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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K/A

Amendment No. 1
(Amending Part III  Items 10, 11, 12, 13 and 14)


(Mark One)

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

For the fiscal year ended June 30, 2003
OR

o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ____________

Commission file number 0-16345

SED INTERNATIONAL HOLDINGS, INC.




(Exact name of Company as specified in its charter)


|                                                                                         |  |                                                
|---------------------------------------------------------------------------------------- |  | -----------------------------------------------
|GEORGIA
(State or other jurisdiction
of incorporation or organization)                   |  | 22-2715444
(I.R.S. Employer
Identification No.)
|                                                                                         |  |                                                
|4916 North Royal Atlanta Drive, Tucker, Georgia
(Address of principal executive offices) |  | 30085
(Zip Code)                               

Companys telephone number, including area code: 770-491-8962

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

NONE

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

COMMON STOCK, $.01 PAR VALUE
(Title of Class)

COMMON STOCK PURCHASE RIGHTS
(Title of Class)

Indicate by check mark whether the Company (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 Company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   Yes x   No o

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 the Companys knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K/A or any amendments to
this Form 10-K/A.   o

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).   Yes o   No x

The aggregate market value of the voting stock held by non-affiliates of
the Company was approximately $2.8 million as of September 11, 2003 based upon
the last sale price of the Common Stock as reported on the Over the Counter
Bulletin Board on that day.

There were 3,875,155shares of Common Stock, $.01 par value, outstanding at
September 11, 2003.

DOCUMENTS INCORPORATED BY REFERENCE: None





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TABLE OF CONTENTS



|                                         |  |  |  |  |  |  |  | 
|---------------------------------------- |  |  |  |  |  |  |  | 
|PART III                                
|SIGNATURES                              
|EX-31.1 SECTION 302 CERTIFICATION OF CEO
|EX-31.2 SECTION 302 CERTIFICATIN OF CFO 
|EX-32.1 SECTION 906 CERTIFICATION       
|EX-32.2 SECTION 906 CERTIFICATION       



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EXPLANATORY NOTE

This Amendment No. 1 on Form 10-K/A is being filed to amend Part III of the
Registrants Annual report on Form 10-K for the fiscal year ended June 30,
2003, filed on October 7, 2003 (the Original 10-K). This Amendment No. 1
does not otherwise alter the disclosures set forth in the Original 10-K and
does not reflect events occurring after the filing of the Original 10-K. This
Amendment No. 1 is effective for all purposes as of the date of the filing of
the Original 10-K. The Company will not issue or file a proxy as no matters
are coming before the shareholders for vote.



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Part III of the Original 10-K is hereby amended and restated in its entirety as
follows:




PART III

Item 10. Directors and Executive Officers of the Company

The following table sets forth certain information regarding our current
directors and executive officers.

|                |  |     |    |                           |  |                                                
|--------------- |  | --- | -- | ------------------------- |  | -----------------------------------------------
|Name            |  | Age |    | Position with the Company
|                |  |     |    |                          
|Stewart Aaron   |  |     | 63 |                           |  | Director                                       
|Mark Diamond    |  |     | 38 |                           |  | Director, President and Chief Executive Officer
|Melvyn I. Cohen |  |     | 63 |                           |  | Director, Audit Committee Chair                
|Cary Rosenthal  |  |     | 63 |                           |  | Director                                       
|Jean Diamond    |  |     | 62 |                           |  | Chairman of Board, Executive Vice President    
|Philip Flynt    |  |     | 42 |                           |  | Chief Financial Officer                        
|Jonathan Elster |  |     | 31 |                           |  | Sr. Vice PresidentSales and Marketing         
|Barry Diamond   |  |     | 61 |                           |  | Vice President  Wireless                      

Jean Diamond and Mark Diamond are mother and son. Jonathan Elster is Jean
Diamonds son-in-law. Barry Diamond is Mark Diamonds
uncle. Jonathan Elster is the nephew of Cary Rosenthal.

Mr. Aaron has been a director of the Company since November 1994. Mr. Aaron
has served for over 20 years as President of LABS, Inc., and a silk plant
manufacturer based in Atlanta, Georgia.

Mr. M. Diamond has been a director of the Company since October 1996. Mr.
Diamond currently serves as President, Chief Executive Officer and was formerly
President and Chief Operating Officer of SED International, Inc. Mr. Diamond
was employed by SED International in the Sales Department beginning in January
1987. In February 1991, Mr. Diamond was elected Vice President  Sales of SED
International; in May 1993, he was elected Executive Vice President  Marketing
of SED International; and in February 1994, he was elected Executive Vice
President  Sales of SED International. Mr. Diamond served as Executive Vice
President of the Company beginning in June 1995, and in August 1995 was elected
Executive Vice President of SED International, Inc. In 1999 Mr. Diamond was
elected President and Chief Operating Officer of the Company. Mr. Diamond was
elected Chief Executive Officer in July 2003.

Mr. Cohen has been a director of the Company since November 1999. Mr. Cohen
has been the sole member of the M. Cohen and Company LLC, a certified public
accounting firm in the State of New Jersey, since





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December 1994. Mr. Cohen has been a member of the American Institute of
Certified Public Accountants and a member of the New Jersey Society of
Certified Public Accountants since 1968. Mr. Cohen has been a Certified Public
Accountant for over 35 years.

