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                             JACO ELECTRONICS, INC.

                             2000 STOCK OPTION PLAN

                        (As Amended on December 16, 2004)


1.       Purpose; Types of Awards: Construction

         The purpose of the Jaco Electronics, Inc. 2000 Stock Option Plan (the
"Plan") is to provide incentives to directors, officers, employees, advisers and
consultants of Jaco Electronics, Inc. (the "Company") or any subsidiary of the
Company which now exists or hereafter is organized or acquired by the Company,
to acquire a proprietary interest in the Company, to increase their efforts on
behalf of the Company and to promote the success of the Company's business. The
Plan is intended to permit the Committee (as defined in Section 3 hereof) to
issue options totaling 1,200,000 shares of the Company's common stock to
directors, officers, employees, advisers and consultants. The Committee may
grant options which shall constitute either "nonqualified stock options"
("Nonqualified Stock Options") or "incentive stock options" ("Incentive Stock
Options" or "ISO") within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").

2.       Definitions

         As used in this Plan, the following words and phrases shall have the
meanings indicated:

                  (a) "Board" shall mean the Board of Directors of the Company.

                  (b) "Common Stock" shall mean shares of common stock, par
                       value $.10 per share, of the Company.

                  (c) "Disability" shall mean the Optionee's incapacity due to
physical or mental illness, as a result of which the Optionee shall have been
absent from his duties of employment with the Company on a full-time basis for
the entire period of three (3) consecutive months, and within thirty (30) days
after written notice of termination is given by the Company (which notice may be
given within thirty (30) days before or at any time after the end of such three
month period) shall not have returned to the performance of such duties on a
fulltime basis.

                  (d) "Fair Market Value" per share as of a particular date
shall mean the value determined by the Committee in its discretion; provided,
however, that in the event that there is a public market for the Common Stock,
the fair market value is, if available, (i) the closing price of the Common
Stock as of the date of grant as reported (in descending order of priority) on
(A) a national securities exchange listing the Common Stock, (B) the Nasdaq
Stock Market, (C) a national automated quotation system with daily trading
volume in the Common Stock in excess of 10,000 shares, or (D) a regional
securities exchange listing the Common Stock, or (ii) the average of the closing
bid and asked prices of the Common Stock for the previous five trading days.

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                  (e) "Option" or "Options" shall mean a grant to an Optionee of
an option or options to purchase shares of Common Stock. Options granted by the
Committee pursuant to the Plan shall constitute either Nonqualified Stock
Options or Incentive Stock Options, as determined by the Committee.

                  (f) "Parent Corporation" shall mean any corporation (other
than the Company) in an unbroken chain of corporations ending with the employer
corporation if, at the time of granting an Option, each of the corporations
other than the employer corporation owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

                  (g) "Subsidiary Corporation" shall mean any corporation (other
than the Company) in an unbroken chain of corporations beginning with the
employer corporation if, at the time of granting an Option, each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

                  (h) "Ten Percent Shareholder" shall mean an Optionee who, at
the time an Incentive Stock Option is granted, owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or of its Parent or Subsidiary Corporations.

3.       Administration

                  (a) The Plan shall be administered by a committee (the
"Committee") established by the Board, the composition of which shall at all
times consist of two (2) or more individuals who are each members of the Board.
If no Committee is appointed by the Board, the functions of the Committee shall
be carried out by the Board, provided, however, that if at any time the
Corporation has outstanding a class of equity securities required to be
registered under Section 12 of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), the Corporation may grant, designate or amend any Options
hereunder through a committee consisting solely of two or more persons, each of
whom shall qualify as (i) a "Non-Employee Director", as that term is defined in
subparagraph (b)(3)(i) of Rule 16b-3 ("Rule 16b-3") promulgated under the 1934
Act, and (ii) an "outside director", within the meaning of Section 162(m) of the
Code.

                  (b) The Committee shall choose one of its members as Chairman
and shall hold meetings at such times and places as it shall deem advisable. A
majority of the members of the Committee shall constitute a quorum and any
action may be taken by a majority of those present and voting at any meeting.
Any action may also be taken without the necessity of a meeting by a written
instrument signed by all members of the Committee. The decision of the Committee
as to all questions of interpretation and application of the Plan shall be
final, binding and conclusive on all persons. The Committee shall have the
authority to adopt, amend and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any Option Agreement (as defined in Section 8) in the manner and to
the extent it shall deem expedient to carry the Plan into effect and shall be
the sole and final


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judge of such expediency. No Committee member shall be liable
for any action or determination made in good faith.

