FORM 10-K/A
                                 AMENDMENT NO. 1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


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


                           For the fiscal year ended
 ............................................................June 30, 1998

[    ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from _______________________ to _____________________
                         Commission File Number 0-5896

                             JACO ELECTRONICS, INC.
             (Exact name of registrant as specified in its charter)

                                    New York
         (State or other jurisdiction of incorporation or organization)    
                                   11-1978958
                         (I.R.S. Employer Identification No.)


         145 Oser Avenue, Hauppauge, New York                11788  
        (Address of principal executive offices)           (Zip Code)

        Company's telephone number, including area code: (516) 273-5500
        Securities registered pursuant to Section 12(b) of the Act: None

          Securities registered pursuant to Section 12(g) of the Act:

                          COMMON STOCK, $0.10 per share
                                (Title of Class)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
                     Yes: X        No: ______

     Indicate 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 or any amendment to this
Form 10-K. [X]

         The aggregate  market value of Common Stock held by  non-affiliates  of
the Company,  computed by reference to the closing  price on September  23, 1998
was $10,527,674.

         Number of shares  outstanding  of each  class of  Common  Stock,  as of
September  23, 1998:  3,661,221  shares  (excluding  404,500  shares of treasury
stock).

                      DOCUMENTS INCORPORATED BY REFERENCE:

                                      NONE

<PAGE>
                                    PART III

  Item 10.       Directors and Executive Officers of the Company.

                  The  directors and  executive  officers of the Company,  their
ages, their positions and terms of office with the Company are set forth below.




<TABLE>
<CAPTION>


    Name                                    Age                   Title

<S>                                         <C>                  <C>                                                       
   Joel H. Girsky                          59                    Chairman of the Board, President, Treasurer, and Director

   Charles B. Girsky                       64                    Executive Vice President and Director

   Stephen A. Cohen                        61                    Director

   Edward M. Frankel                       60                    Director

   Joseph F. Hickey, Jr.                   40                    Director

   Jeffrey D. Gash                         45                    Vice President, Finance

   Herbert Entenberg                       64                    Vice President of Management and Information
                                                                 Systems, and Secretary
</TABLE>

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


     Joel H.  Girsky has been a Director  and  executive  officer of the Company
since it was founded in 1961.  He also is a director  of Nastech  Pharmaceutical
Company,  Inc.  of  Hauppauge,  New York,  and  Frequency  Electronics,  Inc. of
Uniondale, New York. Messrs. Joel H. Girsky and Charles B. Girsky are brothers.

     Charles B. Girsky  became an executive  officer of the Company on August 2,
1985 and has been its Executive Vice President since January 1988.  Since April,
1984, he has been President of Distel,  Inc., a  wholly-owned  subsidiary of the
Company since August, 1985. He was a founder, Director, and the President of the
Company  from 1961  through  January,  1983,  and was  elected a Director of the
Company  again in 1986.  Messrs.  Charles  B.  Girsky  and  Joel H.  Girsky  are
brothers.

     Stephen A. Cohen has been a  Director  of the  Company  since  1970.  Since
August,  1989,  he has  practiced  law as a member of  Morrison  Cohen  Singer &
Weinstein, LLP, general counsel to the Company.

     Edward M. Frankel  became a Director of the Company in May,  1984. For more
than five years,  he has been  President  of  Vitaquest  International,  Inc., a
distributor  of vitamins  and health and beauty  products,  and its  predecessor
entities.

     Joseph F.  Hickey,  Jr.  became a Director of the Company on May 28,  1997.
Since February 1, 1991, he has been employed by Cleary Gull Reiland and McDevitt
Inc., an investment banking firm located in Milwaukee, Wisconsin. Since 1997, he
has been the managing director at Cleary Gull Reiland and McDevitt Inc.
syndication department.


     Jeffrey D. Gash became Vice President of Finance of the Company in January,
1989,  and was Controller of the Company for more than five years prior thereto.
He has also served in similar capacities with the Company's subsidiaries.

     Herbert   Entenberg  has  served  as  Vice   President  of  Management  and
Information Systems, and Secretary since 1988. Mr. Entenberg oversees management
information  systems  and  operations  of the  Company  and is  responsible  for
developing and implementing the Company's inventory control system.



                                       2
<PAGE>



Item 11.          Executive Compensation.


