior to the date that is twelve (12) months subsequent to the Effective Date,
the Employee's employment with the Company shall be terminated either (i) by the
Company without Cause, or (ii) by the Employee voluntarily for any reason:

                 (a) the Company shall pay to the Employee within thirty (30)
days of the date of termination a lump sum amount equal to twenty-four (24)
times the greater of the Employee's (i) highest monthly base salary paid or
payable by the Company during the twelve (12) month period immediately preceding
the Effective Date, or (ii) the highest monthly salary paid or payable by the
Company at any time from the ninety (90) day period preceding the Effective Date
through the date of termination (the "Highest Base Salary"); and

                 (b) the Company shall pay to the Employee within thirty (30)
days of the date of termination a lump sum amount equal to the greater of (i)
four (4) times the highest aggregate amount of incentive compensation paid or
payable by the Company to the Employee during any six (6) consecutive months of
the twelve (12) month period immediately preceding the Effective Date under any
and all incentive compensation plan(s) of the Company in effect at such time; or
(ii) four (4) times the highest aggregate amount of incentive compensation paid
or payable by the Company to the Employee during any six (6) consecutive months
of the twelve (12) month period preceding the date of termination under any and
all incentive compensation plan(s) of the Company in effect at such time; and

                (c) the Company shall pay to the Employee within thirty (30)
days of the date of termination a lump sum amount equal to twenty-four (24)
times the monthly amount paid or payable to Employee by the Company as an auto
allowance as in effect immediately preceding the Effective Date; and

                (d) a cash payment equal to the amount of excise taxes (i.e.,
the "excise tax gross-up payment") which the Employee would be required to pay
pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended
("Code"), as a result of any payments made by or on behalf of the Company or any
successor thereto resulting in an "excess parachute payment" within the meaning
of Section 280G(b) of the Code. In addition to the foregoing, the cash payment
due to the Employee under this section 3.1(d) shall be increased by the
aggregate of the amount of federal, state and local income and excise taxes for
which the Employee will be liable on account of the cash payment to be made
under this section 3.1(d), such that the Employee will receive the excise tax
gross-up payment net of all income and excise taxes imposed on the Employee on
account of the receipt of the excise tax gross-up payment. The computation of
this payment shall be determined, at the expense of the Company, by an
independent accounting, actuarial or consulting firm selected by the Company.
Payment of the cash amount set forth



Prepared February 25, 2000

<PAGE>   4


above shall be made at such time as the Company shall determine, in its sole
discretion, but in no event later than the date five (5) business days before
the due date, without regard to any extension, for filing the Employee's federal
income tax return for the calendar year which includes the date as of which the
aforementioned "excess parachute payments" are determined. Notwithstanding the
foregoing, there shall be no duplication of payments by the Company under this
section 3.1(d) in respect of excise taxes under Section 4999 of the Code to the
extent the Company is making cash payments in respect of such excise taxes for
any other arrangement with the Employee. In the event that the Employee is
ultimately assessed with excise taxes under Section 4999 of the Code as a result
of payments made by the Company or any successor thereto which exceed the amount
of excise taxes used in computing the Employee's payment under this section
3.1(d), the Company or its successor shall indemnify the Employee for such
additional excise taxes plus any additional taxes, income taxes, interest and
penalties resulting from the additional excise taxes and the indemnity
hereunder; and

                (e) for the twenty-four (24) month period following the date of
termination (the "Benefits Continuation Period"), the Company shall continue to
provide health insurance and retirement benefits to the Employee and/or the
Employee's family at least equal to those which would have been provided to them
if the Employee's employment had not been terminated, in accordance with the
most favorable plans, practices, programs or policies of the Company and its
Subsidiaries during the ninety (90) day period immediately preceding the
Effective Date or, if more favorable to the Employee, as in effect at any time
thereafter with respect to other key employees and their families, and for
purposes of eligibility for retirement benefits pursuant to such plans,
practices, programs and policies, the Employee shall be considered to have
remained employed until the end of the Benefits Continuation Period and to have
retired on the last day of such period. Notwithstanding the foregoing, the
Employee shall have no right to participate in any incentive compensation plan
of the Company subsequent to the date of termination; and

                 (f) if it would be illegal to provide the benefits under such
plans, practices, programs or policies referred to in Section 3.1(d) above due
to, among other things, nondiscrimination rules or tax qualification rules
applicable to such plans, practices, programs or policies, then the Company will
be deemed to be in compliance with this Agreement if it provides such Employee
with a comparable substitute therefor, provided the Employee and the Employee's
dependents are placed thereby in the same or a better economic position than if
the Company provided such benefits through its then existing plans, practices,
programs or policies.

         3.2 CAUSE. If the Employee's employment shall be terminated for Cause,
this Agreement shall terminate without further obligations of the Company to the
Employee hereunder.

         3.3 DEATH. If the Employee's employment is terminated by reason
of the Employee's death, this Agreement shall terminate without further
obligations of the Company to the Employee other than those obligations accrued
or earned and vested (if applicable) by the Employee as of the date of death.

Section 4. DISPUTES.

         It is the intent of the parties hereto that the following dispute
resolution procedure shall apply hereunder.

         (a) No payments or benefits need be paid hereunder except upon the
Notice of Termination provided for in Section 2.4 hereof or, if the Company does
not give such a Notice, upon a written application of the Employee or other
person claiming thereunder to the person specified in Section 8(d) hereof,
provided such claim may be made in general terms only specifying the basis for
the claim, and that it is made under this Agreement, without enumerating each
benefit claimed.

         (b) The Company must accept or reject the claim within thirty (30)
days.



Prepared February 25, 2000

<PAGE>   5


         (c) If the Company rejects the claim, it must do so in writing
specifying the reasons therefor.

         (d) If the claimant disagrees with the Company's decision, or if the
Company fails to respond within such thirty (30) day period, appeal shall be to
a court of Competent jurisdiction. Such appeal shall be on a fully de novo basis
and the decision of the Company denying benefits shall not be entitled to any
deference by such court.

Section 5. EXCLUSIVITY OF RIGHTS.

         It is expressly understood and acknowledged by Employee that the
Company's obligations under Section 3 of this Agreement shall be in lieu of any
obligation on the part of the Company for payment of severance, salary,
incentive compensation, auto allowance, health and retirement benefits
(collectively, the "Severance Benefits") under any other Company plan, policy or
agreement (including but not limited to, the Non-Competition Agreement between
Company and Employee, and the Company's severance policy) in the event of
termination of Employee's employment with the Company during the Change in
Control Period. Accordingly, the Employee acknowledges that he/she shall not be
entitled to Severance Benefits other than those set forth in Section 3, and
understands that his/her exclusive entitlement to Severance Benefits during the
Change in Control Period shall be as set forth in Section 3.

         Except as provided in the foregoing paragraph of Section 5 hereof, and
subject thereto: (1) Nothing in this Agreement shall prevent or limit the
Employee's continuing or future participation in any benefit, bonus, incentive
or other plans, programs, policies or practices provided by the Company or any
of its Subsidiaries and for which the Employee may qualify, nor shall anything
herein limit or otherwise affect such rights as the Employee may have under any
stock option agreements with the Company or any of its Subsidiaries; (2) Amounts
which are vested benefits under any plan, policy, practice or program of the
Company or any of its Subsidiaries at or subsequent to the date of termination
shall be payable in accordance with such plan, policy, practice or program; and
(3) Employee shall be entitled to participate in any other plan, practice,
program or policy of either the Company or any successor to the Company referred
to in Section 7 hereof under which the Employee is entitled to participate by
law or by reason of being vested under such plan, practice, program or policy.

Section 6. FULL SETTLEMENT.

         Except as provided in this Section 6, the Company's obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against the Employee. In no event shall the Employee be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Employee under any of the provisions of this Agreement, nor shall any
amounts actually paid to the Employee by any person for services rendered prior
or subsequent to the date of termination reduce the Company's payment
obligations under Section 3.1 hereof. The Company agrees to pay, to the full
extent permitted by law, all legal fees and expenses which the Employee may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company or others of the validity or enforceability of, or liability
under, any provision of this Agreement, plus in each case interest at the
applicable Federal rate provided for in Section 7872(f)(2) of the Code.

Section 7. SUCCESSORS.

         (a) This Agreement is personal to the Employee and without the prior
written consent of the Company shall not be assignable by the Employee. This
Agreement shall inure to the benefit of and be enforceable by the Employee's
legal representatives.



Prepared February 25, 2000

<PAGE>   6


         (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

         (c) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes this Agreement by operation of law, or otherwise.

Section 8. MISCELLANEOUS.

         (a) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without reference to principles
of conflict of laws.

         (b) CAPTIONS. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.

         (c) AMENDMENTS. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors or legal representatives.

         (d) NOTICES. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

        If to the Employee:

                        Thomas G. Pitera
                        30 Pine Crest Dr.
                        Chagrin Falls, OH 44022

        If to the Company:

                        Pioneer-Standard Electronics, Inc.
                        4800 East 131st Street
                        Cleveland, OH 44105

                        Attention:  Chief Executive Officer

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

         (e) SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.

         (f) TAX WITHHOLDING. The Company may withhold from any amounts payable
under this Agreement such Federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.

         (g) NON-WAIVER. The Employee's failure to insist upon strict compliance
with any provision hereof shall not be deemed to be a waiver of such provision
or any other provision thereof.



Prepared February 25, 2000

<PAGE>   7


         (h) ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the Company and the Employee with respect to the subject matter hereof.

         (i) EMPLOYEE AN "AT WILL" EMPLOYEE. The Employee and the Company
acknowledge that the employment of the Employee by the Company is "at will,"
and, prior to the Effective Date, may be terminated by either the Employee or
the Company at any time with or without Cause without any obligation under or by
virtue of this Agreement. Upon a termination of the Employee's employment prior
to the Effective Date, there shall be no further rights under this Agreement.

         IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
day and year first above written.



                                        /s/ Thomas G. Pitera
                                        --------------------------------------
                                        Employee Name


                                        PIONEER-STANDARD ELECTRONICS, INC.



                                        By: /s/ Arthur Rhein
                                           -----------------------------------
                                           Arthur Rhein
                                           President & COO





Prepared February 25, 2000
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>7
<FILENAME>ex13.txt
<DESCRIPTION>EXHIBIT 13
<TEXT>

<PAGE>   1
                                                                      Exhibit 13

                                                         [LOGO-PIONEER STANDARD]


                                                                              TM

            SETTING THE  standard
                      FOR TECHNOLOGY DISTRIBUTION

2000   ANNUAL REPORT


<PAGE>   2


SETTING THE STANDARD FOR TECHNOLOGY DISTRIBUTION

Pioneer-Standard Electronics, Inc. excels at working with suppliers to introduce
their technology to target markets. The Company works with customers to
incorporate that technology into their products and businesses, and offers
value-added services to help them go to market faster, and improve their
efficiency and profit opportunities. This strategy enables Pioneer-Standard to
"set the standard for technology distribution."

COMPANY PROFILE

Pioneer-Standard is one of the world's largest distributors of electronic
components and mid-range computer systems, with annual revenues of $2.6
billion. Company highlights include:

- -        Pioneer-Standard is the technology distribution leader, creating demand
         for suppliers' products and deploying the latest business tools to
         provide customers with world-class service.

- -        The Company is a strategic link in the technology industry's supply
         chain by capitalizing on its core competencies in supply chain
         management, eBusiness, logistics, computer systems integration and
         other value-added services.

- -        The Company is closely aligned with the fast-growing Internet and
         communications markets and other applications for which electronic
         components and mid-range computer systems are in high demand.

- -        The Company has a 25 percent compounded annual growth rate over the
         last five years, and has an exemplary record of delivering growth and
         increasing market share.

- -        Pioneer-Standard has a large and growing presence throughout North
         America, and serves international customers through its equity partners
         based in Europe and Asia.

For more information, visit the Company's web site at www.pioneerstandard.com

                                    Contents
                              Financial Highlights                    1
                              To Our Fellow Shareholders              2
                              About the Company                       5
                              Industrial Electronics Division         6
                              Computer Systems Division              10
                              Building Global Momentum               14
                              Financial Review                       15
                              Corporate Directory                    35
                              Shareholder Information                36


<PAGE>   3
                            WWW.PIONEERSTANDARD.COM


FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Fiscal years ended March 31                 2000            1999            1998
- ------------------------------------------------------------------------------------
In thousands, except per share data
<S>                                      <C>             <C>             <C>
Net sales                                $2,550,685      $2,259,083      $1,685,265
Operating profit                            101,454          84,921          72,950
Income before income taxes                   77,225          60,668          52,233
Income taxes                                 31,210          24,018          21,624
Net income                               $   40,145      $   30,809      $   30,497
- ------------------------------------------------------------------------------------
Per share data
    Basic                                $     1.52      $     1.17      $     1.16
    Diluted                                    1.27            1.03            1.14
    Dividends                                   .12             .12             .12
    Shareholders' equity                      12.20           10.30            9.30
Weighted average shares outstanding
    Basic                                    26,409          26,351          26,205
    Diluted                                  36,178          35,711          26,949
- ------------------------------------------------------------------------------------
</TABLE>






         NET SALES
   (billions of dollars)


96       97      98     99      00

1.1     1.5     1.7    2.3     2.6



        NET INCOME
   (millions of dollars)


96      97      98      99       00

25.3  23.3    30.5    30.8    40.1




     DILUTED EARNINGS
        PER SHARE
        (dollars)

96      97       98     99      00
1.09   1.00    1.14   1.03    1.27




                                       1
<PAGE>   4

                      SETTING THE STANDARD FOR TECHNOLOGY

TO OUR FELLOW SHAREHOLDERS

Fiscal 2000 was a year of outstanding financial results and strategic successes
for Pioneer-Standard. We posted record results in revenues, earnings and
earnings per share in each of the four quarters and for the full year. At the
same time, we increased market share, expanded our eBusiness and supply chain
management capabilities, reached out to many new customers, and enhanced our
global reach. We are well-positioned for growth and expansion in fiscal 2001 and
beyond.

    For the full year, we achieved record sales of $2.6 billion, a 13 percent
increase from fiscal 1999; record earnings of $40.1 million, a 30 percent
increase; and a record $1.27 in diluted earnings per share, which represents a
23 percent increase. Both business segments -- Industrial Electronics and
Computer Systems -- made major contributions to our revenue and earnings growth
during the year. We take pride in our well-balanced business, with each segment
posting more than $1.2 billion in annual sales. Both segments continue to
benefit from their close alignment with the fast-growing Internet and
communications markets.

    After three-plus years of semiconductor overcapacity, the electronic
components market has become particularly strong. In fiscal 2000, our
semiconductor sales were up more than 20 percent over the previous year, with
demand accelerating faster during the second half of the year.

