NONCOMPETITION AGREEMENT

     NONCOMPETITION  AGREEMENT (this  "Agreement") dated as of January 19, 2000,
between ANDY J. STORMENT, a resident of the State of Oregon ("Shareholder"), and
PSC Inc., a New York corporation ("Purchaser").


                              W I T N E S S E T H :

     WHEREAS,  pursuant to that certain Agreement and Plan of Merger dated as of
November 9, 1999 (the "Merger  Agreement"),  among  Purchaser,  West Acquisition
Corp.,  a  Washington  corporation  and  wholly-owned  subsidiary  of  Purchaser
("Newco"), and Percon Incorporated,  a Washington corporation (`Percon"),  Newco
is merging  (the  "Merger")  with and into  Percon and Percon is  surviving  the
Merger and will continue its corporate  existence under the laws of the State of
Washington.

     WHEREAS,  Percon's  business  consists of, among other  things,  designing,
engineering,  developing,   manufacturing,   marketing,  distributing,  selling,
licensing and servicing data  collection  and  management  hardware and software
products primarily for the automatic data collection industry and the associated
goodwill developed in connection therewith ("Goodwill").

     WHEREAS,  following the Merger,  Purchaser  will own 100% of the issued and
outstanding shares of Percon.

     WHEREAS,  Shareholder  and an affiliate  of  Shareholder  beneficially  own
approximately  16.6%  of  the  issued  and  outstanding  shares  of  Percon,  is
receiving, directly or indirectly,  substantial consideration in connection with
the Merger and is associated with the Goodwill such that Shareholder may be in a
position to divert the Goodwill for the benefit of a competing enterprise.

     WHEREAS,  to induce  Purchaser  to complete  the Merger and to preserve the
Goodwill,  it is a condition to the  obligations  of Purchaser  under the Merger
Agreement that Shareholder enters into this Agreement.

     NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  respective
covenants  and  agreements  hereinafter  set forth,  and intending to be legally
bound hereby, the parties hereto agree as follows:

     1.  Agreements.

     (a) Noncompetition.  Shareholder  will not,  directly or indirectly,  for a
period of two (2) years  following  the  Closing  Date (as defined in the Merger
Agreement) in any location worldwide.

         i.  engage in,  continue in or carry on any business that competes with
     the Business (as defined below);

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         ii. own or control  any  Conflicting  Organization  (as defined  below)
     (other than as a holder of not more than five  percent (5%) of the combined
     voting power of the outstanding stock of a publicly-traded company);

         iii.consult  with,  advise  or  assist in any way,  whether or not for
     consideration,  any Conflicting Organization in any respect, including, but
     not limited to, advertising or otherwise endorsing the products of any such
     competitor;  soliciting  customers or otherwise  serving as an intermediary
     for any such competitor; or engaging in any form of business transaction on
     other than an arm's-length basis with any such entity; or

         iv. engage  in  any  practice  the  purpose  of  which is to evade  the
     provisions of this covenant not to compete.

Notwithstanding the foregoing,

         (x) Shareholder  may  engage in a business (an "Excepted  Business") as
     to which, and only for so long as, all of the following conditions are met:
     (A) the  business  derives less than twenty  percent  (20%) of its revenues
     from the resale of products  and services  that are  Business  Products (as
     defined  below) or other  products  of  Purchaser  and its  affiliates  (as
     defined  below) and the business  does not design or  manufacture  Business
     Products  or  other  products  of  Purchaser  and its  affiliates;  (B) the
     business is not owned or controlled by any  Conflicting  Organization  that
     would be a Conflicting  Organization  even if it did not own or control the
     Excepted  Business;  (C) Shareholder  uses his best efforts (subject to his
     obligations  to such  business) to cause such  business to resell  Business
     Products of Purchaser or its affiliates and other products of Purchaser and
     its affiliates in lieu of comparable  products of competitors to the extent
     Purchaser and/or its affiliates make such products available on competitive
     terms and conditions;  and (D) Shareholder obtains the consent of Purchaser
     to engage in such  business in advance,  which  consent  Purchaser  may not
     unreasonably   withhold  but  which   Purchaser  may  give   contingent  on
     Shareholder's  continued  compliance  with  the  other  conditions  in this
     paragraph. Without limitation, Shareholder's obligation to use best efforts
     shall include  (subject to his  obligations to such business)  meeting,  at
     Purchaser's request,  with a representative of Purchaser to discuss,  among
     other  matters,  a  transition  schedule  under which such  business  would
     attempt to sell Business  Products and other  products of Purchaser and its
     affiliates as an increasing percentage of such business's sales.

         (y) Each covenant of  Shareholder  in this Section 1 shall extend for a
     period of three (3) years  following the Closing Date in respect of each of
     the following (the "Specified Organizations"):  Symbol Technologies,  Inc.;
     Metrologic   Instruments  Inc.;  Telxon   Corporation;   Welch  Allyn  Data
     Collection,  Inc./Hand  Held Products  Inc.;  Intermec  Technologies  Corp.
     (UNOVA);  Teklogix Corp. and any subsidiary,  joint venture or affiliate of
     any of the foregoing.