                  (c) The Committee shall have the authority in its discretion,
subject to and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the powers and authorities either
specifically granted to it under the Plan or necessary or advisable in the
administration of the Plan, including, without limitation, the authority to
grant Options; to determine the purchase price of the shares of Common Stock
covered by each Option (the "Option Price"); to determine the persons to whom,
and the time or times at which awards shall be granted, (such persons are
referred to herein as "Optionees"); to determine the number of shares to be
covered by each award; to interpret the Plan; to prescribe, amend and rescind
rules and regulations relating to the Plan; to determine the terms and
provisions of the agreements (which need not be identical) entered into in
connection with awards granted under the Plan; to cancel or suspend awards, as
necessary; and to make all other determinations deemed necessary or advisable
for the administration of the Plan. The Committee may delegate to one or more of
its members or to one or more agents such administrative duties as it may deem
advisable. The Committee or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan. All
decisions, determinations and interpretations of the Committee shall be final
and binding on all Optionees.

                  (d) The Board shall fill all vacancies of the Committee,
however caused.

                  (e) No member of the Board or Committee shall be liable for
any action taken or determination made in good faith with respect to the Plan or
any award granted hereunder.

4.       Eligibility

         (a) Awards may be granted to directors, officers, employees, advisers
and consultants of the Company. In determining the persons to whom awards shall
be granted and the number of shares to be covered by each award, the Committee
shall take into account the duties of the respective persons, their present and
potential contributions to the success of the Company and such other factors as
the Committee shall deem relevant in connection with accomplishing the purposes
of the Plan.

         (b) Options designated as ISOs may be granted only to officers and
other employees of the Company or any "subsidiary corporation" as defined in
Section 424 of the Code. Non-Qualified Stock Options may be granted to any
officer, employee, director, adviser, or consultant of the Company or of any
Subsidiary Corporation. Non-Qualified Stock Options may be granted to an
individual in connection with the hiring or engagement of the individual prior
to the date that the individual first performs services for the Company or any
Subsidiary Corporation.

5.       Common Stock Subject to the Plan

         (a) The maximum number of shares of Common Stock reserved for the grant
of Options shall be 1,200,000. Such shares may, in whole or in part, be
authorized but unissued shares or shares that shall have been or may be
reacquired by the Company. No single


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individual may be granted in any one
calendar year options to purchase more than 150,000 shares of Common Stock (as
such number of shares may be adjusted in accordance with the provisions of
Section 9 hereof).

         (b) If any outstanding award under the Plan should, for any reason
expire, be canceled or be terminated, without having been exercised in full, the
shares of Common Stock allocable to the unexercised, canceled or terminated
portion of such award shall (unless the Plan shall have been terminated) become
available for subsequent grants of awards under the Plan.

         (c) Stock issuable upon exercise of an option granted under the Plan
may be subject to such restrictions on transfer, repurchase rights or other
restrictions as shall be determined by the Committee.

6.       Incentive Stock Options

         Options granted pursuant to this Section 6 are intended to constitute
Incentive Stock Options and shall be subject to the following special terms and
conditions, in addition to the general terms and conditions specified in Section
8 hereof.

         (a) Value of Shares. The aggregate Fair Market Value (determined as of
the date that Incentive Stock Options are granted) of the shares of Common Stock
with respect to which Options granted under this Plan and all other option plans
of the Company and any Parent or Subsidiary Corporation that become exercisable
for the first time by an Optionee during any calendar year shall not exceed
$100,000.

         (b) Ten Percent Shareholders. In the case of an Incentive Stock Option
granted to a Ten Percent Shareholder, (i) the Option Price shall not be less
than one hundred ten percent (110%) of the Fair Market Value of the shares of
Common Stock on the date of grant of such Incentive Stock Option, and (ii) the
exercise period shall not exceed five (5) years from the date of grant of such
Incentive Stock Option.

7.       Nonqualified Stock Options

         Options granted pursuant to this Section 7 are intended to constitute
Non-Qualified Stock Options and shall be subject only to the general terms and
conditions specified in Section 8 hereof.

8.       Terms and Conditions of Options

         Each Option granted pursuant to the Plan shall be evidenced by a
written agreement between the Company and the Optionee in such form as the
Committee shall from time to time approve (the "Option Agreement"), which Option
Agreement shall be subject to and set forth the following terms and conditions:

         (a) Number of Shares. Each Option Agreement shall state the number of
shares of Common Stock to which the option relates.