STANDING OUT FROM THE CROWD

More than anything else, fiscal 2000 was a strong validation of our
differentiated business strategy as a demand-creating technology distributor. We
are "setting the standard for technology distribution" through our ongoing
commitment to support our suppliers, provide customers with the best
technology solutions, and improve our own productivity.

    This strategy served us very well in fiscal 2000 and is central to our
ongoing commitment to deliver growth and expansion.

KEYS TO SUCCESS IN 2000

While fiscal 2000 was an excellent year for us in many regards, it wasn't
without some challenges. As we moved into fiscal 2000, the semiconductor market
was struggling due to overcapacity, which was adversely affecting margins. Y2K
also loomed and was projected to have an effect on the computer systems
business. Nonetheless, we managed the business well and were successful
throughout the year.

    The implementation of our eBusiness strategy was one of our most significant
successes. During the year, we tapped the power of the Internet and made major
strides to

       [PHOTO]                                            [PHOTO]


ARTHUR RHEIN                                         JAMES L. BAYMAN
President and                                        Chairman and
Chief Operating Officer                              Chief Executive Officer
<PAGE>   5
                            WWW.PIONEERSTANDARD.COM

More than anything else, fiscal 2000 was a strong validation of our
differentiated business strategy as a demand-creating technology distributor.

                                    [PHOTO]

build the best eBusiness and interactive marketing tools in the industry. Our
dedicated extranets and online customer service tools enable suppliers and
customers to independently access our services and information, which makes us
more effective and efficient in meeting their needs.

    In November 1999, PC Week magazine recognized us as having the third-best
B2B eBusiness program in all of North America -- positioning us alongside some
of the nation's most respected companies and way ahead of everyone else in our
industry. Since then, we have been upgrading our online services to offer our
customers a higher level of personalization, with services specifically
designed for each of our customer groups. We have also enhanced the investor
relations portion of our web site at www.pioneerstandard.com to include
webcasting of our quarterly conference calls and same-day posting of the con-
ference call script.

    Customer satisfaction is a corporate-wide priority. We track it regularly,
publish the results internally, and share best practices. Based on these
statistics, customer satisfaction reached an all-time high in fiscal 2000 and
we expect continuous improvement in subsequent years.

BUILDING FOR THE FUTURE

During 2000, we took a number of strategic steps that position us well for 2001:

- -        Expanded our supply chain management capabilities by entering into an
         exclusive marketing agreement with Supplystream, Inc. With
         Supplystream's supply chain management software tools, we can help
         customers analyze and reduce their total acquisition costs, and
         quantify the benefits of our value-added services.

- -        Added suppliers such as Level One Communications, T.sqware and ZiLOG to
         our Industrial Electronics line card. These suppliers specifically
         chose us because of our expertise in demand creation, eBusiness and
         supply chain management, and our alignment with the high-growth
         Internet and communications markets.

- -        Realigned our Computer Systems sales management team to focus on two
         distinct customer groups: resellers and corporate end users. As a
         result, our KeyLink Systems unit and our Enterprise Sales Group are
         able to provide an enhanced level of support and customer service.

- -        Enhanced our global reach, including increasing our investments in
         World Peace Industrial Co. Ltd. of Taiwan, and Eurodis Electron PLC of
         the U.K.


                                       3
<PAGE>   6
                SETTING THE STANDARD FOR TECHNOLOGY DISTRIBUTION

We enter fiscal 2001 with some of the best eBusiness, supply chain management
and customer service tools in the industry, and we intend to continue investing
in them and deploying them rapidly.

    Early in fiscal 2001, the Company made a strategic equity investment in
Germany-based Magirus AG, a leading European distributor of mid-range computer
systems. The partnership between Pioneer-Standard and Magirus creates one of the
largest Compaq enterprise and IBM mid-range value-added computer distributors
worldwide.

    As a result of all of these activities, we were able to grow our top line
and improve our bottom line. In addition, we exceeded our goal of generating $1
million in revenue per employee for the first time in our history.

BUSINESS OUTLOOK

As we move into fiscal 2001, we are expecting another strong year in both of our
business segments.

    The electronic components market continues to enjoy record demand, spurred
by the proliferation of Internet and communications applications. By creating
new demand for our suppliers and enhancing our relationships with customers, we
are on the leading edge in capitalizing on these growth markets.

    The mid-range computer systems market is also doing well, and continues to
benefit from explosive growth in the Internet and Web-related applications. We
expect increasing demand for information storage products from Web hosting
companies, e-commerce providers and e-businesses to be a significant growth
driver throughout the year. We are also benefiting from strong demand for new
server technology from our established legacy systems customers.

    We enter fiscal 2001 with some of the best eBusiness, supply chain
management and customer service tools in the industry, and we intend to continue
investing in them and deploying them rapidly. We also have the best people in
the industry, and they are doing an excellent job.

    All of us at Pioneer-Standard are committed to continuously increasing
shareholder value. We are pleased with our accomplishments in fiscal 2000 and
look forward to sharing many future successes with you. Thank you for your
continued support.

/s/ James L. Bayman                       /s/ Arthur Rhein

JAMES L. BAYMAN                           ARTHUR RHEIN
Chairman and Chief Executive Officer      President and Chief Operating Officer

[PHOTO]




                                       4
<PAGE>   7
                            WWW.PIONEERSTANDARD.COM

ABOUT THE COMPANY

ELECTRONIC COMPONENTS AND COMPUTER SYSTEMS DISTRIBUTION IS A DYNAMIC,
FAST-GROWING BUSINESS, DRIVEN BY THE INTERNET AND COMMUNICATIONS MARKETS. AS THE
PACE OF INNOVATION CONTINUES TO ACCELERATE AND BUSINESSES DEMAND EFFICIENT
SUPPLY CHAINS, TECHNOLOGY DISTRIBUTORS HAVE BECOME THE STRATEGIC LINK BETWEEN
SUPPLIERS AND CUSTOMERS.

Pioneer-Standard Electronics, Inc. is the leader in technology distribution.
Pioneer-Standard's focused business strategy demands exceptional implementation
of the "Three I's": Introduce, Incorporate and Improve, which commits the
Company to:

- -        INTRODUCE suppliers' technology to target markets.

- -        INCORPORATE that technology into customers' products and businesses.

- -        IMPROVE customers' profit opportunities.

    The Company has specific expertise in deploying leading-edge eBusiness
tools, supply chain management services, logistics expertise and technical
solutions to help suppliers and customers reduce their time to market and total
acquisition costs, while improving Pioneer-Standard's own efficiency. Fiscal
2000 was especially notable in the eBusiness area, as PC Week magazine
recognized Pioneer-Standard as having the third-best eBusiness program in North
America. Later in the year, the Company introduced mypioneer.com to further
personalize its eBusiness programs for customers.

Pioneer-Standard has two business segments:

- -   The INDUSTRIAL ELECTRONICS DIVISION provides a comprehensive offering of
    semiconductors, power products, and interconnect, passive and
    electromechanical components.

- -   The COMPUTER SYSTEMS DIVISION is a leading distributor of mid-range computer
    systems, information storage products and software from companies such as
    Compaq, IBM, Intel and Oracle.

    Both divisions benefit from their close alignment with the high-growth
Internet and communications markets, which are driving demand for the products
that Pioneer-Standard distributes to record levels.

    Pioneer-Standard continues to expand its global reach through strategic
investments in three overseas companies: World Peace Industrial Co. Ltd. of
Taiwan; Eurodis Electron PLC of the U.K.; and Magirus AG of Germany. These
equity partners enable Pioneer-Standard to support its customers and suppliers
globally, while continuing to grow and meet the needs of its North American
constituents.

[3 PHOTOS]
<PAGE>   8
                SETTING THE STANDARD FOR TECHNOLOGY DISTRIBUTION

INDUSTRIAL ELECTRONICS DIVISION

Driven by rapid growth in the Internet and communications markets, worldwide
demand for electronic components is at record levels. The Industrial Electronics
Division is using its expertise in demand creation, supply chain management,
value-added services and eBusiness to capitalize on these extraordinary growth
opportunities.

Explosive Growth

Pioneer-Standard's Industrial Electronics Division provides a comprehensive
offering of semiconductors, power products, and interconnect, passive and
electromechanical (IPE) components -- more than 386,000 products from 100
leading manufacturers. Fiscal 2000 was the best revenue-producing year ever for
the Industrial Electronics Division, spurred by its strong semiconductor and IPE
sales, which grew more than 20 percent over the previous year.

    The electronic components market is expanding rapidly due to the increasing
pervasiveness of electronics -- for Internet and communications applications,
industrial controls, and automotive electronics. The Industrial Electronics
Division is closely aligned with high-growth markets such as computers and
communications and serves them with dedicated sales, technical support and
marketing communications teams. In addition, the division's Electronic
Manufacturing Services organization features a dedicated sales team to meet the
specific needs of contract manufacturers, the fastest-growing customer segment.

DEMAND CREATION

The Industrial Electronics Division excels at creating demand for suppliers'
technology, helping customers incorporate that technology into their products,
and driving volume sales for suppliers and the division. As a result of this
engineering-based strategy, the division is increasing market share with all of
its major suppliers.

    During the fiscal year, the Industrial Electronics Division added several
key suppliers to its line card. These suppliers specifically chose
Pioneer-Standard because of the Industrial Electronics Division's expertise in
demand creation, eBusiness and supply chain management:

- -   Level One Communications, an Intel company that provides connectivity
    solutions for high-speed telecommunications and networking applications.


[PHOTO]

Supplystream puts the tools of professional supply chain management at
everyone's fingertips to streamline the purchasing process and reduce total
acquisition costs for customers.

                                       6
<PAGE>   9
                            WWW.PIONEERSTANDARD.COM

          Value-added      98                       25%
          services as
          a percentage     99                       33%
          of division
          sales >          00                       42%

                           01                       50%

                         (est.)

- -   ZiLOG, which offers advanced embedded semiconductors for use in Internet,
    networking and "smart" home appliance applications.

- -   T.sqware, which manufactures high-end microprocessors for computers and
    communications equipment.

SUPPLY CHAIN MANAGEMENT

The Industrial Electronics Division continues to expand its leadership in supply
chain management, positioning itself as the strategic link between suppliers and
customers.

    In fiscal 2000, the division and its global partners -- World Peace
Industrial Co. Ltd. in Asia and Eurodis Electron PLC in Europe -- enhanced their
supply chain management collaboration and worked with multi-geography customers
to reduce their total acquisition costs.

    Also during the fiscal year, the division became the exclusive marketing
partner for Supplystream's software. Supplystream is the leader in developing
tools for professional supply chain management, which can be used to measure
internal transaction costs, optimize asset utilization, and analyze the
materials management process based on total cost of acquisition versus
piece-part pricing. The division is marketing the software to help customers
determine the optimal combination of value-added services that will reduce their
time-to-manufacture and time-to-market.

VALUE-ADDED SERVICES

As customers and suppliers continue to outsource their non-core competencies,
the Industrial Electronics Division is seizing an opportunity to offer an
increasing variety of value-added services, ranging from inventory management,
logistics services and power solutions to device programming and component
kitting and assembly. With expertise in targeted high-growth markets, the
division's technical engineering staff specializes in delivering unique customer
solutions. During fiscal 2000, the division upgraded and expanded its
value-added services centers to meet the growing needs of customers throughout
North America.

[PHOTO]

Top left: Computer chips on a silicon wafer.  Bottom left: Users of
mypioneer.com have online access to personalized tools and infor-
mation for online purchasing and order tracking.  Above: Electronics
are an integral part of people's everyday lives.



                                       7
<PAGE>   10
                SETTING THE STANDARD FOR TECHNOLOGY DISTRIBUTION

Award-winning Web programs enable customers to go online to Learn, Find, Buy and
receive after-sale Support.

    The value-added services expertise and investments have established the
Industrial Electronics Division as a supply chain management and technology
distribution leader. The initiatives have also been financially beneficial, as
42 percent of the division's fiscal 2000 revenues included value-added services,
compared with 25 percent just two years earlier. The goal for fiscal 2001 is to
reach 50 percent.

eBusiness

The Industrial Electronics Division embraces the Internet as an information-rich
solutions provider that is helping customers and suppliers be more effective and
the Company more efficient in meeting their needs. Award-winning Web programs
enable customers to go online to Learn, Find, Buy and receive after-sale
Support. Through mypioneer.com, the division has more than 1,000 dedicated
extranets, which include customer-specific information such as contract pricing,
bonded and available inventories, shipping details, access to order histories,
and online technical support.

    In November 1999, PC Week magazine recognized Pioneer-Standard as having one
of the best eBusiness programs in all of North America, due in part to the
Company's extranets and programs for online collaboration with customers and
suppliers. Since then, the division has introduced additional personalization
and customization features to provide customers fast, easy access to the most
relevant information for their particular situation.

OUTLOOK

The Industrial Electronics Division expects fiscal 2001 to be another strong
year, especially as the communications market and contract manufacturers
continue to drive demand for semiconductors and other electronic components. The
division expects its continued focus on demand creation, supply chain
management, value-added services and eBusiness will provide significant
opportunities for growth and expansion throughout the year. The technology
distribution market is dynamic and strong, and the Industrial Electronics
Division is capitalizing on those market conditions.

[PHOTO]


Top: Contract manufacturers represent the electronic
components industry's fastest-growing customer
segment.  Bottom: The robust industrial controls mar-
ket is also helping to drive component demand to
record levels.


                                       8
<PAGE>   11
                            WWW.PIONEERSTANDARD.COM

                 eBUSINESS FAQS: INDUSTRIAL ELECTRONICS DIVISION

- -   HOW IS THE INDUSTRIAL ELECTRONICS DIVISION INTEGRATING eBUSINESS INTO ITS
    BUSINESS?

We see the Internet as an essential tool for success today and it is a growing
part of our business. In 1998, we began building the infrastructure necessary to
provide broad online support to our customers and suppliers. We developed our
strategy around the principles of Learn, Find, Buy and Support. Today,
leading-edge capabilities are in place throughout our Web-based programs, and we
are continuously innovating and improving.

   Our strategy is to use the Web as the ultimate customer service and supply
chain management tool. We want customers and suppliers to be able to
independently access our information and services anytime, anywhere, which makes
them more effective and us more efficient in meeting their needs.

- -   HOW IS THE DIVISION USING mypioneer.com TO SERVE CUSTOMERS?

Under the banner of mypioneer.com, we are providing an increased level of
personalized service for engineers and purchasers. This service enables
customers to personalize their page views to buy online at their negotiated
contract pricing, view bonded and available inventories, place buys for future
dates, manage custom part numbers, conduct multiple-part searches, sign up for
automated shipping notification, utilize sophisticated order tracking tools,
and access order history. The division's dedicated customer extranets have been
recognized by PC Week and Electronic Engineering Times as among the most
innovative in all of North America. For an exclusive online tour of the features
available at mypioneer.com, visit the Web site at mypioneer.com/eLeader.