Mr. Rosenthal has been a director of the Company since 1992. From 1998 until
his retirement in September 2000, Mr. Rosenthal was a director of Master
Graphics, Inc. Mr. Rosenthal served as President and Chief Executive Officer
of Phoenix Communications, a division of Master Graphics, Inc., a commercial
printing firm from December 1997 to September 2000, and he previously served as
President and Chief Executive Officer of Phoenix Communications, Inc. from 1977
until December 1997. Phoenix Communications was sold to Master Graphics in
December 1997.

Ms. J. Diamond was appointed Chairman of the Board of Directors of SED
International Holdings, Inc. on July 2, 2003. Mrs. Diamond is a co-founder of
the Company and has been an integral part of the Company since its inception.
She continues her operational responsibilities in SED International, Inc., as
Executive Vice President.

Mr. Philip D. Flynt joined the Company in November 2002 as Corporate Controller
and assumed the positions of Chief Financial Officer, Vice President  Finance,
Secretary and Treasurer effective April 1, 2003. Prior to joining the Company,
Mr. Flynt spent eleven years with Glenayre Technologies, Inc. (NASDAQ: GEMS), a
leading global supplier of enhanced services, messaging, and carrier grade
communication solutions. While at Glenayre, Mr. Flynt held several key
financial positions including Corporate Vice President of Treasury and Taxation
(2000-2002) and Vice President of Finance  Integrated Network Group
(1997-2000). Prior to Glenayre, Mr. Flynt held accounting and management
positions with Computer Communication Specialist, Inc., Canada Dry Corporation
and Rhodes Furniture, Inc. Mr. Flynt earned a Bachelor of Arts from
Birmingham Southern College in 1984 with dual majors in Accounting and Business
Administration. He is a CPA and a member of the Georgia Society and the
American Institute of Certified Public Accountants.

Mr. J. Elster has been with the Company since 1995. Mr. Elster currently
serves as Senior Vice-President of Sales and Marketing for the Company. Mr.
Elster began his career with the Company as a sales representative in 1995. He
has served as a Sales Manager from 1997 to 1999 and as Vice President-Sales
from 1999 to 2000. In 2000, Mr. Elster was promoted to his current position
and is responsible for all sales and marketing operations within the Company.

Mr. B. Diamond has been Vice-President of the Company since 1987. Mr. Diamond
currently serves as Vice-President of the Companys Wireless Division. Mr.
Diamond has been an industry leader in the Wireless /Electronics Business for
over thirty years. Mr. Diamond was Vice-President of Purchasing for All
Brands/Brands Mart from 1970-1980. Mr. Diamond was President of Great Sounds
of New York, a consumer electronics business, from 1980-1987. In 1987, Mr.
Diamond joined SED International, Inc. and is currently responsible for the
growth and management of the Wireless business within the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Companys
directors and executive officers, and persons who beneficially own more than
10% of
all outstanding Common Stock (Reporting Persons) to file reports of ownership
and
changes in ownership with the Securities and Exchange Commission (Section 16
Reports).
Reporting Persons are required by Securities and Exchange Commission
Regulations to
furnish the Company with copies of all Section 16 Reports. Based solely on a
review
of the Section 16 Reports furnished to the Company by its Reporting Persons
and,
where applicable, written representations by Reporting Persons that no reports
on Form
5 were required, the Company believes that all of its Reporting Persons have
complied
with Section 16(a) filing requirements during and with respect to fiscal 2003.





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Item 11. Executive Compensation

Summary Compensation Table



| |                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following table sets forth information concerning the compensation
paid by the Company during the fiscal years ended June 30, 2003, June 30,
2002 and June 30, 2001, to the Companys Chief Executive Officer and its
four other most highly compensated executive officers.