     The following table sets forth, for the Company's three most recently ended
fiscal years, the  compensation  paid or accrued to the President of the Company
and to the executive  officers of the Company,  other than the President,  whose
aggregate  annual salary and bonus for the  Company's  last fiscal year exceeded
$100,000: 

<TABLE> 
<CAPTION>


                                              SUMMARY COMPENSATION TABLE


                               Annual Compensation Awards Payouts
Name and                                                           Other        
Principal                                                          Annual       
<S>                               <C>            <C>         <C>             <C>
Position                         Year      Salary($)    Bonus($) Compensation($)
--------                         ----      ---------    -------- ---------------

Joel H. Girsky,                 1996       325,000        387,000       -       
  Chairman of the Board,        1997       325,000        210,000       -       
  President, and Treasurer(1)   1998       325,000         81,000       -       

Charles B. Girsky,              1996       225,000         96,535       -       
  Executive Vice President(3)   1997       225,000         73,475       -       
                                1998       225,000         41,000       -       

Jeffrey D. Gash,                1996        96,000         42,595       -       
  Vice President, Finance(4)    1997       104,808         25,000       -       
                                1998       125,000         33,100       -       

Herbert Entenberg               1996       102,560         20,188       -       
  Vice President of             1997       102,560         10,481       -       
  Management and                1998       109,920         30,694       -       
  Information Systems,
  and Secretary



                                                         Long-Term Compensation                    
                                                       Awards                        Payouts
Name and                                     Restricted                                      All Other
Principal                                     Stock            Options/       LTIP         Compensation
<S>                              <C>               <C>              <C>             <C>       <C>         
Position                         Year        Awards($)         SARs (#)      Payouts($)       ($)(2)      
--------                         ----        ---------         --------     --------------- ---------  

Joel H. Girsky,                 1996             --                 --               --         84,301
  Chairman of the Board,        1997          150,000**           15,399             --         73,924
  President, and Treasurer(1)   1998             --                 --               --         77,196

Charles B. Girsky,              1996             --               15,000             --          5,608
  Executive Vice President(3)   1997          150,000**           25,000             --          4,976
                                1998             --                 --               --          6,719

Jeffrey D. Gash,                1996             --                5,000             --          1,841
  Vice President, Finance(4)    1997           60,000**           10,000             --          2,004
                                1998             --                 --               --          3,920

Herbert Entenberg               1996             --                2,500             --          3,197
  Vice President of             1997           30,000**            5,000             --          3,343
  Management and                1998             --                 --               --          4,926
  Information Systems,
  and Secretary

</TABLE>




                                       3
<PAGE>







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

(1)  Mr. Joel Girsky  entered  into a four-year  employment  agreement  with the
     Company,  effective as of July 1, 1997, to serve as the Company's  Chairman
     and  President.  The  employment  agreement  will  automatically  renew for
     additional one year periods on each anniversary  date, until such time that
     the Company or Mr. Joel Girsky  delivers  written notice to the other party
     not less than 90 days prior to an anniversary date, declining such renewal.
     In the event that a notice of non-renewal is delivered by either party, Mr.
     Girsky's  employment  agreement  shall continue for a period of three years
     following the  anniversary  date which follows  immediately  after the date
     that such notice is delivered.  Pursuant to the agreement,  Mr. Joel Girsky
     received a base salary of $325,000  for the fiscal year ended June 30, 1998
     and shall  receive a base  salary of  $325,000  for each fiscal year ending
     June 30,  thereafter.  In addition,  he is entitled to receive a cash bonus
     equal to four percent (4%) of the  Company's  earnings  before income taxes
     for each fiscal year in which such earnings are in excess of $1,000,000, or
     six percent (6%) of the  Company's  earnings  before  income taxes for such
     fiscal year if such  earnings are in excess of  $2,500,000  up to a maximum
     annual cash bonus of $720,000.  If the  Company's  earnings  before  income
     taxes are in excess of $12,000,000 for any such fiscal year, Mr. Girsky may
     also  receive  common  stock  options of the Company as  negotiated  by Mr.
     Girsky and the Company at such time. Mr. Girsky or his estate,  as the case
     may be,  is  entitled  to  receive a payment  of  $1,500,000  if he dies or
     becomes permanently  disabled during the term of the employment  agreement.
     The death and  disability  benefit  may be  funded  by  insurance  policies
     maintained  by the  Company.  In the  event of Mr.  Girsky's  cessation  of
     employment with the Company,  upon his request, the Company is obligated to
     transfer such policies to Mr. Girsky. Thereafter, the Company would have no
     further  liability  for the payment of such benefit or the premiums on such
     policy. In addition, pursuant to the terms of the employment agreement, Mr.
     Girsky shall  receive  deferred  compensation  which accrues at the rate of
     $50,000 per year, and becomes payable in a lump sum at the later of (i) Mr.
     Girsky's  attainment of age 60 (which event shall occur in Fiscal 1999), or
     (ii) his cessation of employment,  with or without  cause,  at any time. In
     the event of a change in control,  Mr.  Girsky will receive two hundred and
     ninety-nine  percent of the  average of his base salary plus cash bonus for
     the previous five years,  to the extent that such payment does not equal or
     exceed three times Mr. Girsky's base amount, as computed in accordance with
     Section 280G(d)(4) of the Internal Revenue Code of 1986. Additionally, upon
     a change of control, under certain  circumstances,  Mr. Girsky's employment
     agreement may be assigned by the Company or any such successor or surviving
     corporation upon sixty days prior written notice to Mr. Girsky.