- -   WHAT ADDITIONAL ONLINE FEATURES WILL YOU BE INTRODUCING?

Our Web strategies and tactics are consistently updated based on input from our
suppliers and customers, who are asking for advanced work flow management tools.
We continue to expand the personalization features to reduce the number of
clicks for customers to get the information they want.

   One-to-one permission marketing is becoming an important part of our Web
strategy. For example, we are introducing a "push" education service called
Product Spotlight to keep engineers abreast of the latest technology releases
and product life cycle information. Engineers will choose which technologies
they wish to receive updates about via email.

- -  TO WHAT EXTENT DO YOU PARTICIPATE IN INDUSTRY PORTALS?

Pioneer-Standard is an equity partner in ChipCenter, a premier portal Web site
widely visited by the engineering community. ChipCenter provides us instant
access to a technical customer base, which we channel directly to our elec-
tronic catalog for online purchasing.

- -   WHAT ARE THE RESULTS OF THE eBUSINESS PROGRAMS?

Demand for our dedicated customer extranets increased significantly throughout
fiscal 2000, with more than 1,000 such sites currently online. eBusiness is a
major reason the Company exceeded its goal of $1 million in sales per employee
for fiscal 2000 -- an accomplishment that positions us ahead of the industry.
The Pioneer-Standard Web site receives more than 10,000 user sessions per day
and more than 250,000 catalog part searches per month. Eighty percent of our
site visitors are engineers, and these statistics are growing at a rate of 10
to 15 percent per month, with additional acceleration expected as new services
are introduced.


                                       9
<PAGE>   12
                SETTING THE STANDARD FOR TECHNOLOGY DISTRIBUTION


COMPUTER SYSTEMS DIVISION

With Internet applications continuing to proliferate, the mid-range computer
systems market is the fastest-growing sector of the computer industry.
Pioneer-Standard's Computer Systems Division provides customers with the
technology, products, services and support to fuel the information-intensive
New Economy.

Market Focus

Pioneer-Standard's Computer Systems Division is one of the world's largest
distributors of computer products and software from companies such as Compaq,
IBM, Intel and Oracle. The division is very focused and experienced in serving
two distinct customer groups: KeyLink Systems, the distribution business unit,
focuses on resellers; the Enterprise Sales Group sells to corporate end users.
The five primary growth industries the division serves are: communications,
manufacturing, distribution, financial services and Internet companies.

Growth Drivers

  In recent years, the enterprise and mid-range computer systems sector has
grown at double-digit rates as companies require increasingly powerful computer
servers and networks to manage their new applications and Internet/Intranet
capabilities. Demand for information storage products and systems with 24/7
capabilities has been especially strong among Web hosting companies,
e-commerce providers and e-businesses.

    The Computer Systems Division is also benefiting from increasing demand for
software and services. During fiscal 2000, the division realigned its software
business with focused sales specialists to complement its hardware offerings and
reinforce its solutions marketing program. KeyLink Systems has established a
dedicated practice focused on marketing e-business solutions to the ISP/ASP and
"dot-com" market space. In the services area, the division has expanded its
offering of programs in server system design implementation, performance tuning,
automated backup and recovery, and data migrations.

                                    [PHOTO]

The Underground site provides direct online access to the Computer Systems
Division's customer relationship management tools.


                                       10
<PAGE>   13

The five primary growth industries for the division are: communications,
manufacturing, distribution, financial services and Internet companies.

KEYLINK SYSTEMS(R)

KeyLink Systems is the business unit within the Computer Systems Division that
sells to resellers located throughout North America. Resellers are a large and
growing part of the computer systems market. They provide technology solutions
to their end-user customers, many of whom are on the cutting edge of the
information economy.

     Through high-level partnerships with Compaq, IBM, Intel and Oracle, KeyLink
Systems provides resellers with the technology to offer their customers
state-of-the-art solutions. KeyLink Systems combines that technology with
systems integration, logistics, business consulting and marketing support to
help resellers expand their market reach and serve their customers better.
KeyLink Systems is committed to the continual development of its current
reseller customer base, helping them establish new growth opportunities for
their businesses, and recruiting new growth-oriented resellers.

ENTERPRISE SALES GROUP

The Enterprise Sales Group focuses on identifying and implementing information
technology solutions directly for large and mid-sized end-user customers. Its
customer base includes some of the world's largest and best-known electronic
commerce and information technology companies. This group provides hardware,
software and services in four key technical areas: server consolidation to
maximize information technology infrastructure; eBusiness for keeping
companies in touch with their customers, suppliers and employees; high
availability for non-stop computing functionality; and storage solutions to
manage and retrieve mission-critical data quickly.

OPERATIONAL EXCELLENCE

For both its reseller and enterprise customers, the Computer Systems Division
brings distinct advantages in operational excellence, customer relationship
management, eBusiness and value-added services to the markets it serves.

     As part of its continuing program in operational excellence, the division
has standardized on best business practices across the division and
consolidated its vendor and customer service programs. Customer relationship
management (CRM) is a major focus, with the division integrating data from
internal and external knowledge bases into a single online environment where
employees and customers can share and use the information efficiently. For
example, Pioneer-Standard's secure Underground

                                    [PHOTO]

Top: The new Systems Integration Value Added Center features state-of-the-art
software configuration and setup, system testing, burn-in and other
integration services. Bottom: KeyLink Systems works with resellers to provide
technology solutions to their end-user customers.


                                       11
<PAGE>   14
                SETTING THE STANDARD FOR TECHNOLOGY DISTRIBUTION

Mid-range servers (top) enable customers such as Web site development firms
(bottom) to design innovative e-business capabilities for their clients.

                                    [PHOTO]

site features custom tools and commerce modules for customers to personalize
information. In a shopping cart format, customers are able to browse the
catalog, configure and price quotes, order online, and check order status. The
Underground also features vendor information such as specification sheets,
product presentations and training. Using the Internet to deliver these
services enables the division to provide best-in-class service.

     The Computer Systems Division has also enhanced its technical service
capabilities, with the April 1999 opening of the new Systems Integration Value
Added Center, one of the largest and most advanced integration facilities in
North America. The paperless, fully automated operation offers software
configuration and setup, system testing, burn-in and other integration services.

Outlook
The Computer Systems Division offers the hardware, software and services that
its reseller and enterprise customers need for increasingly sophisticated Web
and information technology applications. According to one estimate,
approximately 85 percent of the computer servers needed by 2003 have not yet
been purchased or deployed by customers -- a significant growth opportunity for
the division, which has the strategic partnerships, eBusiness tools, customer
relationship management and value-added services expertise to continue to
deliver growth.

     Early in fiscal 2001, Pioneer-Standard announced a strategic equity
investment in Magirus AG, a leading computer systems distributor in Europe. The
combination of KeyLink Systems and Magirus creates one of the largest Compaq
enterprise and IBM mid-range distributors spanning North America and Europe.
KeyLink Systems and Magirus share a strong commitment to serve the reseller
community and, together, have an enhanced ability to serve global enterprise
customers.

           Worldwide online           97       100
           population >               98       151
           (in millions of
           people by end of           99       259
           the calendar year)
                                      00       375
                                      02       490
                                      05       765

The explosion of the World Wide Web is a significant growth driver for the
Computer Systems Division. The number of Web users worldwide is projected to
reach 375 million people by the end of calendar year 2000 and 765 million people
by 2005. An estimated 85 percent of the servers and storage systems needed to
accommodate the growth through 2003 have not yet been sold or created.

                                       12
<PAGE>   15
                            WWW.PIONEERSTANDARD.COM

                   eBUSINESS FAQS: COMPUTER SYSTEMS DIVISION

- -   HOW ARE THE COMPUTER SYSTEMS DIVISION'S EBUSINESS PROGRAMS HELPING
    CUSTOMERS?

The Web allows us to partner with our suppliers and customers very
efficiently, and makes us the strategic link between the two groups. Our
award-winning eBusiness programs are tailored to meet the needs of our two
distinct customer groups -- KeyLink Systems resellers and Enterprise Sales Group
customers. We can design and launch fully operational Web storefronts for our
reseller customers to use to market themselves. We are making it hard for
customers to live without us and giving our people the tools they need to serve
customers better.

- -   WHAT IS THE DIVISION DOING IN CUSTOMER RELATIONSHIP MANAGEMENT?

We have been offering Web-based customer relationship management (CRM) for about
a year, providing extensive real-time information for and about our customers.
CRM is one-to-one marketing, and the Web enables us to personalize information
for customers to help them maximize the benefits of partnering with us. With
electronic CRM, we can "seize the data" to target customers who want to receive
vendor and system-specific technology updates.

- -   WHAT IS THE UNDERGROUND?

The Underground is a secure, Web-based subscriber service that is the
foundation of our online CRM program for our customers. Here, customers can sign
up for all of our automated online services, including email notification of
their order status, subscriptions to information services, marketing support,
sales histories, and maintenance and warranty information. Of particular value
to KeyLink Systems resellers is a complete sales and marketing tool kit through
The Underground's MarketLink service, which features ready-to-use templates of
reseller marketing materials for direct mail, brochures and advertising.

- -   WHAT ADDITIONAL FEATURES ARE YOU INTRODUCING?

We are always looking for ways to enhance our customer service, and eBusiness is
an essential part of that effort. We have many new Web-based tools rolling out
this year to serve our customers and prospects. The Undeground soon will have
modules in place that allow users to further custom-configure their experience
with product bundles, storefronts and a data warehouse system-- all in a secure,
user-defined environment unique to each organization's business needs. Fiscal
2000 was a significant year for the introduction of new services, and fiscal
2001 will be just as important.

- -   HOW IS THE DIVISION USING "PUSH" TECHNOLOGY

Through the KeyMail system, the division provides customers with technology
updates, special promotions from vendors, and order status and shipping
information. Through the Underground Informer, users can choose from a variety
of vendor and product subscription options to receive update information via
e-mail. "Push" technology streamlines and simplifies the purchasing process
for customers, who receive all of the benefits of eBusiness without having to
check the Web site several times a day or even be online.

- -   WHAT ARE THE RESULTS OF THE EBUSINESS PROGRAMS?

More than 70 percent of our customer transactions have some eBusiness component
- -- whether searching for a new product, tracking an order, or using the
MarketLink materials for resellers. The division conducts quarterly surveys to
monitor customer satisfaction at all touch points of the business, including
eBusiness, field sales, inside sales, financial services, warehousing, technical
support and management. The resulting customer satisfaction ratings have been
increasing steadily over the past three years and reached their highest level
ever by the end of fiscal 2000. The eBusiness effort is one of the reasons most
often cited for the high level of satisfaction. We have incorporated such a
vigorous self-serve philosophy that we are able to perform at this high level
while increasing our own efficiency.

                                       13
<PAGE>   16
                SETTING THE STANDARD FOR TECHNOLOGY DISTRIBUTION

BUILDING GLOBAL MOMENTUM

PIONEER-STANDARD SUPPORTS ITS SUPPLIERS AND CUSTOMERS WHEREVER THEY DO BUSINESS,
AND, IN TODAY'S WORLD, THAT MEANS HAVING A GLOBAL REACH. IN RECENT YEARS,
PIONEER-STANDARD HAS BEEN BUILDING GLOBAL MOMENTUM, AND WILL CONTINUE TO PURSUE
SUCH GROWTH OPPORTUNITIES IN FISCAL 2001 AND BEYOND.

In addition to having a large and growing direct presence throughout North
America, Pioneer-Standard holds strategic investments in three partners located
in Asia and Europe: World Peace Industrial Co. Ltd. (WPI) of Taiwan; Eurodis
Electron PLC of the U.K.; and Magirus AG of Germany. These investments provide a
platform for Pioneer-Standard and its equity partners to serve the North
American, Asian and European markets in an integrated, efficient manner. The
three markets have many of the same strong growth drivers, notably the Internet
and communications markets.

COMPONENTS IN ASIA AND EUROPE

During fiscal 2000, Pioneer-Standard increased its investments in both WPI and
Eurodis, which distribute electronic components. Over the year, the three
partners worked together extensively to enhance their sales, marketing,
logistics support and worldwide brand recognition. In addition, the companies
continue to collaborate on their eBusiness and supply chain management
capabilities to offer seamless service to global customers and suppliers.

    Coordination with the global partners has enabled Pioneer-Standard to win
business with North American contract manufacturers and OEMs that require global
sourcing. At the same time, Pioneer-Standard and its partners retain their
ability to manage their own businesses and best serve local customers.

    The Asian semiconductor market in particular is booming, with growth in the
30 percent range during calendar year 1999 and Asia once again accounting for 25
percent of the world-wide semiconductor market. Worldwide, Pioneer-Standard,
WPI and Eurodis are all benefiting from the increased demand for semiconductors
and other components.

COMPUTER SYSTEMS IN EUROPE

The equity investment in Magirus early in fiscal 2001 gives Pioneer-Standard a
significant computer systems presence in Europe. The combination of KeyLink
Systems and Magirus creates one of the largest Compaq enterprise and IBM
mid-range computer distributors worldwide, which enhances Pioneer-Standard's
relationship with these key suppliers. The organizations share a strong
commitment to serving resellers and enterprise customers that require global
sourcing.

    Pioneer-Standard invests in carefully selected partners to ensure that they
have similar values and complementary business objectives, and offer good
growth potential. These investments in locally based distributors enable
Pioneer-Standard to expand its global reach while continuing to meet the needs
of its core market in North America.

                                       14
<PAGE>   17
                            WWW.PIONEERSTANDARD.COM














FINANCIAL REVIEW
FISCAL 2000

Management's Discussion and Analysis       16

Financial Statements                       20

Notes to Financial Statements              24

Five-Year Summary of Operations            34

Corporate Directory                        35

Shareholder Information                    36

[3 PHOTOS]


                                       15
<PAGE>   18
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION


RESULTS OF OPERATIONS

Fiscal 2000 Compared with Fiscal 1999

CONSOLIDATED SALES

Fiscal 2000 was the 14th consecutive year of record sales and the 28th year in
the 29 years the Company has been public in which sales increased. Net sales for
the year ended March 31, 2000, of $2,550.7 million increased 13 percent over
sales of the prior year of $2,259.1 million. Both of the Company's segments
contributed to the increase in sales.

SEGMENT SALES

The Company's business is classified into two operating segments:

    Computer Systems products include mid-range computer systems and high-end
platforms, storage subsystems, software, servers, personal computers, display
terminals and networking products.

    Computer systems accounted for 48 percent of the Company's sales in fiscal
2000 compared with 50 percent a year ago. Sales of computer systems increased 8
percent in fiscal 2000.