|                            |                                                    |      |                     |        |                        |       |         |         |  |     |        |        |  |     |         |        |            |  |            |         |            |  |         |   |  |  |   |   |  |  |   |       | 
|--------------------------- | -------------------------------------------------- | ---- | ------------------- | ------ | ---------------------- | ----- | ------- | ------- |  | --- | ------ | ------ |  | --- | ------- | ------ | ---------- |  | ---------- | ------- | ---------- |  | ------- | - |  |  | - | - |  |  | - | ----- | 
|                            |                                                    |      | Annual Compensation |        | Long-Term Compensation
|                            |                                                    |      |                     |        |                       
|                            |                                                    |      |                     |        |                        |       |         |         |  |     |        |        |  |     |         |        |            |  | Awards     |         | Payments  
|                            |                                                    |      |                     |        |                        |       |         |         |  |     |        |        |  |     |         |        |            |  |            |         |           
|                            |                                                    |      |                     |        |                        |       |         |         |  |     |        |        |  |     | Other   |        |            |  |            |         | Securities |  | All    
|                            |                                                    |      |                     |        |                        |       |         |         |  |     |        |        |  |     | Annual  |        | Restricted |  | Underlying |         | Other     
|                            |                                                    |      |                     |        |                        |       |         |         |  |     |        |        |  |     | Compen- |        | Stock      |  | Options    |         | LTIP       |  | Compen-
|                            |                                                    |      |                     |        |                        |       |         |         |  |     |        |        |  |     | sation  |        | Awards     |  | /SARS      |         | Payment    |  | sation 
|Name and Principal Position |                                                    | Year |                     | Salary |                        | Bonus |         | ($)     |  | ($) |        | (#)    |  | ($) |         | ($)   
|                            |                                                    |      |                     |        |                        |       |         |         |  |     |        |        |  |     |         |       
|Gerald Diamond              |                                                    |      | 2003                |        |                        |       | 455,549 |         |  |     |       |        |  |     | 22,293  |        |            |  |           |         |            |  |        |   |  |  |  |   |  |  |  |      
|                            | Former Chairman of the Board,                      |      |                     | 2002   |                        |       |         | 425,563 |  |     |        |       |  |     |         | 23,754 |            |  |            |        |            |  |         |  |  |  |   |  |  |  |   | 2,750 | 
|                            | Chief Executive Officer and                        |      |                     | 2001   |                        |       |         | 514,257 |  |     |        |       |  |     |         | 21,891 |            |  |            | 159,724 |            |  |         |  |  |  |   |  |  |  |   | 2,625 | 
|                            | Director of the Company
and SEDInternational, Inc. |      |                     |        |                        |       |         |         |  |     |        |        |  |     |         |        |            |  |            |         |            |  |         |   |  |  |   |   |  |  |   |       | 
|Mark Diamond                |                                                    |      | 2003                |        |                        |       | 272,516 |         |  |     |       |        |  |     | 20,721  |        |            |  |            |         |            |  |        |   |  |  |  |   |  |  |  |      
|                            | Chief Executive Officer, President,                |      |                     | 2002   |                        |       |         | 238,501 |  |     |        |       |  |     |         | 30,060 |            |  |            |        |            |  |         |  |  |  |   |  |  |  |   | 2,560 | 
|                            | Chief Operating Officer and                        |      |                     | 2001   |                        |       |         | 258,059 |  |     |        | 23,350 |  |     |         | 20,547 |            |  |            | 25,435  |            |  |         |  |  |  |   |  |  |  |   | 2,111 | 
|                            | Director of the Company and
SEDInternational, Inc. |      |                     |        |                        |       |         |         |  |     |        |        |  |     |         |        |            |  |            |         |            |  |         |   |  |  |   |   |  |  |   |       | 
|Jean A. Diamond             |                                                    |      | 2003                |        |                        |       | 224,095 |         |  |     |       |        |  |     | 3,921   |        |            |  |           |         |            |  |        |   |  |  |  |   |  |  |  |      
|                            | Chairman of the Board, Director and                |      |                     | 2002   |                        |       |         | 204,632 |  |     |        |       |  |     |         | 4,957  |            |  |            |        |            |  |         |  |  |  |   |  |  |  |   | 2,433 | 
|                            | Executive
Vice President of SED                    |      |                     | 2001   |                        |       |         | 213,771 |  |     |        |       |  |     |         | 4,968  |            |  |            | 26,256  |            |  |         |  |  |  |   |  |  |  |   | 2,625 | 
|                            | International, Inc.                                |      |                     |        |                        |       |         |         |  |     |        |        |  |     |         |        |            |  |            |         |            |  |         |   |  |  |   |   |  |  |   |       | 
|Barry Diamond               |                                                    |      | 2003                |        |                        |       | 175,875 |         |  |     | 11,750 |        |  |     | 15,390  |        |            |  |           |         |            |  |        |   |  |  |  |   |  |  |  |      
|                            | Vice President of Wireless                         |      |                     | 2002   |                        |       |         | 162,708 |  |     |        |       |  |     |         | 18,949 |            |  |            |        |            |  |         |  |  |  |   |  |  |  |   | 1,447 | 
|                            | Division of SED International, Inc.                |      |                     | 2001   |                        |       |         | 165,097 |  |     |        | 2,150  |  |     |         | 15,415 |            |  |            | 19,910  |            |  |         |  |  |  |   |  |  |  |   | 2,613 | 
|Ronell Rivera               |                                                    |      | 2003                |        |                        |       | 207,549 |         |  |     |       |        |  |     | 9,062   |        |            |  |           |         |            |  |        |   |  |  |  |   |  |  |  |      
|                            | Former Executive Vice President of                 |      |                     | 2002   |                        |       |         | 218,229 |  |     |        |       |  |     |         | 19,244 |            |  |            |        |            |  |         |  |  |  |   |  |  |  |   | 507   | 
|                            | Latin America For Sales and                        |      |                     | 2001   |                        |       |         | 250,000 |  |     |        |       |  |     |         | 17,785 |            |  |            | 10,283  |            |  |         |  |  |  |   |  |  |  |   | 3,256 | 
|                            | Marketing of SED International, Inc.               |      |                     |        |                        |       |         |         |  |     |        |        |  |     |         |        |            |  |            |         |            |  |         |   |  |  |   |   |  |  |   |       | 
|Jonathan Elster             |                                                    |      | 2003                |        |                        |       | 184,058 |         |  |     | 250    |        |  |     | 16,894  |        |            |  |           |         |            |  |        |   |  |  |  |   |  |  |  |      
|                            | Senior Vice PresidentSales                        |      |                     | 2002   |                        |       |         | 153,000 |  |     |        | 5,000  |  |     |         | 18,977 |            |  |            |        |            |  |         |  |  |  |   |  |  |  |   | 2,102 | 
|                            | SED International, Inc                             |      |                     | 2001   |                        |       |         | 140,000 |  |     |        | 8,400  |  |     |         | 7,355  |            |  |            |        |            |  |         |  |  |  |   |  |  |  |   | 2,976 | 
|Michael P. Levine           |                                                    |      | 2003                |        |                        |       | 106,667 |         |  |     | 25,000 |        |  |     | 137,500 |        |            |  |           |         |            |  |        |   |  |  |  |   |  |  |  |      
|                            | Former Chief Financial                             |      |                     | 2002   |                        |       |         | 58,083  |  |     |        | 7,000  |  |     |         |       |            |  |            |        |            |  |         |  |  |  |   |  |  |  |   |      | 
|                            | Officer of the Company                             |      |                     | 2001   |                        |       |         |        |  |     |        |       |  |     |         |       |            |  |            |        |            |  |         |  |  |  |   |  |  |  |   |      | 