(2)  Includes  auto  expenses,  401(k)  matching  contributions  by the Company,
     premiums paid on group term life insurance, taxable portion of split dollar
     life  insurance  policies and deferred  compensation  accrued in connection
     with Mr. Joel Girsky's employment  agreement with the Company, as described
     in  footnote  (1)  above.  Auto  expenses  for  Fiscal  1998 for the  Named
     Executives were as follows:  Mr. Joel Girsky -- $19,247, Mr. Charles Girsky
     -- $3,574, Mr. Gash -- $2,025 and Mr. Entenberg -- $2,154.  401(k) matching
     contributions for Fiscal 1998 for the Named Executives were as follows: Mr.
     Joel Girsky -- $1,000, Mr. Charles Girsky -- $1,039, Mr. Gash -- $1,373 and
     Mr.  Entenberg -- $1,256.  Premiums  paid on group term life  insurance for
     Fiscal 1998 for the Named  Executives  were as follows:  Mr. Joel Girsky --
     $1,350, Mr. Charles Girsky -- $2,106, Mr. Gash -- $522 and Mr. Entenberg --
     $1,516. The taxable portion of split dollar life insurance policies for Mr.
     Joel Girsky was $5,599 for Fiscal 1998.  $50,000 deferred  compensation was
     accrued in Fiscal  1998 in  connection  with Mr. Joel  Girsky's  employment
     agreement with the Company.





                                       4
<PAGE>




(3)  Mr. Charles Girsky entered into a four-year  employment  agreement with the
     Company,  effective as of July 1, 1998, to serve as the Company's Executive
     Vice  President.  The  employment  agreement will  automatically  renew for
     additional one year periods on each anniversary  date, until such time that
     the Company or Mr.  Charles  Girsky  delivers  written  notice to the other
     party not less than 90 days prior to an  anniversary  date,  declining such
     renewal.  In the event that a notice of  non-renewal is delivered by either
     party,  Mr.  Girsky's  employment  agreement shall continue for a period of
     three years following the anniversary date which follows  immediately after
     the date that such  notice is  delivered.  Pursuant to the  agreement,  Mr.
     Girsky will  receive a base  salary of $225,000  for the fiscal year ending
     June 30, 1999,  and shall receive a base salary of $225,000 for each fiscal
     year ending June 30, thereafter.  In addition,  he is entitled to receive a
     cash bonus  equal to two  percent  (2%) of the  Company's  earnings  before
     income  taxes for each fiscal year in which such  earnings are in excess of
     $1,000,000,  or three percent (3%) of the Company's  earnings before income
     taxes for such  fiscal  year if such  earnings  exceed  $2,500,000  up to a
     maximum  annual cash bonus of $360,000.  If the Company's  earnings  before
     income taxes are in excess of  $12,000,000  for any such fiscal  year,  Mr.
     Girsky may  receive  the number of common  stock  options of the Company as
     shall be negotiated by Mr. Girsky and the Company at that time.  Mr. Girsky
     or his  estate,  as the case may be, is  entitled  to  receive a payment of
     $1,000,000  if he dies  during the term of the  employment  agreement.  The
     death benefit may be funded by a life  insurance  policy  maintained by the
     Company.  In the event of Mr.  Girsky's  cessation of  employment  with the
     Company, upon his request, the Company is obligated to transfer such policy
     to Mr. Girsky.  Thereafter, the Company would have no further liability for
     the payment of such benefit or the premiums on such policy. In the event of
     a change in control,  Mr. Girsky will receive two hundred and fifty percent
     of the  average of his base salary  plus cash bonus for the  previous  five
     years, to the extent that such payment does not equal or exceed three times
     Mr. Girsky's base amount, as computed in accordance with Section 280G(d)(4)
     of the  Internal  Revenue  Code of 1986.  Additionally,  upon a  change  of
     control, under certain circumstances, Mr. Girsky's employment agreement may
     be assigned by the Company or any such  successor or surviving  corporation
     upon sixty days prior written notice to Mr. Girsky.