    Industrial Electronics products are comprised of semi-conductors, and
interconnect, passive and electromechanical products. Semiconductors are the
building blocks of computer chips and include microprocessors, memory devices,
programmable logic devices, and analog and digital integrated circuits.
Interconnect, passive and electro-mechanical products are devices that move or
use an electrical signal and include capacitors, connectors, resistors,
potentiometers, switches and power conditioning equipment.

    Industrial electronics accounted for 52 percent of sales in fiscal 2000
compared with 50 percent a year ago. The increase in industrial electronics
sales of 18 percent in fiscal 2000 is primarily attributable to the increased
demand for semiconductors from the Internet and communications markets.

GROSS MARGINS

Gross margin for the consolidated operations decreased to 15.5 percent for
fiscal 2000 from 15.6 percent in the prior year.

    The gross margin for computer systems declined to 14.8 percent of sales in
fiscal 2000 from 16.4 percent a year ago. The decrease is primarily attributable
to continued pricing pressures within the market.

    The gross margin for industrial electronics increased to 16.2 percent in
fiscal 2000 from 14.8 percent a year ago. The increase is attributable primarily
to the industry's strengthening demand versus supply, positively impacting
average selling prices.

    Management expects overall gross margin pressure to continue in the next
fiscal year.

OPERATING EFFICIENCIES

Warehouse, selling and administrative expenses for consolidated operations
were 11.5 percent of sales in fiscal 2000, down from 11.8 percent of sales in
the prior year. During 2000, the improvements came from operating efficiencies,
coupled with the effects of cost controls.

     Efficiencies were realized through improved employee productivity and
working capital management. Sales per employee increased to $1,038,000 from
$879,000 in 1999, which represents a gain of approximately 18 percent. Accounts
receivable remained at 44 days in 2000. Inventory turnover of 6.1 times
increased from 5.5 times in the prior year.

    The resulting consolidated operating profit of $101.5 million was up 19
percent from $84.9 million in 1999. Consolidated operating profit was 4.0
percent of sales in 2000 compared with 3.8 percent of sales in 1999, reflecting
the operating expense improvement in fiscal 2000.

    Operating profit margin for computer systems of 3.1 percent decreased from
4.4 percent in fiscal 1999 primarily due to pricing pressures.

    Operating profit margin for industrial electronics increased to 4.8 percent
from 3.1 percent in fiscal 1999 primarily because of the improvement in gross
margin due to increased demand in relationship to supply.

OTHER INCOME

In fiscal 2000, the Company recorded a pre-tax gain of $1.8 million related to
the sale and disposal of assets no longer required in the business.

INTEREST EXPENSE

Interest expense was $26.1 million, net of $0.8 million capitalized, in fiscal
2000 compared with $24.3 million a year ago. The increased interest expense is
primarily attributable to the additional debt to fund working capital and
capital expenditures needed to support the ongoing growth needs of the business.


                                       16
<PAGE>   19

TAXES

The effective tax rate for fiscal 2000 was 40.4 percent compared with 39.6
percent a year ago. The tax rate increase was primarily due to the unrecognized
tax benefits associated with the current year operating loss of the Company's
Canadian subsidiary.

NET INCOME

Primarily as a result of the factors noted above, the Company's net income for
fiscal 2000 reached a record high of $40.1 million, an increase of 30 percent,
or $9.3 million, over fiscal 1999 income of $30.8 million.

Diluted earnings per share for fiscal 2000 increased to $1.27 from $1.03 in the
previous year.

Fiscal 1999 Compared with Fiscal 1998

SALES

Fiscal 1999 consolidated net sales of $2,259.1 million increased 34 percent over
sales in the prior year of $1,685.3 million. The increase was primarily
attributable to higher sales volume of computer systems resulting from the
acquisition of Dickens Data Systems, Inc. ("Dickens") on March 31, 1998.
Including the sales of Dickens with the prior year on a pro forma basis, fiscal
1999 sales increased 10 percent compared with fiscal 1998.

    Computer systems sales increased 68 percent in fiscal 1999 primarily due to
added sales resulting from the Dickens acquisition discussed above. This segment
accounted for 50 percent of sales in fiscal 1999 compared with 40 percent in the
prior year.

    Industrial electronics net sales increased 12 percent in fiscal 1999
primarily attributable to the increased sales of the high-volume, low-margin
semiconductor products.

GROSS MARGINS

The fiscal 1999 consolidated gross margin of 15.6 percent decreased from 17.7
percent in the prior year. Both operating segments experienced declines in
gross margin in fiscal 1999 as described below.

    Computer systems gross margin decreased to 16.4 percent from 18.7 percent
primarily due to the Dickens sales earning a lower gross margin compared with
the other computer systems sales. The gross margin for industrial electronics
declined to 14.8 percent in fiscal 1999 from 17.1 percent in 1998. The
decrease was attributable primarily to the increase in sales of high-volume,
low-margin products and to the industry's excess semiconductor supply versus
demand.


OPERATING EFFICIENCIES

Warehouse, selling and administrative consolidated expenses were 11.8 percent
of sales in fiscal 1999 and 13.4 percent in 1998. During 1999, gains resulted
from improvements due to leveraging expenses on higher sales volume, coupled
with the effects of implementing cost controls.

    Efficiencies were realized through improved employee productivity and
inventory turnover. Sales per employee increased to $879,000 from $766,000 in
1998. Receivable collections were 44 days in 1999 and 1998. Inventory turnover
of 5.5 times in 1999 increased from 4.4 times in the prior year.

    The resulting consolidated operating profit of $84.9 million was up 16
percent from $73.0 million in 1998. Consolidated operating profit was 3.8
percent of sales in 1999 compared with 4.3 percent of sales in 1998,
reflecting the gross margin erosion in fiscal 1999 discussed above.

    Computer systems operating profit as a percent of sales decreased to 4.4
percent in 1999 from 5.4 percent in 1998, primarily due to the integration of
Dickens.

    Industrial Electronics operating profit as a percent of sales declined to
3.1 percent in 1999 from 3.6 percent in 1998 primarily due to the gross margin
erosion from the excess capacity in the semiconductor industry.

INTEREST EXPENSE

Interest expense was $24.3 million in fiscal 1999 compared with $20.7 million in
fiscal 1998. The increased interest expense is attributable to additional debt
incurred to fund working capital and capital expenditure requirements neces-
sary to support the ongoing growth needs of the business, as well as the effect
of the acquisition of Dickens.

TAXES

The effective tax rate was 39.6 percent for fiscal 1999 compared with 41.4
percent in fiscal 1998. The tax rate decrease was primarily due to the
utilization of the operating loss carryforward of the Canadian subsidiary and
lower effective state tax rates.

NET INCOME

Primarily as a result of the factors noted above, the Company reported net
income for fiscal 1999 of $30.8 million - an increase of $0.3 million,
or 1 percent over fiscal 1998 net income of $30.5 million.

    Diluted earnings per share for fiscal 1999 decreased to $1.03 from $1.14 in
the previous year. The average diluted shares outstanding increased to 35.7
million in fiscal 1999 from 26.9 million the prior year primarily due to the
issuance of convertible trust preferred securities a year ago.


                                       17
<PAGE>   20

RISK CONTROL

The Company has assets, liabilities and cash flows in foreign currencies
creating foreign exchange risk with the primary foreign currency being the
Canadian dollar. Systems are in place for continuous measurement and evaluation
of foreign exchange exposures so that timely action can be taken when considered
desirable. Reducing exposure to foreign currency fluctuations is an integral
part of the Company's risk management program. Financial instruments in the form
of forward exchange contracts are employed as one of the methods to reduce such
risk. At March 31, 2000, one forward exchange contract in the amount of $2.7
million existed with a maturity of 30 days. The foreign exchange contracts have
had an immaterial impact on the Company's results of operations for the fiscal
years ended 2000, 1999 and 1998.

    The Company has entered into several interest rate swap agreements for
purposes of serving as a hedge of the Company's variable rate credit agreement
borrowings. The effect of the swaps is to establish fixed rates on the variable
rate debt and to reduce exposure to interest rate fluctuations. At March 31,
2000, the Company had interest rate swaps with a notional amount of $70 million.
Pursuant to these agreements, the Company pays interest at a weighted average
fixed rate of 5.47 percent. The weighted average LIBOR rates applicable to these
agreements were 6.11 percent at March 31, 2000. The swap agreements have had an
immaterial impact on the Company's results of operations for the fiscal years
ended 2000, 1999 and 1998.

    The Company is exposed to interest rate risk from the revolving credit
facility's various floating rate pricing mechanisms. This interest rate
exposure is managed by the interest rate swaps to fix the interest rate on a
portion of the debt and the use of multiple maturity dates. If interest rates
were to increase 100 basis points (1 percent) from March 31, 2000 rates, and
assuming no changes in debt from March 31, 2000 levels, the additional
annualized net expense would be approximately $1.2 million or $.02 per diluted
share.

    The Company is exposed to credit loss in the event of nonperformance by the
other party to the derivative financial instruments. The Company limits this
exposure by entering into agreements with major financial institutions that meet
credit standards established by the Company and that are expected to satisfy
fully their obligations under the contracts.

    The Company extends credit based on customers' financial conditions, and
generally, collateral is not required. The Company obtains credit insurance in
certain circumstances to protect its interests. Credit losses are provided for
in the financial statements when collections are in doubt.

    Inflation has had a nominal effect on the Company's operations.

NEW ACCOUNTING STANDARDS

In 1998, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and
Hedging Activities," which requires all derivatives to be recognized on the
balance sheet at fair value. This statement is effective for fiscal years
beginning after June 15, 2000. Derivatives that are not hedges must be adjusted
to fair value through income. If the derivative is a hedge, depending on the
nature of the hedge, changes in the fair value of the derivative will either be
offset against the change in fair value of the hedged assets, liabilities or
firm commitments through earnings or recognized in other comprehensive income
until the hedged item is recognized in earnings. Management is in the process of
analyzing and assessing the impact of the adoption of SFAS 133 on the
Company's consolidated results of operations and financial position. The Company
must adopt the statement no later than April 1, 2001.

    In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin (SAB) 101, "Revenue Recognition in Financial Statements,"
which summarizes the staff's views regarding the application of generally
accepted accounting principles to selected revenue recognition issues and is
effective July 1, 2000. The Company is currently assessing the impact SAB 101
will have on the Company's results of operations.

LIQUIDITY AND CAPITAL RESOURCES

Current assets including cash increased by $124.5 million and current
liabilities increased by $99.3 million for the year ended March 31, 2000,
resulting in an increase of $25.2 million of working capital. Increased sales
in the fourth quarter of fiscal 2000 compared with the same quarter a year ago,
and the weighting of sales within the fourth quarter resulted in increased
current asset needs. The increase in current liabilities is primarily
attributable to increased inventory funding requirements. The Company's
current ratio was 2.7:1 at March 31, 2000, and 3.4:1 at year-end March 31, 1999.

    The Company's revolving credit facility has a total capacity of $260.0
million, all of which may be borrowed as of March 31, 2000 in accordance with
availability requirements which are subject to meeting certain minimum ratios.
As of March 31, 2000, $170.0 million was borrowed under the facility. A year
ago, such borrowings aggregated $160.0 million.

    Capital expenditures were $36.0 million in fiscal 2000 compared with $22.2
million in 1999. This spending reflects ongoing initiatives designed to improve
efficiencies through computer enhancement of operating processes as well as
expanded facilities. Management estimates that capital expenditures will be in
the range of $25.0 million in fiscal 2001.

                                       18
<PAGE>   21

    During fiscal 2000, the Company made additional investments in World Peace
Industrial Co. Ltd., Eurodis Electron PLC and two other investments in the
United States totaling $13.9 million. These investments further the Company's
growth strategy by offering access to an extensive distribution network in the
Asia-Pacific region, Europe and markets within the United States. Subsequent to
year end, in May 2000, the Company purchased a minority equity interest in
Magirus AG, a leading European computer systems distributor. Headquartered in
Stuttgart, Magirus employs more than 300 people in Germany, Austria, France,
Italy, Spain and Switzerland.

    During fiscal 2000, total interest-bearing debt increased by $23.3 million.
The increase in debt is primarily attributable to funding working capital
requirements. The ratio of interest-bearing debt to capitalization was 43
percent at March 31, 2000 compared with 44 percent a year ago.

    The Company believes that cash generated from operations and amounts
available under its credit facility are sufficient to fund its working capital
and capital expenditure requirements.

INFORMATION TECHNOLOGY SYSTEMS

The Company capitalized approximately $34.2 million in fiscal 1998 and 1999 in
connection with the acquisition and installation of an enterprise-wide
information technology "IT" system. Amounts representing approximately $11.5
million of these expenditures were operational in fiscal 1999 and $8.5 million
are planned to become operational in fiscal 2001. The balance of $14.2 million
represents work-in-process components which are not yet operational. The
Company is evaluating these components and presently has no reason to believe
that they will not become operational. In addition, management believes there
would be no material adverse effect on the financial condition or results of
operations of the Company should such components require further
modification or replacement. It is contemplated that implementation for
completing the balance of the IT system installation will commence in fiscal
2001.

YEAR 2000

The Company completed its year 2000 remediation efforts and, since the turn of
the century, has not experienced any significant problems internally or with
suppliers and customers in connection with this event. Nevertheless, there
still remain some future dates that could potentially cause computer system
problems. The Company continues to monitor these dates and address any necessary
remediation but does not anticipate any major impact on its operations.

OTHER EVENTS

On May 13, 1999, ProGen Technologies, Inc. "ProGen", one of the Company's major
customers, filed for protection under Chapter 11 of the U.S. Bankruptcy Code in
the Central District of the State of California. On June 18, 1999, ProGen made a
motion, which was granted, to convert its Chapter 11 proceeding to a Chapter 7
proceeding. At the time of the bankruptcy filing, ProGen owed the Company
approximately $9.3 million. The bankruptcy court has appointed a Trustee who has
proceeded with liquidation of the assets of ProGen. The Company continues to
assert its security interest and rights in the bankruptcy proceedings. At this
time, management believes, due to the Company's status in the bankruptcy
proceedings, any effects resulting from this matter will not have a material
adverse effect on the consolidated financial condition or results of operations
of the Company.

    On February 11, 2000, the Company experienced a fire at its Twinsburg, Ohio
distribution center. This event affected approximately 3 percent of the
Company's inventory but caused no structural damage or major disruption. The
Company believes it has adequate insurance coverage to offset any property
loss or business impact resulting from the fire.