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Option/SAR Grants in Fiscal 2003

The Company did not award any stock appreciation rights (SARs) or stock
options to executive officers during fiscal 2003.

Aggregated Options/SAR Exercises and Fiscal Year-end Options/SAR Table

There were no options exercised during fiscal 2003. There were no SARs
outstanding during fiscal 2003. There were no unexercised in-the-money options
at the end of fiscal 2003.

Director Compensation

During fiscal 2003, Messrs. Aaron, M. Cohen and Rosenthal, the Companys
non-employee directors, each received aggregate cash compensation for serving
on the Board and attending regular Board meetings of $16,750, $22,250 and
$16,750, respectively. This compensation was not contingent upon the number of
regular Board and Board committee meetings attended. In addition to
compensation for regular Board Meeting attendance, Messrs. Aaron, M. Cohen and
Rosenthal were paid $1,235, $6,313 and $1,235, respectively, for advisory
services. The Company also pays ordinary and necessary travel expenses for
non-employee directors to attend Board and any committee meetings. No other
compensation was paid by the Company to these individuals.

Executive Employment Agreements

SED International, Inc. has employment agreements with Jean Diamond, Mark
Diamond, Barry Diamond, Jonathan Elster and Ronell Rivera. The Company had an employment
agreement with Gerald Diamond until his death. The employment agreement with
Gerald Diamond is described under Executive CompensationExecutive
Compensation ReportCEO Compensation. The executive officers agreed to a
voluntary annual salary reduction on November 1, 2001. However, salary levels
were re-instated November 30, 2002.

The employment agreement with Jean Diamond is evergreen and renews
annually until it is terminated by the Company or Ms. Diamond pursuant to the
terms thereof. The Agreement provides for a renewable employment term of five
years and (i) provides for an annual base salary of $194,674 (as of November 1,
2001), increased annually in an amount equal to the greater of five percent of
her then current salary or an amount based upon increases in the Consumer Price
Index, (ii) provides for an automobile allowance, and (iii) does not provide
for an annual bonus. Jean Diamonds contract automatically renews each year.

Jean Diamonds employment agreement provides that if a Change of Control
(as such term is defined below) occurs while the employee is employed by SED
International, and if the employees employment is terminated involuntarily, or
voluntarily by the employee upon the occurrence of certain events, the employee
may notify SED International and request a cash payment in an amount equal to
all annual salary, bonuses and other benefits owing to the employee from the
date of termination through the remainder of the term of the employees
employment agreement, except that if the term remaining in the employment
agreement is less than 12 months, the employee shall receive an amount equal to
at least 12 months of such compensation.

Under Jean Diamonds employment agreement a Change of Control is deemed to
have occurred when (i) any individual or entity becomes the beneficial owner of
securities of the Company or SED International representing 30% or more of the
combined voting power of the Companys or SED Internationals then-outstanding
securities entitled to vote generally in the election of directors; (ii) the
Companys Continuing Directors (a term defined to include directors as of the
date of execution of the employment agreements and their duly approved
successors) fail to constitute at least a majority of the members of the Board;
 and (iii) all or substantially all of the assets of the Company are sold without
being duly approved by the Continuing Directors.

Mark Diamond is Chief Executive Officer and President of SED
International, Inc. Mr. Diamonds employment agreement provides an employment
term of 5 years, commencing November 9, 1999. The





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agreement also provides for (i) an annual base salary of $226,000 (as of
November 1, 2001), increased annually in an amount equal to 5% of his then
current salary, (ii) an automobile allowance, and (iii) the possibility of an
annual bonus. The Company may terminate Mr. Diamonds employment for good
cause, as defined in his employment agreement. In the event of termination
without good cause, the Company is obligated to pay Mr. Diamond the greater
of his base salary for the remaining period of his employment agreement or 12
months of base salary, less applicable withholdings.

Barry Diamond is Vice President of the Wireless division of SED
International, Inc. Mr. Diamonds amended employment agreement provides an
employment term of 2 years commencing on November 22, 2002. The employment
agreement also provides for (i) an annual base salary of $186,000 (as of
November 22, 2002) (ii) an automobile allowance, and (iii) the possibility of
an annual bonus. The Company may terminate Mr. Diamonds employment for good
cause as that term is defined in the employment agreement. In the event of
termination for good cause the Company is obligated to pay Mr. Diamond his
base salary up through the date of his termination, less applicable
withholding. The Company may also terminate Mr. Diamond without good cause,
and in this event the Company is obligated to pay Mr. Diamond his base salary
and benefits for the greater of 12 months or the remaining term of the
employment agreement.