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         (b) Type of Option. Each Option Agreement shall specifically state
whether the Option constitutes a Non-Qualified Stock Option or an Incentive
Stock Option.

         (c) Option Price. The option price or prices of shares of the Company's
Common Stock for options designated as Non-Qualified Stock Options shall be as
determined by the Committee, but in no event shall the option price be less than
the minimum legal consideration required therefor under the laws of the State of
New York or the laws of any jurisdiction in which the Company or its successors
in interest may be organized. The option price or prices of shares of the
Company's Common Stock for ISOs shall be the Fair Market Value of such Common
Stock at the time the option is granted as determined by the Committee.

         (d) Method and Time of Payment. Each Option Agreement shall require
that the Option Price be paid in full, at the time of exercise of an Option, in
cash, by certified or cashier's check.

         (e) Term and Exercisability of Options. Except as otherwise provided in
this Section 8 or Section 9 hereof or unless otherwise determined by the
Committee and set forth in the Option Agreement, at the discretion of the
Committee, options may become exercisable in such number of cumulative
installments as the Committee may establish, provided, however, no option may be
exercisable until at least six months and one day from the date of grant,
provided, however, that, the Committee shall have the authority to accelerate
the exercisability of any outstanding Option at such time and under such
circumstances as it, in its sole discretion, deems appropriate. Except as
specifically provided in Sections 8(f) and 8(g) hereof, all Options shall expire
ten (10) years from the date of grant of such Option (five (5) years in the case
of an Incentive Stock Option granted to a Ten Percent Shareholder) or on such
earlier date as may be prescribed by the Committee and set forth in the Option
Agreement. An Option may be exercised, as to any or all full shares of Common
Stock as to which the Option has become exercisable, by giving written notice of
such exercise to the Committee or its designated agent; provided, however, that
an Option may not be exercised at any one time as to fewer than 100 shares (or
such number of shares as to which the Option is then exercisable if such number
of shares is less than 100).

         (f) Termination of Employment. Except as provided in this Section 8(f)
and in Sections 8(e) and (g) hereof, each Option granted hereunder shall expire,
to the extent not theretofore exercised immediately upon the date that the
Optionee ceases to be employed by the Company or any of its Parent or Subsidiary
Corporations (or on such other date as may be prescribed by the Committee and
set forth in any Option Agreement).

         (g) Death or Disability of Optionee. If an Optionee shall die while
employed by the Company or a Parent or Subsidiary Corporation (or within such
longer period as the Committee may have provided pursuant to Section 8(f)
hereof), or if the Optionee's employment shall terminate by reason of
Disability, all Options theretofore granted to such Optionee (to the extent
otherwise exercisable) may, unless earlier terminated in accordance with their
terms, be exercised by the Optionee or by the Optionee's estate or by a person
who acquired the right to exercise such Options by bequest or inheritance or
otherwise by reason of the death or Disability of the Optionee, at any time
within one (1) year after the date of death or Disability of the Optionee;
provided, however, that the Committee may, in any Option Agreement, extend such


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period of exercisability. In the event that an Option granted hereunder shall be
exercised by the legal representatives of a deceased or former Optionee, written
notice of such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal representative to
exercise such option.

         (h) Other Provisions. The Option Agreements evidencing Options under
the Plan shall contain such other terms and conditions, not inconsistent with
the Plan, as the Committee may determine.

9.       Effect of Certain Changes

         (a) If there is any change in the shares of Common Stock through the
declaration of extraordinary dividends, stock dividends, re-capitalization,
stock splits, or combinations or exchanges of such shares, or in the event of a
sale of all or substantially all of the assets of the Company (an "Asset Sale"),
or the merger or consolidation of the Company with or into another corporation
(a "Merger"), or in the event of other similar transactions, the Committee shall
promptly make an appropriate adjustment to the number and class of shares of
Common Stock available for awards, to the number of shares covered by
outstanding awards after the effective date of such transaction, and, if
applicable, to the price thereof; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated.

         (b) In the event of the dissolution or liquidation of the Company, in
the event of any corporate separation or division, including, but not limited
to, split-up, split-off or spin-off or in the event of other similar
transactions, the Committee may provide that:

                  (i) the Optionee of any Option shall have the right to
exercise such Option; and/or

                  (ii) each Option granted under the Plan shall terminate as of
         a date to be fixed by the Committee, and that not be less than thirty
         (30) days notice of the date so fixed shall be given to each Optionee,
         who shall have the right, during the period of thirty (30) days
         preceding such termination, to exercise (to the extent exercisable)
         with respect to such Option all or any part of the shares of Common
         Stock covered thereby.