FORWARD-LOOKING INFORMATION

Portions of this report contain current management expectations which may
constitute forward-looking information. The Company's performance may differ
materially from that contemplated by such statements for a variety of reasons,
including, but not limited to: competition, dependence on the computer market,
inventory obsolescence and technology changes, dependence on key suppliers,
effects of industry consolidation, risks and uncertainties involving
acquisitions, instability in world financial markets, downward pressure on gross
margins, uneven patterns of inter-quarter and intra-quarter sales, and
management of growth of the business.

                                       19
<PAGE>   22

CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 2000 and 1999                                                        2000                 1999
- --------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                   <C>
Assets

CURRENT ASSETS:

Cash and cash equivalents                                              $    34,253,000       $    28,898,000
Accounts receivable, less allowance for doubtful accounts
  (2000 - $5,681,000, 1999 - $6,035,000)                                   407,309,000           323,461,000
Merchandise inventory                                                      348,120,000           314,362,000
Prepaid expenses                                                             2,871,000             2,475,000
Deferred income taxes                                                        9,178,000             8,049,000
- --------------------------------------------------------------------------------------------------------------
    Total current assets                                                   801,731,000           677,245,000

INVESTMENT AND OTHER ASSETS:
Intangible assets                                                          150,503,000           154,405,000
Investments in affiliated companies                                         46,030,000            13,964,000
Other assets                                                                 8,055,000             7,898,000

PROPERTY AND EQUIPMENT, AT COST:

Land                                                                           572,000               828,000
Building                                                                     8,997,000            10,264,000
Furniture and equipment                                                    100,564,000            87,000,000
Software                                                                    60,054,000            53,310,000
Leasehold improvements                                                      22,439,000            12,200,000
- --------------------------------------------------------------------------------------------------------------
                                                                           192,626,000           163,602,000
Less accumulated depreciation and amortization                              86,729,000            72,645,000
- --------------------------------------------------------------------------------------------------------------
    Net property and equipment                                             105,897,000            90,957,000
- --------------------------------------------------------------------------------------------------------------
                                                                       $ 1,112,216,000       $   944,469,000
==============================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable                                                       $   240,229,000       $   155,705,000
Note payable                                                                26,086,000             9,674,000
Income taxes                                                                   673,000             1,216,000
Accrued salaries, wages and commissions                                     13,456,000             8,649,000
Other accrued liabilities                                                   16,702,000            22,550,000
Long-term debt due within one year                                           3,052,000             3,104,000
- --------------------------------------------------------------------------------------------------------------
    Total current liabilities                                              300,198,000           200,898,000
Long-term debt                                                             320,205,000           313,240,000
Deferred income taxes and other                                             23,998,000            15,078,000
Company obligated mandatorily redeemable convertible
 preferred securities of trust, holding solely 6 3/4% convertible
 subordinated debentures of the Company                                    143,750,000           143,750,000

SHAREHOLDERS' EQUITY:
Serial preferred shares, without par value: authorized 5,000,000;
  issued and outstanding - none                                                     --                    --

Common shares, without par value, $.30 stated value:
  authorized 80,000,000 shares; 31,349,751 outstanding
  shares (including 4,056,202 subscribed-for shares) in
  2000 and 31,134,741 shares (including 4,780,000
  subscribed-for shares) in 1999                                             9,323,000             9,258,000

Capital in excess of stated value                                          137,092,000            93,324,000
Retained earnings                                                          238,968,000           202,056,000
Unearned employee benefits                                                 (63,885,000)          (31,369,000)
Unearned compensation on restricted stock                                   (7,526,000)                   --
Accumulated other comprehensive income (loss)                               10,093,000            (1,766,000)
- --------------------------------------------------------------------------------------------------------------
Total shareholders' equity                                                  324,065,000           271,503,000
- --------------------------------------------------------------------------------------------------------------
                                                                       $ 1,112,216,000       $   944,469,000
=============================================================================================================
</TABLE>


See accompanying notes to consolidated financial statements.


                                       20
<PAGE>   23



CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
Years ended March 31, 2000, 1999 and 1998                            2000                1999                 1998
- ------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                 <C>                 <C>
Net sales                                                      $2,550,685,000      $2,259,083,000      $1,685,265,000
Operating costs and expenses:
  Cost of goods sold                                            2,154,932,000       1,906,657,000       1,386,666,000
  Warehouse, selling and administrative expenses                  294,299,000         267,505,000         225,649,000
- ------------------------------------------------------------------------------------------------------------------------
                                                                2,449,231,000       2,174,162,000       1,612,315,000
- ------------------------------------------------------------------------------------------------------------------------
Operating profit                                                  101,454,000          84,921,000          72,950,000
Other income                                                        1,845,000                  --                  --
Interest expense                                                   26,074,000          24,253,000          20,717,000
- ------------------------------------------------------------------------------------------------------------------------
Income before income taxes                                         77,225,000          60,668,000          52,233,000
Provision for income taxes:
Federal
  Current                                                          26,302,000          14,825,000          13,584,000
  Deferred                                                          1,229,000           5,655,000           5,124,000
- ------------------------------------------------------------------------------------------------------------------------
                                                                   27,531,000          20,480,000          18,708,000
State                                                               3,679,000           3,538,000           2,916,000
- ------------------------------------------------------------------------------------------------------------------------
                                                                   31,210,000          24,018,000          21,624,000
Distributions on mandatorily redeemable convertible trust
  preferred securities, net of tax                                  5,870,000           5,841,000             112,000
- ------------------------------------------------------------------------------------------------------------------------
Net income                                                     $   40,145,000      $   30,809,000      $   30,497,000
- ------------------------------------------------------------------------------------------------------------------------
Earnings per common share:
  Basic                                                        $         1.52      $         1.17      $         1.16
  Diluted                                                      $         1.27      $         1.03      $         1.14
========================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                       21
<PAGE>   24



CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Years ended March 31, 2000, 1999 and 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------

                                        Stated value  Capital in                    Unearned
                                Common   of common     excess of      Retained       employee
                                shares     shares     stated value    earnings       benefits
- -----------------------------------------------------------------------------------------------
<S>                           <C>        <C>         <C>           <C>            <C>
BALANCE AT
  MARCH 31, 1997              31,034,545 $9,228,000  $121,489,000  $147,055,000   $(63,750,000)
Net income                                                           30,497,000
Unrealized translation
  adjustment
Total comprehensive income
Shares sold by trust                                      504,000                    2,805,000
Value change in
  subscribed-for shares                                (2,390,000)                   2,390,000
Cash dividends
  ($.12 per share)                                                   (3,141,000)
Shares issued upon
  exercise of stock options       94,009     28,000       737,000
Tax benefit related to
  exercise of stock options                               125,000
- -----------------------------------------------------------------------------------------------
BALANCE AT
  MARCH 31, 1998              31,128,554  9,256,000   120,465,000   174,411,000    (58,555,000)
Net income                                                           30,809,000
Unrealized translation
  adjustment
Total comprehensive income
Value change in
  subscribed-for shares                               (27,186,000)                  27,186,000
Cash dividends
  ($.12 per share)                                                   (3,164,000)
Shares issued upon
  exercise of stock options        6,187      2,000        36,000
Tax benefit related to
  exercise of stock options                                 9,000

- -----------------------------------------------------------------------------------------------
BALANCE AT
  MARCH 31, 1999              31,134,741  9,258,000    93,324,000   202,056,000    (31,369,000)
Net income                                                           40,145,000
Unrealized translation
  adjustment
Unrealized gain on securities
Total comprehensive income
Shares transferred from trust   (723,798)   (217,000)   (9,553,000)                   9,770,000
Value change in
  subscribed-for shares                                42,286,000                  (42,286,000)
Cash dividends
  ($.12 per share)                                                   (3,233,000)
Shares issued upon
  exercise of stock options      215,010    65,000     1,186,000
Tax benefit related to
  exercise of stock options                               296,000
Restricted stock awards          723,798   217,000      9,553,000
Amortization of unearned
   compensation
- -----------------------------------------------------------------------------------------------
BALANCE AT
  MARCH 31, 2000              31,349,751 $9,323,000  $137,092,000  $238,968,000   $(63,885,000)
- -----------------------------------------------------------------------------------------------




<CAPTION>
- ---------------------------------------------------------------------------
                               Unearned      Accumulated
                             compensation       other
                             on restricted   comprehensive
                                stock        income (loss)    Total
- ---------------------------------------------------------------------------
<S>                          <C>               <C>           <C>
BALANCE AT
  MARCH 31, 1997                     --     $   (43,000)   $  213,979,000
Net income                                                     30,497,000
Unrealized translation
  adjustment                                   (538,000)         (538,000)
                                                               ----------
Total comprehensive income                                     29,959,000
Shares sold by trust                                            3,309,000
Value change in
  subscribed-for shares                                                --
Cash dividends
  ($.12 per share)                                             (3,141,000)
Shares issued upon
  exercise of stock options                                       765,000
Tax benefit related to
  exercise of stock options                                       125,000
- ---------------------------------------------------------------------------
BALANCE AT
  MARCH 31, 1998                     --           (581,000)   244,996,000
Net income                                                     30,809,000
Unrealized translation
  adjustment                                    (1,185,000)    (1,185,000)
                                                              -----------
Total comprehensive income                                     29,624,000
Value change in
  subscribed-for shares                                                --
Cash dividends
  ($.12 per share)                                             (3,164,000)
Shares issued upon
  exercise of stock options                                        38,000
Tax benefit related to
  exercise of stock options                                         9,000

- ---------------------------------------------------------------------------
BALANCE AT
  MARCH 31, 1999                     --         (1,766,000)   271,503,000
Net income                                                     40,145,000
Unrealized translation
  adjustment                                       833,000        833,000
Unrealized gain on securities                   11,026,000     11,026,000
                                                               ----------
Total comprehensive income                                     52,004,000
Shares transferred from trust                                          --
Value change in
  subscribed-for shares                                                --
Cash dividends
  ($.12 per share)                                             (3,233,000)
Shares issued upon
  exercise of stock options                                     1,251,000
Tax benefit related to
  exercise of stock options                                       296,000
Restricted stock awards      $(9,770,000)                              --
Amortization of unearned
   compensation                2,244,000                        2,244,000
- ---------------------------------------------------------------------------
BALANCE AT
  MARCH 31, 2000             $(7,526,000)      $10,093,000   $324,065,000
- ---------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.

                                       22
<PAGE>   25


CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Years ended March 31, 2000, 1999 and 1998                             2000                      1999                 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                      $  40,145,000       $  30,809,000       $  30,497,000
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
       Depreciation                                                  14,661,000          14,379,000          11,193,000
       Amortization                                                  11,682,000           8,611,000           3,788,000
       Gain on sale of property and equipment                        (1,845,000)                 --                  --
       Increase in operating working capital                        (33,638,000)        (33,110,000)       (115,151,000)
       Decrease in other assets and other liabilities                  (727,000)           (796,000)         (7,068,000)
       Deferred taxes                                                 1,229,000           5,655,000           5,124,000
- ---------------------------------------------------------------------------------------------------------------------------
         Total adjustments                                           (8,638,000)         (5,261,000)       (102,114,000)
- ---------------------------------------------------------------------------------------------------------------------------
         Net cash provided by (used in) operating activities         31,507,000          25,548,000         (71,617,000)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property and equipment                               (36,030,000)        (22,137,000)        (44,283,000)
  Acquisition of businesses, net of cash acquired                            --                  --        (123,253,000)
  Investments in affiliated companies                               (13,908,000)         (7,433,000)         (6,531,000)
  Proceeds from sale of property and equipment                        2,712,000                  --                  --
- ---------------------------------------------------------------------------------------------------------------------------
         Net cash used in investing activities                      (47,226,000)        (29,570,000)       (174,067,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase (decrease) in short-term financing                        16,412,000           9,674,000         (20,500,000)
  Increase (decrease) in revolving credit borrowings                 10,000,000         (20,000,000)        146,859,000
  Principal payments under long-term debt obligations                (3,087,000)         (2,991,000)         (2,883,000)
  Proceeds from sale of trust securities                                     --                  --           3,309,000
  Proceeds from issuance of mandatorily redeemable
    convertible trust preferred securities                                   --          18,750,000         125,000,000
  Issuance of common shares under stock option plans                  1,251,000              38,000             765,000
  Tax benefit related to exercise of stock options                      296,000               9,000             125,000
  Dividends paid                                                     (3,233,000)         (3,164,000)         (3,141,000)
- ---------------------------------------------------------------------------------------------------------------------------
         Net cash provided by financing activities                   21,639,000           2,316,000         249,534,000

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                (565,000)         (1,395,000)             33,000
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                  5,355,000          (3,101,000)          3,883,000

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                       28,898,000          31,999,000          28,116,000

CASH AND CASH EQUIVALENTS AT END OF YEAR                          $  34,253,000       $  28,898,000       $  31,999,000
===========================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements



                                       23
<PAGE>   26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1
OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

The Company distributes a broad range of electronic components and computer
systems products manufactured by others. These products are sold to original
equipment manufacturers, value-added resellers, research laboratories,
government agencies and end users, including manufacturing companies and service
and other non-manufacturing organizations. The Company has operations in the
United States, Canada and affiliates in United States, Europe and the Asia
Pacific region.

    The Company maintains the following significant accounting policies:

    Principles of Consolidation The consolidated financial statements include
the accounts of the Company and its subsidiaries. All significant intercompany
transactions and accounts have been eliminated.

    Cash Equivalents The Company considers highly liquid instruments with a
maturity of 90 days or less at date of purchase to be cash equivalents.

    Merchandise Inventory Inventory is stated at the lower of cost (first-in,
first-out basis) or market. The Company's inventory is constantly monitored for
obsolescence. This review considers such factors as turnover, technical
obsolescence, right of return status to suppliers and price protection offered
by suppliers. Reserves for slow-moving and obsolete inventory at March 31 were
$6,770,000 in 2000 and  $5,397,000 in 1999.

    Investments in Affiliated Companies The Company`s investments in affiliated
companies include equity securities, accounted for using the cost method, which
are classified as available-for-sale. These investments are stated at their
estimated fair value of $40,280,000 and $13,964,000 at March 31, 2000 and 1999,
respectively, based upon market quotes. Unrealized gains and losses, net of tax,
are reported as a separate component of accumulated other comprehensive income
in shareholders' equity until realized. Other investments of $5,750,000 at March
31, 2000, are carried at cost as there are no quoted market prices available for
these securities. A decline in the value of any investment below cost that is
deemed to be other than temporary is charged to earnings.

    Long-Lived Assets Property and equipment are recorded at cost. The Company
capitalizes costs associated with the development and installation of internal
use software in accordance with Statement of Position 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use." Accordingly,
internal use software costs are expensed or capitalized depending on whether
they are incurred in the preliminary project stage, application development
stage, or the post-implementation/operation stage. Amounts capitalized are
amortized over the estimated useful lives of the software, ranging from 5 to 7
years, beginning with the project's completion. All reengineering costs are
expensed as incurred. The Company capitalizes interest cost on capital projects.
Depreciation and amortization is computed using the straight-line method based
on the estimated useful lives of the assets as follows: buildings, 40 years;
furniture, 10 years; equipment, 5 to 10 years; software, 5 to 7 years; and
leasehold improvements over the applicable lease periods.