Jonathan Elster is Senior Vice President  Sales and Marketing of SED
International, Inc. Mr. Elsters employment agreement provides an employment
term of 3 years, commencing July 1, 2001. The agreement also provides for (i)
an annual base salary of $165,000 (as of July 1, 2001), increased annually in
an amount equal to 5% or as otherwise approved by the Board of
Directors, and (ii) the possibility of an annual bonus. The Company may terminate Mr. Elsterss
employment for good cause, as defined in his employment agreement. In the
event of termination without good cause, the Company is obligated to pay Mr.
Elster the greater of his base salary for the remaining period of his
employment agreement, less applicable withholdings.

Ronell Rivera was Executive Vice President of Latin America for Sales and
Marketing of SED International, Inc. (formerly President of the Latin-American
Division of the Company). Mr. Riveras employment agreement is for a term of 3
years, commencing July 1, 2000. The agreement provides for an annual base
salary of $196,875 (as of November 1, 2001). The base salary is increased
annually in an amount equal to 5%. In addition to his salary the employment
agreement provides Mr. Rivera with (i) an automobile allowance, (ii) life
insurance coverage, and (iii) the possibility of an annual bonus. The Company
may terminate Mr. Riveras employment for good cause, as defined therein. In
the event of termination without good cause, the Company is obligated to pay
Mr. Rivera the greater of his base salary for the remaining period of his
employment agreement or 12 months of base salary, less applicable withholdings.
Mr. Rivera resigned effective March 7, 2003.

Michael Levine resigned his positions as Chief Financial Officer and
Secretary of the Company and Vice President Finance of SED International, Inc.
on March 31, 2003. As part of Mr. Levines resignation agreement of March 31,
2003, the Company agreed to pay him a severance package of $137,500.

Compensation Committee Interlocks and Insider Participation

The Board established a standing Compensation Committee on August 26,
1998. During Fiscal 2003, the members of the Compensation Committee were
Messrs. Aaron, G. Diamond (until his death) and Rosenthal. Mr. G. Diamond
passed away June 12, 2003 and has not been replaced. Mr. G. Diamond was the
Chief Executive Officer of the Company until his death. None of the other
members is or has ever been an officer or employee of the Company. There were
no interlocking relationships between any executive officers of the Company and
any entity whose directors or executive officers served on the Companys
Compensation Committee. Except as described under Lease of Headquarters, in
Item 13, none of the members of the Compensation Committee engaged in
transactions or had relationships requiring disclosure under Item 404 of
Regulation S-K in Fiscal 2003.





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Board Compensation Committee Report on Executive Compensation

The Companys Compensation Committee is responsible for setting annual and
long-term performance goals for the Chief Executive Officer, evaluating his
performance against these goals, and recommending his salary, bonus and
long-term incentives. The Compensation Committee reviews the performance of
all of the executive officers of the Company and recommends to the Board the
amount and form of all compensation of executive officers of the Company.

Executive Compensation Philosophy.The Compensation Committee aims to
achieve the following objectives in structuring the Companys executive
compensation arrangements:



| |  |  | Appeal to executives who are motivated to position
the Company as a leader in selected markets.                                                                          
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Align the financial interests of the executives
with those of the shareholders.                                                                                          
|
| |  |  | Provide compensation opportunities that are within
the range of those provided by microcomputer and cellular
telephone wholesale distribution companies of similar sizes.

As a result of the emphasis on linking executive compensation to
individual and corporate performance, the Companys executives may be paid more
or less than executives of the Companys competitors.

The Compensation Committee supports the concept that stock ownership by
management and stock-related compensation arrangements are beneficial in
enhancing shareholder value and aligning interests among management, the Board
and the shareholders.

CEO Compensation. Gerald Diamond served as Chief Executive Officer of the
Company until his death in June 2003. The Company compensated G. Diamond in
accordance with the terms of a written employment agreement. Mr. G. Diamonds
employment agreement provided for an annual base salary of $ 371,564 (as of
November 1, 2001) increased annually in an amount based upon increases in the
Consumer Price Index. In addition to annual base salary, Mr. G. Diamond was
eligible to receive annual cash bonuses equal to five percent of the Companys
Pretax Adjusted Annual Income, which means with respect to a given fiscal year
(a) the sum of earnings before taxes and minority interests of the Company as
reported on its audited consolidated statement of operations for such fiscal
year, excluding, in all cases, (i) any nonrecurring income and non recurring
costs or expenses, which income, costs or expenses are extraordinary in the
reasonable opinion of the Board, all as calculated in accordance with generally
accepted accounting principles consistently applied, (ii) any interest income
or expense and (iii) additional amortization or depreciation or increase in the
cost of goods sold resulting from any asset revaluations or goodwill, less (b)
$6,000,000. Mr. G. Diamond was not eligible to receive an annual cash bonus
under his employment agreement for Fiscal 2003 because the Company did not have
any Pretax Adjusted Annual Income for that year. Mr. G. Diamonds employment
agreement also provided him with an automobile allowance, disability insurance
coverage and a benefit payable to his surviving spouse, if any, upon his death.
Please refer to Note 18 to the Companys Consolidated
Financial Statements for further information regarding benefits due to
Mr. Diamonds spouse. Mr. G. Diamond also was eligible to receive additional compensation under the
Companys equity compensation plans.

Mark Diamond was appointed Chief Executive Officer of the Company soon
after the close of Fiscal 2003 and is currently acting in such capacity.