(4)  Mr. Jeffrey D. Gash entered into a four-year  employment agreement with the
     Company,  effective  as of July 1,  1998,  to serve as the  Company's  Vice
     President of Finance. The employment agreement will automatically renew for
     additional one year periods on each anniversary  date, until such time that
     the Company or Mr. Gash delivers written notice to the other party not less
     than 90 days prior to an anniversary date,  declining such renewal.  In the
     event that a notice of non-renewal is delivered by either party, Mr. Gash's
     employment  agreement  shall continue for a period of three years following
     the  anniversary  date which follows  immediately  after the date that such
     notice is  delivered.  Pursuant to the  agreement,  Mr. Gash will receive a
     base salary of $125,000 for the fiscal year ending June 30, 1999, and shall
     receive a base  salary of  $125,000  for each  fiscal  year ending June 30,
     thereafter.  In  addition,  he is  entitled  to  receive  a cash  bonus  as
     determined by the Board of Directors and the President of the Company.  Mr.
     Gash or his estate, as the case may be, is entitled to receive a payment of
     $750,000 if he dies during the term of the employment agreement.  The death
     benefit may be funded by a life insurance policy maintained by the Company.
     In the event of Mr. Gash's  cessation of employment with the Company,  upon
     his request,  the Company is obligated to transfer such policy to Mr. Gash.
     Thereafter,  the Company would have no further liability for the payment of
     such benefit or the  premiums on such  policy.  In the event of a change in
     control,  Mr. Gash will  receive two hundred  percent of the average of his
     base salary plus cash bonus for the previous five years, to the extent that
     such payment does not equal or exceed three times Mr Gash's base amount, as
     computed in accordance with Section 280G(d)(4) of the Internal Revenue Code
     of  1986.   Additionally,   upon  a  change  of  control,   under   certain
     circumstances,  Mr.  Gash's  employment  agreement  may be  assigned by the
     Company or any such  successor  or  surviving  corporation  upon sixty days
     prior written notice to Mr. Gash.

                                       5
<PAGE>


     ** On June 9, 1997,  the Board of Directors  awarded an aggregate of 65,000
     shares of Common Stock of the Company  under the  Restricted  Stock Plan to
     the Named  Executives  of the Company as follows:  25,000  shares of Common
     Stock to Joel  Girsky,  25,000  shares of Common  Stock to Charles  Girsky,
     10,000  shares of Common  Stock to Jeffrey  Gash and 5,000 shares of Common
     Stock to Herbert  Entenberg.  These  grants were subject to the approval of
     the Restricted Stock Plan by the Company's shareholders, which approval was
     received  on December 9, 1997.  The awards vest in  one-quarter  increments
     annually.  Accordingly,  as of June 30, 1998, the following portions of the
     aforementioned  awards were vested: 6,250 shares of Common Stock awarded to
     each of Joel  Girsky  and  Charles  Girsky,  2,500  shares of Common  Stock
     awarded to Jeffrey Gash and 1,250 shares of Common Stock awarded to Herbert
     Entenberg.  The value of the aggregate  restricted  stock holdings of these
     individuals  at June 30, 1998 was as follows:  $125,000 for Joel H. Girsky,
     $125,000 for Charles B. Girsky, $50,000 for Jeffrey D. Gash and $25,000 for
     Herbert  Entenberg.  These figures are based upon the fair market value per
     share of the Common Stock at year end,  minus the exercise or base price of
     such awards.  The closing sale price for the  Company's  Common Stock as of
     June 30, 1998 on the NASDAQ National Market System was $6.00.