    The Company capitalized approximately $34.2 million in fiscal 1998 and 1999
in connection with the acquisition and installation of an enterprise-wide
information technology "IT" system. Amounts representing approximately $11.5
million of these expenditures were operational in fiscal 1999 and $8.5 million
are planned to become operational in fiscal 2001. The balance of $14.2 million
represents work-in-process components which are not yet operational. The Company
is evaluating these components and presently has no reason to believe that they
will not become operational. In addition, management believes there would be no
material adverse effect on the financial condition or results of operations of
the Company should such components require further modification or replacement.
It is contemplated that implementation for completing the balance of the IT
system installation will commence in fiscal 2001.

    Intangible assets represent the excess of cost over value assigned to net
assets of purchased businesses, which is being amortized on the straight-line
method over 40 years. Accumulated amortization at March 31 was $11,961,000 in
2000 and $7,827,000 in 1999. Impairment of long-lived assets and related
intangible assets is recognized when events or changes in circumstances indicate
that the carrying amount of the asset, or related groups of assets, may not be
recoverable. If the future undiscounted cash flows are not sufficient to recover
the carrying value of the asset, the assets are adjusted to the then fair value.

    Derivative Financial Instruments Derivative financial instrument contracts
are utilized by the Company to manage interest rate and foreign exchange risks.
The Company has established a control environment which includes policies and
procedures for risk assessment. Company policy prohibits holding or issuing
derivative financial instruments for trading purposes.

    Interest Rate Contracts -The differentials to be received or paid are
recognized in income over the life of the contracts as adjustments to interest
expense.

    Foreign Exchange Contracts - Gains and losses on foreign exchange contracts
are included in net income.

    Revenue Recognition Revenue is recognized when customers' orders are
complete and shipped.

    Foreign Currency The assets and liabilities of foreign operations are
translated into U.S. dollars at the exchange rates in effect at the balance
sheet date, whereas income statement accounts are translated at the weighted
average

                                       24

<PAGE>   27

exchange rates for the year. The gains or losses resulting from these
translations are recorded as a separate component of accumulated other
comprehensive income (loss). Gains or losses resulting from realized foreign
currency transactions are included in net income.

    Comprehensive Income The components of accumulated other comprehensive
income at March 31, 2000, consisted of foreign currency translation losses of
$933,000 and unrealized gains on securities of $11,026,000, net of income taxes
of $7,132,000. At March 31, 1999, accumulated other comprehensive loss consisted
of $1,766,000 of foreign currency translation losses.

    Advertising Promotion All costs associated with advertising and promoting
products are expensed in the year incurred. Advertising and promotion expense
was $2,746,000 in 2000, $3,214,000 in 1999, and $2,784,000 in 1998.

    Stock-Based Compensation The Company accounts for stock-based employee
compensation in accordance with the provisions of APB Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations.

    Use of Estimates The financial statements are prepared in conformity with
generally accepted accounting principles and, accordingly, include management's
best estimates and judgments where applicable. Actual results could differ from
those estimates.

    Reclassification Certain 1999 and 1998 amounts have been reclassified to
conform with the 2000 presentation.

    New Accounting Standards  In 1998, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards (SFAS) No.133,
"Accounting for Derivative Instruments and Hedging Activities," which requires
all derivatives to be recognized on the balance sheet at fair value. This
statement is effective for fiscal years beginning after June 15, 2000.
Derivatives that are not hedges must be adjusted to fair value through income.
If the derivative is a hedge, depending on the nature of the hedge, changes in
the fair value of the derivative will either be offset against the change in
fair value of the hedged assets, liabilities or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. Management is in the process of analyzing and assessing
the impact of the adoption of SFAS 133 on the Company's consolidated results of
operations and financial position. The Company must adopt the statement no
later than April 1, 2001.

    In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin (SAB) 101, "Revenue Recognition in Financial Statements,"
which summarizes the staff's views regarding the application of generally
accepted accounting principles to selected revenue recognition issues and is
effective July 1, 2000. The Company is currently assessing the impact SAB 101
will have on the Company's results of operations.

NOTE 2
ACQUISITION

On March 31, 1998, the Company acquired 100 percent of the outstanding capital
stock of Dickens Data Systems, Inc. for $121.0 million in cash. The acquisition
was accounted for using the purchase method of accounting. Accordingly, the
assets and liabilities of Dickens Data Systems, Inc. are included in the
consolidated balance sheet at their estimated fair value as of March 31, 1998.
The excess of the purchase price over the fair value of the net assets acquired
approximated $119.1 million and is being amortized over 40 years.

    The following unaudited pro forma information presents a summary of
consolidated results of operations for the Company and Dickens Data Systems,
Inc. for the fiscal year 1998 (incorporating Dickens Data Systems, Inc.
financial statements for the year ended March 31, 1998) as if the acquisition
had occurred at the beginning of the fiscal year, with pro forma adjustments to
give effect to amortization of goodwill, interest expense on acquisition debt
and certain other adjustments, together with related income tax effects:

                                                   1998
- --------------------------------------------------------------
Net sales                                     $2,052,405,000
Net income                                        32,665,000
Net income per share
  Basic                                                $1.25
  Diluted                                              $1.22
- --------------------------------------------------------------

NOTE 3
NOTES PAYABLE AND LONG-TERM DEBT

NOTES PAYABLE:
    The Company has a note payable with a financing company for the purchase of
certain inventory extending the terms beyond normal accounts payable terms.
Amounts outstanding at March 31, 2000 and 1999, were $26,086,000 and $9,674,000,
respectively. The note is not interest-bearing if amounts are paid in accordance
with terms of the financing agreement.

LONG-TERM DEBT:
    Long-term debt at March 31, 2000 and 1999, consisted of the following:

                                    2000           1999
- -------------------------------------------------------------
Revolving credit facility       $170,000,000    $160,000,000
8.5% Senior Notes                150,000,000     150,000,000
9.79% Senior Notes                 2,840,000       5,700,000
Other                                417,000         644,000
- -------------------------------------------------------------
                                 323,257,000     316,344,000
Less amounts due
  within one year                  3,052,000       3,104,000
- -------------------------------------------------------------
                                $320,205,000    $313,240,000
=============================================================



                                       25
<PAGE>   28

    The Company has a revolving credit facility with various banks providing for
up to an aggregate amount of $260 million of unsecured borrowings on a revolving
credit basis for an initial term until March 27, 2003. The weighted average
interest rate on borrowings under this facility at March 31, 2000 and 1999, were
7.32 percent and 6.08 percent, respectively. In addition, on an annual basis,
the facility may be extended for a one-year period with the consent of all
members of the bank group. Interest rates on borrowings are based on various
floating rate alternative pricing mechanisms. There is a fee ranging from .25
percent to .375 percent on the amount of the total facility, and there is no
pre-payment penalty.

    The Company has entered into several interest rate swap agreements for
purposes of hedging the Company's variable rate credit agreement borrowings. The
effect of the swaps is to establish fixed rates on the variable rate debt and to
reduce exposure to interest rate fluctuations. At March 31, 2000, the Company
had interest rate swaps with a notional amount of $70 million. Pursuant to these
agreements, the Company pays interest at a weighted average fixed rate of 5.47
percent. The weighted average LIBOR rates applicable to these agreements were
6.11 percent at March 31, 2000.

    The Company has $150 million principal amount of 8.5 percent Senior Notes
due August 2006. Interest is payable semi-annually. The net proceeds from the
sale of the Notes were applied to the repayment of a portion of the borrowings
under the Company's revolving credit facility. The indenture under which the
Notes were issued limits the creation of liens; sale and leaseback transactions;
consolidations, mergers and transfers of all or substantially all of the
Company's assets; and indebtedness of the Company's restricted subsidiaries. The
Notes are subject to mandatory repurchase by the Company at the option of the
holders in the event of a change in control of the Company.

    A principal payment of $2.84 million is due November 1, 2000, on the 9.79
percent Senior Notes. Interest is payable semi-annually.

    The terms of the credit agreement and 9.79 percent Senior Note Purchase
Agreement provide for, among other things, restrictions regarding the payment of
cash dividends and purchase of the Company's Common Shares, limitations
on other borrowings and capital expenditures, minimum working capital
requirements, and the maintenance of certain financial ratios. Unrestricted
retained earnings available for dividends at March 31, 2000, under the most
restrictive covenants are $49 million.

    Aggregate maturities of long-term debt for the next five fiscal years are:
2001-$3,052,000; 2002-$146,000; 2003- $170,059,000; 2004-$0 and 2005-$0.

NOTE 4
LEASE COMMITMENTS

The Company is committed to lease agreements ranging up to 10 years, which
contain renewal options for periods up to 10 years, for certain facilities and
equipment.

    Future minimum lease payments for operating leases at March 31, 2000, are:
2001-$7,945,000; 2002-$6,519,000; 2003-$5,676,000; 2004-$4,978,000;
2005-$4,070,000; and thereafter $10,598,000.

    Rental expense for operating leases was $11,588,000, $9,200,000 and
$6,602,000 for 2000, 1999 and 1998, respectively.

NOTE 5
INCOME TAXES

The following is a reconciliation of the Company's effective income tax rate to
the federal statutory rate:

                              2000          1999        1998
- ------------------------------------------------------------------
Statutory rate                 35.0%        35.0%        35.0%
Provision for state taxes       3.1          3.8          3.6
Foreign losses with
  unrecognized
  (recognized) tax benefits     1.1          (.3)         1.2
Non-deductible and other        1.2          1.1          1.6
- ------------------------------------------------------------------
Effective rate                 40.4%        39.6%        41.4%
==================================================================

    Deferred tax assets and liabilities as of March 31, 2000 and 1999, are
presented below:

                                         2000            1999
- ------------------------------------------------------------------
Deferred tax assets:
  Capitalized inventory costs       $  2,723,000    $  2,697,000
  Accrued expenses                     1,978,000       1,908,000
  Allowance for doubtful accounts      1,819,000       1,616,000
  Inventory valuation reserve          2,271,000       1,233,000
  Foreign                              1,867,000       1,048,000
  Other                                  387,000         595,000
- ------------------------------------------------------------------
                                      11,045,000       9,097,000
Less valuation allowance              (1,867,000)     (1,048,000)
- ------------------------------------------------------------------
Total net deferred tax assets          9,178,000       8,049,000
Deferred tax liabilities:
  Depreciation expense                   484,000         865,000
  Software amortization               11,555,000      11,324,000
  Goodwill                             3,444,000       1,782,000
  Available for sale securities        7,132,000            --
  Other                                  846,000            --
- ------------------------------------------------------------------
Total deferred tax liabilities        23,461,000      13,971,000
- ------------------------------------------------------------------
Net deferred tax liabilities        $ 14,283,000    $  5,922,000
==================================================================



                                       26
<PAGE>   29

NOTE 6
BUSINESS SEGMENT INFORMATION

The Company operates in two business segments: Computer Systems and Industrial
Electronics. These reportable business segments are managed separately based on
the product and market differences.

    Computer Systems products include mid-range computer systems and high-end
platforms, personal computers, display terminals and networking products.

    Industrial Electronics products include semiconductors, and interconnect,
passive and electromechanical products.

    The Company evaluates performance and allocates resources based on return on
capital and profitable growth. Specifically, the Company measures segment profit
or loss based on operating profit. The accounting policies of the reportable
segments are the same as those described in the summary of significant
accounting policies. Corporate assets and capital expenditures include costs of
certain centralized functions not directly attributable to the individual
segments. Geographic sales are recognized by shipping destination.

<TABLE>
<CAPTION>
(in thousands)                                     2000         1999         1998
- ------------------------------------------------------------------------------------
<S>                                            <C>          <C>          <C>
SALES
  Computer Systems                             $1,215,117   $1,125,383   $  669,604
  Industrial Electronics                        1,335,568    1,133,700    1,015,661
- ------------------------------------------------------------------------------------
     Total Sales                               $2,550,685   $2,259,083   $1,685,265
OPERATING PROFIT
  Computer Systems                             $   37,238   $   49,810   $   36,158
  Industrial Electronics                           64,216       35,111       36,792
- ------------------------------------------------------------------------------------
     Total Operating Profit                    $  101,454   $   84,921   $   72,950
RECONCILIATION TO INCOME BEFORE INCOME TAXES
  Other Income                                 $    1,845   $     --     $     --
  Interest expense                                 26,074       24,253       20,717
- ------------------------------------------------------------------------------------
  Income Before Income Taxes                   $   77,225   $   60,668   $   52,233
IDENTIFIABLE ASSETS
  Computer Systems                             $  541,926   $  522,959   $  496,563
  Industrial Electronics                          519,779      395,175      438,390
  Corporate                                        50,511       26,335       22,550
- ------------------------------------------------------------------------------------
     Total Assets                              $1,112,216   $  944,469   $  957,503
CAPITAL EXPENDITURES
  Computer Systems                             $   21,626   $   10,801   $    6,277
  Industrial Electronics                           14,154        7,551       15,456
  Corporate                                           250        3,785       22,550
- ------------------------------------------------------------------------------------
     Total Capital Expenditures                $   36,030   $   22,137   $   44,283
DEPRECIATION AND AMORTIZATION EXPENSE
  Computer Systems                             $   13,430   $   11,530   $    4,792
  Industrial Electronics                           12,913       11,460       10,189
- ------------------------------------------------------------------------------------
     Total Depreciation and Amortization       $   26,343   $   22,990   $   14,981
GEOGRAPHIC AREAS
  Net sales
     United Sates                              $2,381,540   $2,107,099   $1,574,006
     Foreign                                      169,145      151,984      111,259
- ------------------------------------------------------------------------------------
       Total                                   $2,550,685   $2,259,083   $1,685,265
LONG-LIVED ASSETS
  United States                                $  118,973   $   97,931   $   94,368
  Foreign                                          41,009       14,888        7,617
- ------------------------------------------------------------------------------------
     Total                                     $  159,982   $  112,819   $  101,985
====================================================================================
</TABLE>



                                       27
<PAGE>   30

NOTE 7
MANDATORILY REDEEMABLE CONVERTIBLE TRUST
PREFERRED SECURITIES

In March 1998 and April 1998, Pioneer-Standard Financial Trust (the "trust")
issued $143.7 million of 6 3/4 percent Mandatorily Redeemable Convertible Trust
Preferred Securities (the "trust preferred securities"). Pioneer-Standard
Financial Trust, a statutory business trust, is a wholly owned consolidated
subsidiary of the Company, with its sole asset being $148.2 million aggregate
principal amount of 6 3/4 percent Junior Convertible Subordinated Debentures
due March 31, 2028 of Pioneer-Standard  Electronics, Inc. (the "Trust
Debenture").