The Compensation Committees philosophy in establishing the base salary
and performance bonus structure reflected in Mr. G. Diamonds employment
agreement was to consider the pay to chief executive officers of
similarly-sized companies in the microcomputer and wireless wholesale
distribution industry as a guide and to provide an incentive to Mr. G. Diamond
to remain with the Company and to continue to grow the business of the Company.
The Compensation Committee continues to subscribe to such philosophy and
intends to implement it in structuring Mark Diamonds compensation package.





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Five Year Performance Graph

The following graph presents a comparison of the cumulative total
shareholder return on the Companys Common stock with the Nasdaq Stock Market
(U.S.) Index and the average performance of a group consisting of the Companys
peer corporations on a line of business basis. The companies comprising the
peer issuers group are Arrow Electronics, Inc; Avnet, Inc.; Ingram Micro Inc.;
Merisel, Inc.; and Tech Data Corporation. This graph assumes that $100 was
invested on June 30, 1998, in the Companys Common Stock and in the other
indices and that all dividends were reinvested. The peer corporations were
weighted on a market capitalization basis at the time of each reported data
point. The stock price performance shown below is not necessarily indicative
of future price performance.

PERFORMANCE GRAPH

|                                |  |                         |        |      |  |      |        |      |  |      |        |      |  |  |        |  |  |  |       |  |  |  |       | 
|------------------------------- |  | ----------------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ | ---- |  |  | ------ |  |  |  | ----- |  |  |  | ----- | 
|                                |  | Cumulative Total Return
|                                |  |                        
|                                |  | 6/98                    |        | 6/99 |  | 6/00 |        | 6/01 |  | 6/02 |        | 6/03
|                                |  |                         |        |      |  |      |        |      |  |      |        |     
|SED INTERNATIONAL HOLDINGS, INC |  |                         | 100.00 |      |  |      | 29.23  |      |  |      | 49.23  |      |  |  | 14.15  |  |  |  | 7.10  |  |  |  | 5.23  | 
|NASDAQ STOCK MARKET (U.S.)      |  |                         | 100.00 |      |  |      | 143.67 |      |  |      | 212.43 |      |  |  | 115.46 |  |  |  | 78.65 |  |  |  | 87.33 | 
|PEER GROUP                      |  |                         | 100.00 |      |  |      | 81.29  |      |  |      | 94.42  |      |  |  | 73.38  |  |  |  | 71.60 |  |  |  | 50.03 | 





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##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management

Securities Authorized for Issuance Under Equity Compensation Plans

The Company maintains four stock option plans (the 1991 Plan, the 1995
Directors Plan, the 1997 Plan, 1996 Directors Plan and the 1999 Plan),
which are utilized to promote the long-term financial interest of the Company.
The stock option plans are administered by the Compensation Committee of the
Board of Directors. In the aggregate, the stock option plans authorize the
grant of up to 2,441,500 shares of the Companys common stock to directors,
officers and key employees. The stockholders approved all of the Companys
stock option plans, with the exception of the 1999 Plan.

The 1999 Plan, established on July 20, 1999 for a term of ten years
authorizes the Company to grant up to 1,200,000 shares of common stock to
employees, Directors and Consultants of the Company and is intended to be a
board-based plan in that, at all times not more than fifty percent (50%) of
the optionees and recipients of the plan shall be officers or affiliates.
Under the plan, the Company may grant both nonqualified options and restricted
stock awards and have an option or award price of the fair market value of the
Companys common stock on the date of grant. Unless otherwise specified by the
Compensation Committee, options and restricted awards vest ratably over a four-
year period. All grants expire no later than 10 years from the date of grant.

The following table summarizes the equity compensation plans of the Company as
of June 30, 2003 in regards to the number of securities authorized for
issuance, weighted average exercise price, and remaining securities available
for future issuance for plans approved and not approved by security holders:

Equity Compensation Plans Information

|                                                           |  |                   |           |                   |  |                     |      |                     |  |                     |         | 
|---------------------------------------------------------- |  | ----------------- | --------- | ----------------- |  | ------------------- | ---- | ------------------- |  | ------------------- | ------- | 
|                                                           |  |                   |           |                   |  |                     |      |                     |  | Number of          
|                                                           |  |                   |           |                   |  |                     |      |                     |  | securities         
|                                                           |  |                   |           |                   |  |                     |      |                     |  | remaining available
|                                                           |  | Number of         |           |                   |  |                     |      | for future issuance
|                                                           |  | Securities to be  |           |                   |  |                     |      | under equity       
|                                                           |  | issued upon       |           | Weighted-average  |  | compensation plans 
|                                                           |  | exercise of       |           | exercise price of |  | (excluding         
|                                                           |  | outstanding       |           | outstanding       |  | securities         
|                                                           |  | options, warrants |           | options, warrants |  | reflected in column
|Plan Category                                              |  | and rights (a)    |           | and rights (b)    |  | (a))               
|                                                           |  |                   |           |                   |  |                    
|Equity compensation
plans approved by
security holders     |  |                   | 1,241,500 |                   |  |                     | 2.15 |                     |  |                     | 105,825 | 
|Equity compensation
plans not approved
by security holders |  |                   | 1,200,000 |                   |  |                     | 4.66 |                     |  |                     | 813,273 | 
|                                                           |  |                   |           |                   |  |                     |      |                     |  |                     |         | 
|                                                          
|Total                                                      |  |                   | 2,441,500 |                   |  |                     | 2.87 |                     |  |                     | 919,098 | 
|                                                           |  |                   |           |                   |  |                     |      |                     |  |                     |         | 

Please refer to Note 11 to the Companys Consolidated Financial Statements for
further information regarding the Companys stock option plans.