     The following tables set forth  information  concerning number and value of
unexercised  options  held by  each  of the  persons  described  in the  Summary
Compensation Table on page 3 at the end of Fiscal 1998.



<TABLE>
<CAPTION>



               AGGREGATE OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES

                                                                                                   Value of Unexercised
                              Shares                               Number of Unexercised           In-the-Money
                             Acquired                                 Option/SARs at               Option/SARs at
                                on              Value                   FY-End (#)                          FY-End ($)(1)          
                                                               ----------------------------        --------------------------------
                            Exercise(#)      Realized($)       Exercisable    Unexercisable        Exercisable      Unexercisable
<S>                         <C>                <C>                     <C>              <C>       <C>          <C>           
Joel H. Girsky               --                 --                96,799                  0            92,796       -
Charles B. Girsky            --                 --                40,000                  0             -           -
Jeffrey D. Gash              --                 --                19,033                  0             4,598       -
Herbert Entenberg            --                 --                11,167                  0             4,510       -

</TABLE>

-------------------------------
      (1)     Based on the fair  market  value per share of the Common  Stock at
              year  end,  minus the  exercise  or base  price on  "in-the-money"
              options.  The closing sale price for the Company's Common Stock as
              of June 30, 1998 on the NASDAQ National Market System was $6.00.




                     Compensation of Directors

              Pursuant  to the  Company's  1993 Stock  Option  Plan for  Outside
      Directors (the "Outside  Directors Plan"), the Company's outside directors
      (directors who are not employees of the Company) were each granted options
      on  December  31,  1993 to  purchase  14,667  shares of Common  Stock.  In
      addition, the Outside  Directors'Plan  provided that each outside director
      shall also be granted on each  December 31 subsequent to December 31, 1993
      stock  options to  purchase  2,933  shares of Common  Stock.  All  options
      granted under the Outside Directors' Plan are immediately exercisable, and
      the  exercise  price per share of each  option is equal to the fair market
      value of the shares of Common Stock on the date of grant. No option may be
      granted after January 1, 1998 under the Outside Directors' Plan.



                                       6
<PAGE>


      Employment Contracts and Termination of Employment
      and Change-In-Control Arrangements

              The  Company's  employment  agreements  with Messrs.  Joel Girsky,
      Charles  Girsky and Jeffrey  Gash are  described  in the  footnotes to the
      Summary Compensation Table on page 3 of this Form 10-K/A, Amendment No. 1.



Compensation Committee Interlocks and Insider Participation

        Stephen A.  Cohen,  a Director of the  Company,  is a member of Morrison
Cohen  Singer &  Weinstein,  LLP,  general  counsel to the  Company.  Mr.  Cohen
currently owns 4,798 shares of Common Stock,  currently  exercisable  options to
purchase an additional  26,399 shares of Common Stock and options to purchase an
additional  7,500 shares of Common Stock which become  exercisable  on September
16, 1999.  As of December 9, 1997,  Mr. Cohen ceased  serving as a member of the
Company's Compensation Committee.

     Joseph F. Hickey,  Jr., a Director of the Company is a managing director at
Cleary  Gull  Reiland  and  McDevitt  Inc.  ("Cleary").  Cleary  co-managed  the
Company's  offering  of  Common  Stock  in 1995  and is a  market  maker  of the
Company's  Common Stock. Mr. Hickey currently owns 1,000 shares of Common Stock,
currently exercisable options to purchase an additional 12,933 shares of Commmon
Stock,  and Cleary owns warrants to acquire 17,500 shares of Common Stock. As of
December  9, 1997,  Mr.  Hickey  became a member of the  Company's  Compensation
Committee.


                                       7
<PAGE>



Item 12.         Security Ownership of Certain Beneficial Owners and Management.

     The  following  table sets forth the  number  and  percentage  of shares of
Common  Stock owned as of October 22, 1998 by (i) each  director of the Company,
(ii) all persons who, to the knowledge of the Company, are the beneficial owners
of more than 5% of the  outstanding  shares of Common  Stock,  (iii) each of the
executive  officers,  and  (iv) all of the  Company's  Directors  and  executive
officers,  as a group.  Each person named in the table has sole investment power
and sole  voting  power with  respect  to the  shares of Common  Stock set forth
opposite such person's name, except as otherwise indicated.