    The trust preferred securities are non-voting (except in limited
circumstances), pay quarterly distributions at an annual rate of 6 3/4 percent,
carry a liquidation value of $50 per share and are convertible into the
Company's Common Shares at any time prior to the close of business on March 31,
2028, at the option of the holder. The trust preferred securities are
convertible into Common Shares at the rate of 3.1746 per Common Share for each
trust preferred security (equivalent to a conversion price of $15.75 per Common
Share). The Company has executed a guarantee with regard to the trust preferred
securities. The guarantee, when taken together with the Company's obligations
under the trust debenture, the indenture pursuant to which the trust debenture
was issued and the applicable trust document, provides a full and unconditional
guarantee of the trust's obligations under the trust preferred securities.

    After March 31, 2002, the trust preferred securities are redeemable, at the
option of the Company, for a redemption price of 104.05 percent of par reduced
annually by .675 percent to a minimum of $50 per trust preferred security. The
trust preferred securities are subject to mandatory redemption on March 31,
2028, at a redemption price of $50 per trust preferred security.

    Pioneer-Standard may cause the trust to delay payment of distributions on
the trust preferred securities for 20 consecutive quarters. During such deferral
periods, distributions, to which holders of the trust preferred securities are
entitled, will compound quarterly, and the Company may not declare or pay any
dividends on its Common Shares.

NOTE 8
SHAREHOLDERS' EQUITY

The Company has a Share Subscription Agreement and Trust (the "Trust") with
Wachovia Bank of North Carolina, N.A., as Trustee, whereby the Trustee
subscribed for 5,000,000 Common Shares of the Company, which will be paid for
over the 15-year term of the Trust. The proceeds from the sale or direct use of
the Common Shares over the life of the Trust are used to fund Company
obligations under various compensation and benefit plans. For financial
reporting purposes, the Trust is consolidated with the Company. The shares
subscribed for by the Trust are recorded in the contra equity account,"Unearned
Employee Benefits," and adjusted to market value at each reporting period, with
an offsetting adjustment to "Capital in Excess of Stated Value." There have been
943,798 shares released from the Trust as of March 31, 2000. The following
details the fair market value of the 4,056,202 Common Shares subscribed for by
the Trust, reflected in shareholders' equity at March 31, 2000:



Common Shares at stated value
  (4,056,202 @ $.30)                             $  1,217,000
Capital in excess of stated value
  (4,056,202 shares)                               62,668,000
Unearned employee benefits
  (4,056,202 shares @ $15.75 fair market value)   (63,885,000)
- --------------------------------------------------------------
Net effect on shareholders' equity               $        --
==============================================================

    During fiscal 2000, restricted stock awards for 723,798 shares of the
Company's common stock were granted at a market value of $13.50 per share to
certain officers under the 1999 Restricted Stock Plan. All eligible shares under
this plan have been granted. Unvested shares are restricted as to disposition
and subject to forfeiture under certain circumstances. The cost of these awards,
determined as the market value of the shares at the date of grant, is being
amortized over the restriction periods. In fiscal 2000, $2,244,000 was charged
to expense for these restricted stock awards.

    On April 27, 1999, the Company's Board of Directors approved a new
Shareholder Rights Plan, which became effective upon expiration of the existing
plan on May 10, 1999. A dividend of one Right per Common Share was distributed
to shareholders of record as of May 10, 1999. Each Right, upon the occurrence of
certain events, entitles the holder to buy from the Company one-tenth of a
Common Share at a price of $4.00, or $40.00 per whole share, subject to
adjustment. The Rights may be exercised only if a person or group acquires 20
percent or more of the Company's Common Shares, or announces a tender offer for
at least 20 percent of the Company's Common Shares. Each Right will entitle its
holder (other than such person or members of such group) to purchase, at the
Right's then-current exercise price, a number of the Company's Common Shares
having a market value of twice the Right's then-exercise price. The Rights trade
with the Company's Common Shares until the Rights become exercisable.

    If the Company is acquired in a merger or other business combination
transaction, each Right will entitle its holder to purchase, at the Right's
then-exercise price, a number of the acquiring company's common shares (or other
securities) having a market value at the time of twice the Right's then-current
exercise price. Prior to the acquisition by a person or group of beneficial
ownership of 20 percent or more of the Company's Common Shares, the Rights are
redeemable for $.001 per Right at the option of the Board of Directors. The
Rights will expire May 10, 2009.



                                       28
<PAGE>   31

NOTE 9
EARNINGS PER SHARE
<TABLE>
<CAPTION>
                                                                                      For the years ended March 31
                                                                       2000                    1999               1998
- ----------------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>                     <C>                <C>
Basic
  Net income                                                        $40,145,000             $30,809,000        $30,497,000
  Weighted average shares outstanding                                26,409,156              26,350,690         26,204,520
  Basic earnings per share                                                $1.52                   $1.17              $1.16
============================================================================================================================
Diluted
  Net income                                                        $40,145,000             $30,809,000        $30,497,000
  Add back:
     Distributions on mandatorily redeemable convertible
       trust preferred securities, net of tax                         5,870,000               5,841,000            112,000
- ----------------------------------------------------------------------------------------------------------------------------
     Net income for computation of diluted earnings per share       $46,015,000             $36,650,000        $30,609,000
- ----------------------------------------------------------------------------------------------------------------------------
  Weighted average shares outstanding                                26,409,156              26,350,690         26,204,520
  Effect of diluted securities:
     Common share equivalents                                           642,167                 243,485            570,863
     Common shares issuable upon conversion of mandatorily
       redeemable convertible trust preferred securities              9,126,984               9,117,199            173,950
- ----------------------------------------------------------------------------------------------------------------------------
  Diluted weighted average shares outstanding                        36,178,307              35,711,374         26,949,333
  Diluted earnings per share                                              $1.27                   $1.03              $1.14
============================================================================================================================
</TABLE>

    Due to the application of the treasury stock method, shares subscribed for
by the "Trust," which is more fully described in Note 8 to the consolidated
financial statements, have no effect on earnings per share until they are
released from Trust.

NOTE 10
STOCK OPTIONS

The Company has stock option plans which provide for the granting of options to
employees and directors to purchase its Common Shares. These plans provide for
nonqualified or incentive stock options.

    Options are granted at the fair market value of the Company's Common
Shares on the date of grant and expire 10 years from date of grant. The Company
makes no recognition of the options in the financial statements until they are
exercised. Pro forma disclosures are provided for 2000, 1999 and 1998 as if the
Company adopted the cost recognition requirements under Financial Accounting
Standard No.123 ("SFAS 123") - "Accounting for Stock-Based Compensation."

    Transactions involving the stock option plans are summarized as follows:

                                           Number   Average option
                                         of shares  price per share
- -------------------------------------------------------------------
Outstanding at March 31, 1997            1,482,986    $    9.24
  Exercised                                (94,009)   $    8.13
  Granted                                  266,800    $   12.43
  Forfeited                                (57,855)   $   13.74
                                        ----------
Outstanding at March 31, 1998            1,597,922    $    9.68
  Exercised                                 (6,187)   $    6.11
  Granted                                1,244,500    $   10.36
  Forfeited                                (75,024)   $   12.89
                                        ----------
Outstanding at March 31, 1999            2,761,211    $    9.91
  Exercised                               (215,010)   $    5.81
  Granted                                  142,500    $    9.39
  Forfeited                                (30,600)   $   10.89
                                        ----------
Outstanding at March 31, 2000            2,658,101    $   10.20
                                        ==========
Exercisable at March 31, 2000            1,394,398    $   10.18
Available for grant at March 31, 2000      620,152



                                       29
<PAGE>   32

    Options Outstanding and Exercisable by Price Range as of March 31, 2000:

                         Options Outstanding
- ----------------------------------------------------------------
                                     Weighted-
                                      average
                    Outstanding      remaining      Weighted-
   Range of            as of        contractual      average
exercise prices     3/31/2000          life       exercise price
- ----------------------------------------------------------------
$ 3.00 - $ 5.50         62,100          1.1          $ 4.52
$ 5.50 - $ 8.00        547,944          4.0          $ 6.26
$ 8.00 - $10.50        657,500          8.8          $ 8.75
$10.50 - $13.00      1,139,057          6.6          $12.22
$13.00 - $15.50        251,500          6.7          $14.81
================================================================
                     2,658,101          6.5          $10.20

                          Options Exercisable
- ----------------------------------------------------------------
                         Exercisable
    Range of                as of             Weighted-average
exercise prices           3/31/2000            exercise price
- ----------------------------------------------------------------
$ 3.00 - $ 5.50             62,100                 $ 4.52
$ 5.50 - $ 8.00            375,144                 $ 6.11
$ 8.00 - $10.50            174,866                 $ 8.75
$10.50 - $13.00            610,654                 $12.24
$13.00 - $15.50            171,634                 $15.28
================================================================
                         1,394,398                 $10.18

    The fair market value of each option granted during 2000, 1999, and 1998 was
estimated on the date of grant using the Black-Scholes option-pricing model with
the following assumptions:

                               2000         1999         1998
- ----------------------------------------------------------------
Dividend yield                   1.0%          1.0%          1.0%
Expected volatility             46.6%         39.0%         33.1%
Risk-free interest rate         6.25%         5.25%         5.60%
Expected life               7.5 years     8.2 years     7.3 years

    The weighted average fair value of options granted during 2000, 1999, and
1998 was $5.05, $5.00 and $5.29, respectively.

    If compensation expense had been recognized for the 2000, 1999 and 1998
grants for stock-based compensation plans in accordance with provisions of SFAS
123, the Company would have recorded net income and diluted earnings per share
of $37,542,000 and $1.20, respectively, in 2000; and $28,457,000 and $.96,
respectively, in 1999; and $29,851,000 and $1.11, respectively, in 1998.

    The impact of applying SFAS 123 in this pro forma disclosure is not
indicative of future amounts. Additional grants in future years are anticipated.

NOTE 11
FINANCIAL INSTRUMENTS AND ESTIMATED FAIR VALUES

The carrying amounts and estimated fair values of the Company's financial
instruments are as follows:

<TABLE>
<CAPTION>
                                                 2000                          1999
- ------------------------------------------------------------------------------------------------
                                   Carrying amount   Fair value  Carrying amount   Fair value
- ------------------------------------------------------------------------------------------------
<S>                                  <C>            <C>            <C>            <C>
Cash and cash equivalents            $ 34,253,000   $ 34,253,000   $ 28,898,000   $ 28,898,000
Note payable                           26,086,000     26,086,000      9,674,000      9,674,000
Long-term debt:
  8.5% Senior Notes                   150,000,000    143,250,000    150,000,000    151,500,000
  9.79% Senior Notes                    2,840,000      2,875,000      5,700,000      5,877,000
  Revolving credit borrowings         170,000,000    170,000,000    160,000,000    160,000,000
Interest rate swaps - asset                  --        2,153,000           --          227,948
Foreign exchange contracts              2,700,000      2,700,000      1,200,000      1,200,000
Mandatorily redeemable convertible
  trust preferred securities          143,750,000    163,156,000    143,750,000    100,625,000
</TABLE>

    The fair value of the 9.79 percent Senior Notes is estimated using rates
currently available for securities with similar terms and remaining maturities.
The fair value of the interest rate swaps and foreign exchange contracts is the
amount at which they could be settled, based on market estimates. No collateral
is held in relationship to the interest rate swaps or foreign exchange
contracts. The fair value of the 8.5 percent Senior Notes and the Mandatorily
Redeemable Convertible Trust Preferred Securities is based on quoted market
prices.



                                       30
<PAGE>   33

NOTE 12
OPERATING WORKING CAPITAL CHANGES AND SUPPLEMENTAL INFORMATION FOR THE
STATEMENTS OF CASH FLOWS

The components of the changes in operating working capital are:

<TABLE>
<CAPTION>
                                                              2000             1999             1998
- ----------------------------------------------------------------------------------------------------------
<S>                                                     <C>              <C>              <C>
Accounts receivable                                     $ (83,107,000)   $ (19,862,000)   $ (29,921,000)
Merchandise inventory                                     (33,498,000)      34,738,000      (78,450,000)
Prepaid expenses                                             (393,000)       3,324,000        2,381,000
Accounts payable                                           84,216,000      (41,462,000)      (7,908,000)
Income taxes                                                 (543,000)         (59,000)        (442,000)
Accrued salaries, wages and commissions                     4,804,000          741,000       (3,618,000)
Other accrued liabilities                                  (5,117,000)     (10,530,000)       2,807,000
- ----------------------------------------------------------------------------------------------------------
Increase in operating working capital                   $ (33,638,000)   $ (33,110,000)   $(115,151,000)
==========================================================================================================

Supplemental cash flow information:
                                                             2000             1999             1998
- ----------------------------------------------------------------------------------------------------------
Cash paid or received during the year for:
  Interest                                              $  26,013,000    $  23,675,000    $  20,942,000
  Income taxes                                             27,636,000       16,472,000       18,001,000
  Distributions on mandatorily redeemable
     convertible trust preferred securities                 9,703,000        9,886,000             --
- ----------------------------------------------------------------------------------------------------------
Non-cash assets and liabilities of business acquired:
  Working capital                                                --               --      $  23,456,000
  Intangible assets                                              --               --        116,758,000
  Other assets                                                   --               --          2,912,000
  Debt assumed and other                                         --               --        (19,873,000)
==========================================================================================================
</TABLE>

NOTE 13
EMPLOYEE RETIREMENT PLANS

The Company maintains various profit-sharing and thrift plans for all employees
meeting certain service requirements. Generally, the plans allow eligible
employees to con- tribute a portion of their compensation, with the Company
matching a percentage thereof. The Company may also make contributions each year
for the benefit of all eligible employees under the plans. Total profit sharing
and Company matching contributions were $4,875,000, $3,742,000 and $3,541,000
for 2000, 1999 and 1998, respectively.

NOTE 14
CONTINGENCIES

The Company is the subject of various threatened or pending legal actions and
contingencies in the normal course of conducting its business. The Company
provides for cost related to these matters when a loss is probable and the
amount is reasonably estimable. The effect of the outcome of these matters on
the Company's future results of operations and liquidity cannot be predicted
because any such effect depends on future results of operations and the amount
or timing of the resolution of such matters. While it is not possible to predict
with certainty, management believes that the ultimate resolution of such matters
will not have a material adverse effect on the consolidated financial position
or results of operations of the Company.