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##### Table of Contents



Share Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information as of October 20, 2003
regarding the beneficial ownership of the Companys Common Stock by (i) the
persons named in the Summary Compensation Table (above), (ii) the Companys
directors, (iii) each person we know to own beneficially more than 5% of our
outstanding Common Stock, and (iv) all directors and executive officers of the
Company as a group. All shares of Common Stock shown in the table reflect sole
voting and investment power except as otherwise noted.

|                                                                    |  |                         |         |          |  |  |       |  
|------------------------------------------------------------------- |  | ----------------------- | ------- | -------- |  |  | ----- | -
|                                                                    |  | Amount and Nature       |         | Percent 
|Name of Beneficial Owner                                            |  | of Beneficial Ownership |         | of Class
|                                                                    |  |                         |         |         
|Stewart I. Aaron                                                    |  |                         | 30,000  | (11)     |  |  | *     |  
|Carey Rosenthal                                                     |  |                         | 52,500  | (12)     |  |  | *     |  
|Melvyn I. Cohen                                                     |  |                         | 28,000  | (1)      |  |  | *     |  
|Jonathan Elster                                                     |  |                         | 71,420  | (2)      |  |  | 1.84  | %
|Mark Diamond                                                        |  |                         | 186,625 | (3)      |  |  | 4.82  | %
|Barry Diamond                                                       |  |                         | 61,600  | (4)      |  |  | 1.59  | %
|The Estate of Gerald Diamond                                        |  |                         | 349,956 | (5)      |  |  | 9.03  | %
|Jean Diamond                                                        |  |                         | 74,500  | (7)      |  |  | 1.92  | %
|SED Associates                                                      |  |                         | 73,426  | (6)      |  |  | 1.89  | %
|FMR Corp.                                                           |  |                         | 480,000 | (8)      |  |  | 12.39 | %
|Dimension Fund Advisors, Inc.                                       |  |                         | 205,925 | (9)      |  |  | 5.31  | %
|All current directors and executive officers as a group (8 persons) |  |                         | 783,181 | (10)     |  |  | 20.21 | %



|*   |  | Represents less than one percent of the outstanding Common Stock.                                                                                                                                                                                                                                                                                                     
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) |  | The shares owned consist entirely of exercisable options to purchase
common stock.                                                                                                                                                                                                                                                                                    
|   
|(2) |  | The shares include 62,500 options. The shares indicated include a
restricted stock award of 2,500 shares granted May 10, 1999, which vests
pro rata over 10 years, and 6,420 shares of restricted stock award
granted February 28, 2001, which vest pro rata over 3 years. Mr. Elster
has sole voting power over all the shares of restricted stock so awarded
to him.
|   
|(3) |  | The shares include 150,000 options. The shares indicated include a
restricted stock award of 25,000 shares granted May 10, 1999, which vest
pro rata over 10 years, and 11,625 shares of a restricted                                                                                                                                                                 





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##### Table of Contents



|     |  | stock award granted February 28, 2001, which vest pro rata over 3 years.
Mr. M. Diamond has sole voting power over all of the shares of restricted
stock so awarded to him.                                                                                                                                                                                                                                                                                                                                                                                                          
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(4)  |  | The shares include 40,000 options. The shares indicated include a
restricted stock award of 12,500 shares granted May 10, 1999, which
vests pro rata over 10 years, and 9,100 shares of a restricted stock
award granted February 28, 2001, which vest pro rata over 3 years. Mr.
B. Diamond has sole voting power over all of the shares of restricted
stock so awarded to him.                                                                                                                                                                                                     
|    
|(5)  |  | The shares include 150,000 options. The shares indicated include
1,956 shares held of record by Gerald Diamond on the date of his death
as trustee for the benefit of his grandchildren. The shares do not
include shares owned by Jean Diamond, as to which Mr. Diamond disclaims
beneficial ownership. The shares also do not include the shares owned
of record by SED Associates of which Mr. Diamonds estate is deemed the
indirect beneficial owner as described in footnote (6) below.                                                                                       
|    
|(6)  |  | SED Associates is a general partnership of which Gerald Diamond was
the managing partner. As managing partner, Mr. Diamond had sole voting
and investment power with respect to the Common Stock owned by SED
Associates. Therefore, Mr. Diamond was deemed the indirect beneficial
owner of the shares of Common Stock owned of record by SED Associates.                                                                                                                                                                                                                           
|    
|(7)  |  | The shares indicated include 50,000 options. Ms. Diamond has sole
voting power over all of the shares. The shares indicated do not
include 348,000 shares which were held by Gerald Diamond, the husband of
Ms. Diamond, nor 1,956 shares which were held of record by Gerald
Diamond as trustee for the benefit of their grandchildren, as to which
Ms. Diamond disclaims beneficial ownership. The shares indicated also
do not include the shares owned of record by SED Associates of which Mr.
G. Diamond was deemed the indirect beneficial owner as described in
footnote (6).
|    
|(8)  |  | All of the shares indicated are deemed beneficially owned by Fidelity
Management & Research Company, a wholly-owned subsidiary of FMR Corp.,
as a result of its serving as investment adviser to Fidelity Low-Priced
Stock Fund, the owner of the 480,000 shares. FMR Corp.s address is 82
Devonshire Street, Boston, Massachusetts 02109.                                                                                                                                                                                                                                          
|    
|(9)  |  | The shares indicated are owned by several different funds managed by
Dimensional Fund Advisors, Inc., 1299 Ocean Avenue, 11th floor, Santa
Monica, California 90401-1038.                                                                                                                                                                                                                                                                                                                                                                                                            
|    
|(10) |  | The shares indicated do not include shares owned by former directors and
officers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|(11) |  | Includes 30,000 options to purchase common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    
|(12) |  | Includes 35,000 options to purchase common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    