<TABLE>
<CAPTION>

                                                                                       Percentage of
                                                         Number of Shares               Common Stock
Name of Beneficial Owner                                Beneficially Owned(1)           Outstanding(2)
-------------------------                              ---------------------         ------------------
   Joel H. Girsky
   President, Treasurer
<S>                                                            <C>                             <C>  
   and Director                                                564,139(3)                      15.0%

   Charles B. Girsky
   Executive Vice President and
   Director                                                    311,774(4)                       8.4%

   Stephen A. Cohen
   Director                                                     31,197(5)                         **

   Edward M. Frankel
   Director                                                      26,39(6)                         **

   Joseph F. Hickey, Jr.                                        31,433(7)                         **
   Director

   Jeffrey D. Gash
   Vice President, Finance                                      29,565(8)                         **

   Herbert Entenberg
   Vice President of Management
   and Information Systems,
   and Secretary                                                16,167(9)                         **

   Heartland Advisors, Inc.
   790 North Milwaukee Street
   Milwaukee, WI 53202                                         641,700(10)                       17.6%

   Advisory Research Inc.
   18 North Stetson Street, Suite 5780
   Two Prudential Plaza
   Chicago, IL 60601                                            278,900(11)                       7.6%


   Goldman Sachs Group, LP
   Goldman, Sachs & Co.
   85 Broad Street
   New York, NY 10004                                           275,300(12)                       7.5%


   Liberty Investment Management, Inc.
   2502 Rocky Point Drive, Suite 500
   Tampa, Fl 33607                                             203,300(13)                         5.6%


   Wellington Management Company, LLP
   75 State Street
   Boston, MA 02109                                            359,000(14)                         9.8%

   All Directors and executive officers
   as a group (7 persons)                                     1,010,674(15)                      25.0%

</TABLE>




                                       8
<PAGE>


--------
**    Less than 1%.

1    Includes  shares of Common Stock issuable  pursuant to options and warrants
     exercisable  within  sixty (60) days from the date  hereof.  Also  includes
     shares of Common Stock awarded under the Restricted Stock Plan.

2    Based upon (i)  3,653,521  shares of Common  Stock  issued and  outstanding
     (excluding  412,200 shares of treasury stock),  plus, if appropriate,  (ii)
     the number of shares of Common Stock  awarded  under the  Restricted  Stock
     Plan,  and/or  (iii) the  number of  shares  of Common  Stock  which may be
     acquired  by the  named  person  or by all  persons  included  in the group
     pursuant to the exercise of options and warrants  exercisable  within sixty
     (60) days from the date hereof.

3    Includes 96,799 shares of Common Stock acquirable  pursuant to the exercise
     of options granted under the Company's 1993  Non-Qualified  Plan and 25,000
     Shares of Common Stock awarded under the  Restricted  Stock Plan.  Does not
     include 100,000 shares of Common Stock acquirable  pursuant to the exercise
     of options  granted under the Company's 1993  Non-Qualified  Plan which are
     not exercisable within sixty (60) days from the date hereof.

4    Includes  243,077  shares of Common Stock owned by the Girsky Family Trust,
     40,000  shares of Common  Stock  acquirable  pursuant  to the  exercise  of
     options  granted under the  Company's  1993  Non-Qualified  Plan and 25,000
     shares of Common Stock awarded under the Restricted Stock Plan.

5    Includes 26,399 shares of Common Stock acquirable  pursuant to the exercise
     of options  granted under the Company's  1993 Stock Option Plan for Outside
     Directors.  Does not  include  7,500  shares  of  Common  Stock  acquirable
     pursuant to the  exercise of  non-qualified  stock  options  granted to Mr.
     Cohen by the  Company,  which are not  exercisable  within  sixty (60) days
     hereof.

6    Includes 26,399 shares of Common Stock acquirable  pursuant to the exercise
     of options  granted under the Company's  1993 Stock Option Plan for Outside
     Directors.  Does not  include  7,500  shares  of  Common  Stock  acquirable
     pursuant to the  exercise of  non-qualified  stock  options  granted to Mr.
     Frankel by the Company,  which are not  exercisable  within sixty (60) days
     hereof.