                                       31
<PAGE>   34
REPORT OF INDEPENDENT AUDITORS



Shareholders and the Board of Directors
Pioneer-Standard Electronics, Inc.

We have audited the accompanying consolidated balance sheets of Pioneer-Standard
Electronics, Inc. as of March 31, 2000 and 1999, and the related consolidated
statements of income, shareholders' equity and cash flows for each of the three
years in the period ended March 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of
Pioneer-Standard Electronics, Inc. at March 31, 2000 and 1999, and the
consolidated results of its operations and its cash flows for each of the
three years in the period ended March 31, 2000, in conformity with accounting
principles generally accepted in the United States.

/s/ Ernst and Young LLP

Cleveland, Ohio
May 8, 2000

                                       32
<PAGE>   35

QUARTERLY FINANCIAL DATA
(Unaudited)

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Fiscal year                  First            Second             Third          Fourth
ended March 31              quarter          quarter(a)         quarter         quarter           Year
- ------------------------------------------------------------------------------------------------------------
<S>                     <C>              <C>              <C>              <C>              <C>
2000
Net sales               $  575,973,000   $  631,322,000   $  668,342,000   $  675,048,000   $2,550,685,000
Gross profit                89,274,000       96,218,000      102,725,000      107,536,000      395,753,000
Net income                   7,709,000       10,298,000       10,806,000       11,332,000       40,145,000
Net income per share:
  Basic                            .29              .39              .41              .43             1.52
  Diluted                          .26              .32              .34              .35             1.27
============================================================================================================

1999
Net sales               $  544,327,000   $  559,501,000   $  595,985,000   $  559,270,000   $2,259,083,000
Gross profit                86,470,000       85,477,000       92,477,000       88,002,000      352,426,000
Net income                   5,579,000        6,339,000        9,433,000        9,458,000       30,809,000
Net income per share:
  Basic                            .21              .24              .36              .36             1.17
  Diluted                          .20              .22              .30              .31             1.03
============================================================================================================
</TABLE>

(a)Included in the results of the second quarter of fiscal 2000 was a gain of
$1.8 million ($1.1 million after tax, or $.03 cents per share -- diluted) for
the disposal of assets no longer required in the business.

DIVIDEND INFORMATION
AND PRICE RANGE OF COMMON SHARES

- ----------------------------------------------------------------------
Fiscal year        First     Second      Third     Fourth
ended March 31    quarter    quarter    quarter    quarter     Year
- ----------------------------------------------------------------------
2000
High             $  12.56   $  15.00   $  15.38   $  18.75   $  18.75
Low                  6.50      11.50      11.50      13.13       6.50
Close               12.00      14.44      14.44      15.75      15.75
Dividends paid        .03        .03        .03        .03        .12
======================================================================

1999
High             $  13.19   $  10.13   $  11.38   $  10.25   $  13.19
Low                  9.13       6.06       5.63       6.25       5.63
Close                9.63       6.31       9.38       6.56       6.56
Dividends paid        .03        .03        .03        .03        .12
======================================================================

    As of May 1, 2000, there were 31,480,803 Common Shares (including 4,056,202
subscribed Common Shares - see Note 8) of Pioneer-Standard Electronics, Inc.
outstanding, and there were 2,896 shareholders of record.

    The market price of Pioneer-Standard Electronics, Inc. Common Shares at the
close of business May 1, 2000, was $15.69.

See Note 3 for information regarding dividend restrictions.



                                       33
<PAGE>   36

FINANCIAL REVIEW
FIVE-YEAR SUMMARY OF OPERATIONS
<TABLE>
<CAPTION>
                                                                   (Dollars in thousands except per share amounts)

For the years ended March 31                              2000            1999           1998           1997           1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>            <C>            <C>            <C>            <C>
Combined sales
(Pioneer-Standard Electronics, Inc. and
  Pioneer-Standard of Maryland, Inc.)                  $  2,550,685   $  2,259,083   $  1,685,265   $  1,508,709   $  1,325,047
Pioneer-Standard Electronics, Inc.
  Net sales                                               2,550,685      2,259,083      1,685,265      1,508,709      1,105,281
  Interest expense                                           26,074         24,253         20,717         17,066          8,136
  Income before income taxes and equity in
    earnings of Pioneer-Standard of Maryland, Inc.           77,225         60,668         52,233         40,321         43,812
  Equity in earnings (loss) of
    Pioneer-Standard of Maryland, Inc.                         --             --             --             --             (173)
  Income taxes                                               31,210         24,018         21,624         17,067         18,387
  Net income                                                 40,145         30,809         30,497         23,254         25,252
- ---------------------------------------------------------------------------------------------------------------------------------
Year-end position
  Accounts receivable                                       407,309        323,461        303,599        209,086        189,296
  Inventory                                                 348,120        314,362        349,100        243,940        238,370
  Working capital                                           501,533        476,371        461,449        298,535        224,840
  Net property and equipment                                105,897         90,957         87,727         52,594         48,679
  Total assets                                            1,112,216        944,469        957,503        592,513        559,110
  Long-term debt                                            320,205        313,240        336,234        173,587        164,447
  Shareholders' equity                                      324,065        271,503        244,996        213,979        150,693
  Weighted shares outstanding
    Basic                                                26,409,156     26,350,690     26,204,520     22,731,951     22,436,003
    Diluted                                              36,178,307     35,711,374     26,949,333     23,235,870     23,127,486
  Average number of employees                                 2,457          2,568          2,199          2,042          1,647
- ---------------------------------------------------------------------------------------------------------------------------------
Per share data
  Basic net income per share                                   1.52           1.17           1.16           1.02           1.13
  Diluted net income per share                                 1.27           1.03           1.14           1.00           1.09
  Cash dividends paid per share                                 .12            .12            .12            .12           .106
  Shareholders' equity per share                              12.20          10.30           9.30           8.22           6.70
  Price range of common shares
    High                                                      18.75          13.19          18.25          16.50          19.25
    Low                                                        6.50           5.63          11.38          10.25          10.75
- ---------------------------------------------------------------------------------------------------------------------------------
Measurement data
  Gross margin percent of sales                                15.5           15.6           17.7           17.2           18.3
  Net income percent of sales                                   1.6            1.4            1.8            1.5            2.3
  Net income percent of average shareholders' equity           13.6           11.9           13.3           14.2           18.2
  Sales per employee                                          1,038            879            766            739            671
  Accounts receivable days
    outstanding at year end                                      44             44             44             47             45
  Turns on annual average inventory                             6.1            5.5            4.4            5.2            5.4
  Interest bearing debt percent of equity plus debt
    (including convertible trust preferred
    securities as equity)                                        43             44             48             48             56
</TABLE>

The Company acquired the remaining 50 percent of the common stock of
Pioneer-Standard of Maryland, Inc. on November 30, 1995.
The consolidated statements include the operating results of Maryland from the
date of acquisition. Prior to the acquisition, the Company accounted for its
investment in Maryland under the equity method of accounting.



                                       34
<PAGE>   37

CORPORATE DIRECTORY

DIRECTORS

James L. Bayman (1)
Chairman and Chief Executive Officer
of the Company

Charles F. Christ (3)
Retired Vice President and General
Manager of Components Division,
Digital Equipment Corporation
(computer and office equipment)

Thomas A. Commes (2)
Retired President and
Chief Operating Officer,
Sherwin-Williams Company
(coatings and related products)

Victor Gelb (1, 2, 3)
President, Victor Gelb, Inc.
(industrial fibers)

Keith M. Kolerus
Consultant
Retired Chairman and President,
National Semiconductor - Japan
Retired Vice President,
National Semiconductor
(semiconductors and related devices)

Arthur Rhein
President and Chief Operating
Officer of the Company

Edwin Z. Singer (1,2,3)
Chairman of the Board,
Sandusco, Inc.
(wholesale merchandising, real estate)

Thomas C. Sullivan (1, 3)
Chairman of the Board and
Chief Executive Officer, RPM, Inc.
(specialty coatings and membranes)

Karl E. Ware (2)
Chairman and
Chief Executive Officer,
Ware Industries, Inc.
(metal wire forms and steel components)

CORPORATE OFFICERS

James L. Bayman
Chairman and Chief Executive Officer

Steven M. Billick
Senior Vice President and
Chief Financial Officer

Arthur Rhein
President and Chief Operating Officer

Lawrence N. Schultz
Secretary

Kathryn K. Vanderwist
General Counsel and
Assistant Secretary

CORPORATE OFFICES

Pioneer-Standard Electronics, Inc.
6065 Parkland Blvd.
Cleveland, Ohio 44124
Phone: (440) 720-8500

LEGAL COUNSEL

Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114

INDEPENDENT AUDITORS

Ernst & Young LLP
1300 Huntington Building
Cleveland, Ohio 44115


(1) Executive Committee
(2) Audit Committee
(3) Compensation Committee



                                       35
<PAGE>   38

SHAREHOLDER INFORMATION

Transfer Agent and Registrar
National City Bank
Corporate Trust Operations
P.O. Box 92301
Cleveland, Ohio 44139-0900
800-622-6757

COMMON SHARES

Nasdaq Symbol: PIOS
Quoted in the National
Market System

TRUSTEE 8.5 PERCENT SENIOR NOTES

Firstar
425 Walnut Street
P.O. Box 1118
Cincinnati, Ohio 45201-1118

DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN

The plan allows for full or partial dividend reinvestment, and additional
monthly cash investment up to $5,000 per month, in Pioneer-Standard Common
Shares without brokerage commissions or service charges on stock purchases. If
you are interested in joining the Plan and need an authorization form and/or
more background information, please call National City Bank, Corporate Trust
Operations at 800-622-6757.

FORM 10-K

A copy of the Company's Form 10-K annual report, which is filed with the
Securities and Exchange Commission, may be obtained by writing Investor
Relations, Pioneer-Standard Electron- ics, Inc., 6065 Parkland Blvd., Cleve-
land, Ohio 44124.

ANNUAL MEETING

Shareholders and other interested persons are cordially invited to attend the
annual meeting of shareholders at 11 a.m. July 25, 2000, at Pioneer-Standard
Electronics, Inc. Computer Systems Division, 6675 Parkland Boulevard, Solon,
Ohio 44139.

AFFIRMATIVE ACTION

Policy Pioneer-Standard Electronics, Inc. is an equal opportunity and
affirmative action employer committed to a policy of equal employment
opportunity for all persons, regardless of race, color, sex, religion, national
origin, ancestry, age, marital status, disability or veteran    status.

WORLD WIDE WEB SITE

www.pioneerstandard.com



                                       36
<PAGE>   39
Design by Dix & Eaton, Inc.
<PAGE>   40

PIONEER-STANDARD ELECTRONICS, INC.

6065 PARKLAND BLVD.  CLEVELAND, OHIO 44124  TEL 440.720.8500  FAX 440.720.8501
WWW.PIONEERSTANDARD.COM

[PHOTOS]
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>8
<FILENAME>ex21.txt
<DESCRIPTION>EXHIBIT 21
<TEXT>

<PAGE>   1
                                                                     Exhibit 21


               SUBSIDIARIES OF PIONEER-STANDARD ELECTRONICS, INC.




                                                  State or jurisdiction of
Subsidiaries of the Company                       organization or incorporation
- ---------------------------                       -----------------------------

Pioneer-Standard of Maryland, Inc.                           Maryland
Pioneer-Standard Canada Inc.                                 Ontario
Pioneer-Standard FSC, Inc.                                   Virgin Islands of
                                                               the United States
Pioneer-Standard Illinois, Inc.                              Delaware
Pioneer-Standard Minnesota, Inc.                             Delaware
Pioneer-Standard Electronics, Ltd.                           Delaware
Dickens Data Systems, Inc.                                   Georgia
The Dickens Services Group, a
  Pioneer-Standard Company, LLC                              Delaware


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>9
<FILENAME>ex23.txt
<DESCRIPTION>EXHIBIT 23
<TEXT>

<PAGE>   1

                                                                      Exhibit 23



                         CONSENT OF INDEPENDENT AUDITORS


We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Pioneer-Standard Electronics, Inc. of our report dated May 8, 2000 included
in the 2000 Annual Report to Shareholders of Pioneer-Standard Electronics, Inc.

We also consent to the incorporation by reference in the Registration Statements
(Forms S-3 and Forms S-8) listed below and the related prospectuses of
Pioneer-Standard Electronics, Inc. of our reports dated May 8, 2000 with
respect to the consolidated financial statements and schedule of
Pioneer-Standard Electronics, Inc. incorporated by reference and included in
this Annual Report (Form 10-K) for the year ended March 31, 2000:

     -  Registration of 220,000 Common Shares (Form S-3 No. 333-26697)
     -  Registration of $200,000,000 of Debt Securities and Common Shares
        (Form S-3 No. 333-07665)
     -  Registration of 1,000,000 Common Shares (Form S-3 No. 333-74225)
     -  Registration of 2,875,000 Trust Preferred Securities (Form S-3 No.
        333-57359)
     -  1995 Stock Option Plan for Outside Directors of Pioneer-Standard
        Electronics, Inc. (Form S-8 No. 333-07143)
     -  1991 Incentive Stock Option Plan of Pioneer-Standard Electronics, Inc.
        (Forms S-8 No. 33-46008 and 33-53329)
     -  1982 Incentive Stock Option Plan of Pioneer-Standard Electronics, Inc.
        (Form S-8 No. 33-18790)



/s/ Ernst & Young LLP

Cleveland, Ohio
June 28, 2000
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>10
<FILENAME>ex27.txt
<DESCRIPTION>EXHIBIT 27
<TEXT>

<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION OF THE CONSOLIDATED BALANCE
SHEET AND INCOME STATEMENT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS

<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          MAR-31-2000
<PERIOD-END>                               MAR-31-2000
<EXCHANGE-RATE>                                      1
<CASH>                                          34,253
<SECURITIES>                                         0
<RECEIVABLES>                                  412,990
<ALLOWANCES>                                     5,681
<INVENTORY>                                    348,120
<CURRENT-ASSETS>                               801,731
<PP&E>                                         192,626
<DEPRECIATION>                                  86,729
<TOTAL-ASSETS>                               1,112,216
<CURRENT-LIABILITIES>                          300,198
<BONDS>                                        463,955
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                         9,323
<OTHER-SE>                                     314,742
<TOTAL-LIABILITY-AND-EQUITY>                 1,112,216
<SALES>                                      2,550,685
<TOTAL-REVENUES>                             2,550,685
<CGS>                                        2,154,932
<TOTAL-COSTS>                                2,154,932
<OTHER-EXPENSES>                               294,299
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              26,074
<INCOME-PRETAX>                                 77,225
<INCOME-TAX>                                    31,210
<INCOME-CONTINUING>                             40,145
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    40,145
<EPS-BASIC>                                       1.52
<EPS-DILUTED>                                     1.27


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