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##### Table of Contents



Item 13. Certain Relationships and Related Transactions

Certain Relationships and Related Transactions With Retired Directors and Officers

The Company utilizes the legal services of Cohen, Pollock, Merlin, Axelrod
& Small, P.C. (CPMAS) for various matters from time to time. A senior
partner and founder of CPMASMr. Elliot Cohenwas a director of the Company
during part of fiscal 2003. The Company paid $179,000 for these legal services
in fiscal year 2003 and does not consider the amounts involved in its
transactions with CPMAS to be material in relation to the Companys business.
Furthermore, the Company believes that any such amounts are not material in
relation to the business of CPMAS. Mr. Elliott Cohen resigned from the Board
of Directors August 20, 2002.

Mr. Larry Ayers resigned his positions as director, Chief Financial
Officer and Secretary of the Company, and VP-Finance of SED International, Inc.
on March 27, 2002. The Company entered into a short term consulting
arrangement at the time of his resignation with LGA Consulting, an entity owned
and managed by Mr. Ayers. During fiscal 2003, LGA Consulting was paid $2,379.
The Company does not consider the amounts involved in its transactions with LGA
Consulting to be material in relation to the Companys business.

The Company in the future does not intend to enter into transactions
similar to those described above without first determining that doing so would
not violate the Sarbanes-Oxley Act of 2002.

Lease of Headquarters

On April 1, 1999 the Company signed a seven-year lease with the Diamond
Chip Group LLC, successor owner of the premises used by the Company for its
headquarters. The members of the Diamond Chip Group LLC are Gerald Diamond,
Jean A. Diamond and Nathan Diamond Revocable Trust, who own respectively 37.5%,
37.5%, and 25% of the outstanding interests in this entity. The beneficiaries
of the Nathan Diamond Revocable Trust are Julie Elster and Mark Diamond,
Daughter and Son respectively of Jean Diamond and the late Gerald Diamond. The
predecessor owner of the premises was Royal Park Company, a Georgia general
partnership whose partners were Gerald and Jean Diamond.

Rental payments for fiscal 2003 were $275,000. Rent escalates each
October at a rate of 3% per year. In addition to rental payments, the Company
pays all operating costs associated with the lease of its headquarters. The
lease includes an option for one three-year renewal upon expiration of the
initial term.

The lease also provides the Company with a right of first refusal to
purchase the premises in the event Diamond Chip Group LLC proposes to sell the
facility during the lease term. The Company believes that the lease with the
Diamond Chip Group LLC is, on terms no less favorable than those available from
unaffiliated parties.

The Company in the future does not intend to enter into transactions
similar to those described above without first determining that doing so would
not violate the Sarbanes-Oxley Act of 2002.





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##### Table of Contents



Item 14. Principal Accounting Fees and Services

The firm of Ernst & Young LLP served as the Companys independent auditors
for fiscal 2003 and 2002.

Audit Fees.The aggregate fees billed by the Companys auditors, Ernst &
Young LLP, for professional services rendered for the audit of the Companys
annual financial statements for the year ended June 30, 2003 and 2002 and the
reviews of the financial statements included in the Companys Forms 10-Q for
those years were $338,000 and $412,000, respectively.

Other Audit Related Fees.The aggregate other audit related fees billed
by the Companys auditors, Ernst & Young LLP, for professional services
rendered for the year ended June 30, 2003 and 2002 were $0 and
$14,000, respectively.

Tax Fees.The aggregate tax fees billed by the Companys auditors, Ernst &
Young LLP, for professional services related to tax matters for the year ended
June 30, 2003 and 2002 were $164,000 and $122,000, respectively.

All Other Fees.The aggregate fees billed for services rendered by Ernst
& Young LLP for 2003 and 2002 other than the services described above, were
$0 and $75,000, respectively.

The Audit Committee has considered the issue of whether the provision of
the non-audit services is compatible with maintaining the auditors
independence. The Audit Committee has concluded that the provision of the
non-audit services listed as Tax Fees and All Other Fees above is compatible with
maintaining the independence of Ernst & Young LLP.




SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Amendment No. 1 to be signed
on its behalf by the undersigned, thereunto duly authorized, this 28th day of
October 2003.

| |  |                                 |  |                                                                                                                                   
| |  | ------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------
| |  | SED INTERNATIONAL HOLDINGS, INC
| |  |                                 |  |                                                                                                                                   
| |  | By:                             |  | /s/ Philip Flynt                                                                                                                  
| |  |                                 |  |                                                                                                                                   
| |  |                                 |  | Philip Flynt
Vice President-Finance, Chief Financial Officer, Secretary and
Treasurer (principal financial and Accounting officer)