7    Includes 2,933 shares of Common Stock  acquirable  pursuant to the exercise
     of options  granted under the Company's  1993 Stock Option Plan for Outside
     Directors  and 10,000  shares of Common  Stock  acquirable  pursuant to the
     exercise  of  non-qualified  stock  options  granted  to Mr.  Hickey by the
     Company.  Includes 17,500 shares of Common Stock  acquirable by Cleary Gull
     Reiland  and  McDevitt  Inc.  pursuant  to  warrants  granted  to it by the
     Company.  The reporting person disclaims beneficial ownership of the shares
     of Common Stock acquirable upon the exercise of the warrants, except to the
     extent of his pecuniary interest therein.

8    Includes 19,000 shares of Common Stock acquirable  pursuant to the exercise
     of options granted under the Company's 1993  Non-Qualified  Plan and 10,000
     shares of Common Stock awarded under the Restricted Stock Plan.

9    Consists  of 11,167  shares  of Common  Stock  acquirable  pursuant  to the
     exercise of options  granted  under the  Company's  Non-Qualified  Plan and
     5,000 shares of Common Stock awarded under the Restricted Stock Plan.

10   These  securities  are held in  investment  advisory  accounts of Heartland
     Advisors,  Inc.  Based upon  Amendment No. 3 to Schedule 13G filed with the
     S.E.C. on February 3, 1998.

11   David  B.  Heller,   President  and  controlling  shareholder  of  Advisory
     Research,  Inc.,  shares  power to vote or to  direct  the vote of,  and to
     dispose or direct the  disposition  of these shares.  Based upon a Schedule
     13G filed with the S.E.C. on February 13, 1998.



                                      9
<PAGE>



12   The Goldman Sachs Group, L.P. ("GS Group") is the Parent Holding Company of
     Goldman,  Sachs & Co. ("Goldman  Sachs").  GS Group and Goldman Sachs share
     dispositive  power as to these  shares and share voting power as to 158,800
     of these  shares.  GS Group  and  Goldman  Sachs  each  expressly  disclaim
     beneficial  ownership of the Common Stock beneficially owned by (i) managed
     accounts  and (ii)  certain  investment  limited  partnerships,  of which a
     subsidiary of GS Group or Goldman Sachs is the general  partner or managing
     general partner,  to the extent partnership  interests in such partnerships
     are held by persons other than GS Group, Goldman Sachs or their affiliates.
     Based upon a Schedule 13G filed with the S.E.C. on February 17, 1998.

13   Based upon a Schedule 13G filed with the S.E.C. on July 24, 1997.

14   According  to the  Schedule  13G filed with the SEC on February  10,  1998,
     these securities are owned by clients of Wellington Management Company, LLP
     ("WMC") for which WMC serves as investment advisor.  Those clients have the
     right to receive, or the power to direct the receipt of, dividends from, or
     the proceeds from the sale of, such securities.

15   Includes 250,197 shares of Common Stock acquirable pursuant to the exercise
     of options and warrants and 65,000 shares of Common Stock awarded under the
     Restricted Stock Plan.



                                     




Item 13.          Certain Relationships and Related Transactions.

     During  the  fiscal  year  ended  June  30,  1998,  the  Company   incurred
approximately   $602,000  of  rental   expenses  in  connection  with  its  main
headquarters  and  centralized  inventory  distribution  facility,   located  in
Hauppauge, New York, which was paid to Bemar Realty Company ("Bemar"), the owner
of such premises.  Bemar is a partnership  consisting of Messrs. Joel Girsky and
Charles Girsky, both of whom are officers,  directors and principal shareholders
of the  Company.  The  lease  on the  property,  which  is net of all  expenses,
including taxes,  utilities,  insurance,  maintenance and repairs was renewed on
January 1, 1996 and expires on December  31,  2003.  The Company  believes,  the
current rental rate is at its fair market value.

                                       10
<PAGE>






                                   SIGNATURES

         Pursuant to the  requirements of Section 13 or 15 (d) of the Securities
Exchange  Act ot 1934,  the  Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.







                               JACO ELECTRONICS, INC.

                               By: Jeffrey D. Gash
                               ------------------------------------------------
                               Jeffrey D. Gash Vice President - Finance

Date:    October 28, 1998