         (c) In the event of an Asset Sale or a Merger, any award then
outstanding may be assumed or an equivalent award may be substituted by such
successor corporation or a parent or subsidiary of such successor corporation.
If such successor corporation does not agree to assume the award or to
substitute an equivalent award, the Board may, in lieu of such assumption or
substitution, provide for the realization of such outstanding award in the
manner set forth in subsections 9(b)(i) or 9(b)(ii) above.

         (d) In the event of a change in the Common Stock of the Company as
presently constituted that is limited to a change of all of its authorized
shares of Common Stock into the same number of shares with a different par value
or without par value, the shares resulting from any such change shall be deemed
to be the Common Stock within the meaning of the Plan.

         (e) Except as hereinbefore expressly provided in this Section 9, the
Optionee of an award hereunder shall have no rights by reason of any subdivision
or consolidation of shares of


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stock of any class or the payment of any stock dividend or any other increase or
decrease  in the  number  of  shares  of stock of any  class or by reason of any
dissolution,  liquidation,  Merger or  spin-off  of  assets or stock of  another
company;  and any  issuance by the  Company of shares of stock of any class,  or
securities  convertible into shares of stock of any class, shall not affect, and
no  adjustment  by reason  thereof  shall be made with respect to, the number or
price of shares  of  Common  Stock  subject  to an award.  The grant of an award
pursuant  to the Plan  shall  not  affect  in any way the  right or power of the
Company to make adjustments,  reclassifications,  reorganizations  or changes of
its capital or business structures or to merge or to consolidate or to dissolve,
liquidate  or sell,  or transfer all or part of its business or assets or engage
in any similar transactions.

10.      Period During Which Options May Be Granted

         Awards may be granted pursuant to the Plan from time to time within a
period of ten (10) years from the date the Plan is adopted by the Board, or the
date the Plan is approved by the Shareholders of the Company, whichever is
earlier.

11.      Nontransferability of Awards

         The right of any Optionee to exercise any option granted to him or her
shall not be assignable or transferable by such Optionee otherwise than by will
or the laws of descent and distribution, or pursuant to a domestic relations
order, and any such option shall be exercisable during the lifetime of such
Optionee only by him; provided, however, that the Committee may permit the
further transferability on a general or specific basis and may impose conditions
and limitations on any permitted transferee. Any option granted under the Plan
shall be null and void and without effect upon the bankruptcy of the Optionee to
whom the option is granted, or upon any attempted assignment or transfer, except
as herein provided, including without limitation any purported assignment,
whether voluntary or by operation of law, pledge, hypothecation or other
disposition, attachment, divorce, except as provided above with respect to
Non-Qualified Stock Options, trustee process or similar process, whether legal
or equitable, upon such option.

12.      Beneficiary

         An Optionee may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Optionee, the executor or administrator of the Optionee's estate
shall be deemed to be the Optionee's beneficiary.

13.      Agreement by Optionee Regarding Withholding Taxes

         If the Committee shall so require, as a condition of exercise of an
Option granted hereunder, each Optionee shall agree that no later than the date
of exercise, the Optionee will pay to the Company or make arrangements
satisfactory to the Committee, regarding payment of any federal, state or local
taxes of any kind required by law to be withheld upon the exercise of an Option,
not to exceed the minimum statutory federal, state and local tax withholding
requirements. To the extent provided in the applicable Option Agreement, such
payment may be made by the Optionee with shares of Common Stock (whether
previously owned by, or issuable upon the exercise of an Option awarded to, such
Optionee) having a Fair Market


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Value  equal to the  amount of such  taxes.  Alternatively,  the  Committee  may
provide that an Optionee may elect, to the extent  permitted or required by law,
to have the Company deduct  federal,  state and local taxes of any kind required
by law to be  withheld  upon the  exercise  of an Option from any payment of any
kind due to the Optionee.

14.      Rights as a Shareholder

         An Optionee or a transferee of an award shall have no rights as a
Shareholder with respect to any shares of Common Stock covered by the Option
until the date of the issuance of a stock certificate to him for such shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions of other rights for which
the record date is prior to the date such stock certificate is issued, except as
provided in Section 9 hereof.

15.      No Rights to Employment

         Nothing contained in the Plan or in any option granted under the Plan
shall confer upon any option holder any right with respect to the continuation
of his employment by the Company (or any subsidiary) or interfere in any way
with the right of the Company (or any subsidiary), subject to the terms of any
separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the option holder from
the rate in existence at the time of the grant of an option. Whether an
authorized leave of absence, or absence in military or government service, shall
constitute termination of employment shall be determined by the Committee at the
time.

16.      Approval of Shareholders

         The Plan, and any grants of Options thereunder, shall be subject to
approval by the holder(s) of a majority of the issued and outstanding shares of
the Company's capital stock which are entitled to vote on the subject matter
thereof and are present in person or represented by proxy at a duly-called
meeting of the Shareholders of the Company which approval must occur within one
year after the date that the Plan is adopted by the Board. In the event that the
shareholders of the Company do not approve the Plan at a meeting of the
shareholders at which such issue is considered and voted upon, then, upon such
event, this Plan and all rights hereunder or under any Option Agreement entered
into in connection herewith shall immediately terminate and no Optionee (or any
permitted transferee thereof) shall have any remaining rights under the Plan.

17.      Amendment and Termination of the Plan

         The Board at any time and from time to time may suspend, terminate,
modify or amend the Plan; provided, however, that any amendment that would
materially increase the aggregate number of shares of Common Stock as to which
awards may be granted under the Plan or materially increase the benefits
accruing to Optionees under the Plan or materially modify the requirements as to
eligibility for participation in the Plan shall be subject to the approval of
the holders of a majority of the Common Stock issued and outstanding, except
that any such increase or modification that may result from adjustments
authorized by Section 9 hereof shall not require such approval. Except as
provided in Section 9 hereof, no suspension, termination,

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modification or
amendment of the Plan may adversely affect any award previously granted, without
the express written consent of the Optionee.

18. Compliance with Section 16(b)

         In the case of Optionees who are or may be subject to Section 16 of the
1934 Act, it is the intent of the Company that the Plan and any award granted
hereunder satisfy and be interpreted in a manner that satisfies the applicable
requirements of Rule 16b-3 so that such persons will be entitled to the benefits
of Rule 16b-3 or other exemptive rules under Section 16 of the 1934 Act and will
not be subjected to liability thereunder. If any provision of the Plan or any
award would otherwise conflict with the intent expressed herein, that provision,
to the extent possible, shall be interpreted and deemed amended so as to avoid
such conflict. To the extent of any remaining irreconcilable conflict with such
intent, such provision shall be deemed void as applicable to Optionees who are
or may be subject to Section 16 of the 1934 Act.

19. Restrictions on Issue of Shares.

         (a) Notwithstanding the provisions of Section 8, the Company may delay
the issuance of shares of Common Stock covered by the exercise of an option and
the delivery of a certificate for such shares of Common Stock until the delivery
or distribution of any shares of Common Stock issued under this Plan complies
with all applicable laws (including without limitation, the Securities Act of
1933, as amended), and with the applicable rules of any stock exchange upon
which the shares of Common Stock of the Company are listed or traded.

         (b) It is intended that all exercises of options shall be effective,
and the Company shall use its best efforts to bring about compliance with all
applicable legal and regulatory requirements within a reasonable time, except
that the Company shall be under no obligation to qualify shares of Common Stock
or to cause a registration statement or a post- effective amendment to any
registration statement to be prepared for the purpose of covering the issuance
of shares of Common Stock in respect of which any option may be exercised,
except as otherwise agreed to by the Company in writing.

20. Modification of Outstanding Options.

         The Committee may authorize the amendment of any outstanding option
with the consent of the Optionee when and subject to such conditions as are
deemed to be in the best interests of the Company and in accordance with the
purposes of this Plan.

21. Reservation of Stock.

         The Company shall at all times during the term of the Plan reserve and
keep available such number of shares of Common Stock as will be sufficient to
satisfy the requirements of the Plan and shall pay all fees and expenses
necessarily incurred by the Company in connection therewith.




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22. Limitation of Rights in the Option Shares.

         Any communication or notice required or permitted to be given under the
Plan shall be in writing, and mailed by registered or certified mail or
delivered by hand, if to the Company, to its principal place of business,
attention: President, and, if to an Optionee, to the address as appearing on the
records of the Company.

23.      Governing Law

         The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of New York without giving effect to
the conflict of laws principles thereof.

24.      Effective Date and Duration of the Plan

         This Plan shall, subject to Section 16 hereof, be effective as of
October 26, 2000, the date of its adoption by the Board of Directors, and shall
terminate on the later of (a) the tenth anniversary of the date so determined or
(b) the last expiration of awards granted hereunder.


Date of Shareholder Approval of Plan:  December 12, 2000.

Date of Shareholder Approval of Amendments to Plan:  December 16, 2004.



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