For  purposes of this  Agreement,  "affiliate"  shall mean,  with respect to any
entity,  any other person or entity  controlling,  controlled by or under common
control with such entity.

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     (b) Recognizing  the  specialized  nature of the business of Percon and its
affiliates and the scope of competition, Shareholder acknowledges the geographic
scope of this  covenant not to compete to be  reasonable  and to be  coextensive
with the  business of Percon and its  affiliates  on the date  hereof.  The time
period  of  this  covenant  shall  be  extended  for  any  period  during  which
Shareholder is in breach of Section 1(a).

     (c) Confidential Information. Without limiting Shareholder's obligations in
respect  of  trade  secrets  and  similar   information  under  applicable  law,
Shareholder  will  (i) hold  Confidential  Information  (as  defined  below)  in
strictest  confidence and not use such Confidential  Information,  disclose such
Confidential  Information to any person or entity or authorize any person to use
or disclose such Confidential  Information without the written  authorization of
Purchaser,  except in connection  with services  Shareholder is rendering in the
normal course of his employment or  consultancy  (if any) with  Purchaser,  (ii)
comply with all  policies  and  procedures  as  Purchaser  may from time to time
establish to protect and preserve Confidential  Information of which Shareholder
has received  notice and (iii)  exercise due care in  safeguarding  Confidential
Information  against  disclosure of any kind or nature,  whether  intentional or
unintentional,  and use his  best  efforts  to  ensure  the  maintenance  of its
confidentiality.   As  used  herein,   "Confidential   Information"   means  any
confidential  information  or  knowledge  or  data  of  Percon  or  any  of  its
affiliates,  whether or not patentable or copyrightable,  in any way acquired by
Shareholder through the date hereof including without limitation  information or
knowledge (A) of a technical  nature,  such as, but not limited to, Trade Rights
(as defined in the Merger Agreement), methods, know-how, formulae, compositions,
drawings, blueprints, compounds, processes, discoveries, machines, manufacturing
procedures,  techniques,  computer  databases,  source  codes,  computer  codes,
designs,  programs,  prototypes,  inventions  and  computer  programs;  (B) of a
business nature,  such as, but not limited to,  information about sales or lists
of customers  (including mailing lists),  prices,  costs,  purchasing,  profits,
markets,  sales and  marketing  methods,  documents,  records,  contract  forms,
computer disks  containing data and other materials and information  relating to
the  products,  services  or business of Percon and  affiliates,  strengths  and
weaknesses of products,  business  processes,  business and marketing  plans and
activities and employee personnel records; (C) information  pertaining to future
developments,  such as, but not limited to,  research and development and future
marketing  or  merchandising  plans or  ideas;  or (D) of or  pertaining  to the
customers and vendors that Shareholder learns or has learned as a consequence of
his ownership of or employment  with Percon and as to which Percon and/or any of
its  affiliates  has  an  obligation  of  secrecy;   provided,   however,   that
Confidential  Information  shall  not  include  information  that is or  becomes
publicly  available  other than through breach by Shareholder of his obligations
hereunder..

     (d) Customers.  As an independent  obligation of  Shareholder,  Shareholder
will not, on behalf of a Conflicting  Organization,  during the two-year  period
following the Closing Date, be connected in any way with the solicitation of any
then current or potential  customers of Percon or any of its affiliates who were
such customers prior to the date hereof.

     (e) Employees. For a period of two years after the date hereof, Shareholder
will not,  other than on behalf of Purchaser or any of its  affiliates,  employ,
induce to leave the employ of Percon or any affiliate of Percon, or associate as
a partner,  member or otherwise in a direct, material business relationship with
(i) any employee,  consultant or sales representative of Percon or any affiliate
of Percon, (ii) any person who shall have been an employee,  consultant or sales

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representative  of Percon or any affiliate of Percon within the one-year  period
prior to the date  hereof or (iii) any person  who shall have been an  employee,
consultant or sales  representative  of Percon or any affiliate of Percon at any
time during the one year after the date hereof who became  known to  Shareholder
prior to the date  hereof  by  virtue  of his  relationship  with  Percon or any
affiliate of Percon.  This paragraph  shall not apply to employees  whose duties
are  secretarial  or clerical or to  employees  whose  employment  Percon or any
affiliate of Percon has terminated after the date hereof.

     (f) Conflicting  Organizations.  The term "Conflicting  Organization" means
any person  (including  Shareholder as sole  proprietor),  entity,  corporation,
partnership, joint venture or other organization, or the part or division of any
diversified organization, engaged in or planning or attempting to become engaged
in the Business (as defined below).  Without  limitation,  each of the Specified
Organizations  shall be deemed a Conflicting  Organization.  The term "Business"
means   the   design,   engineering,    development,   manufacture,   marketing,
distribution,  sale,  license  and/or  service of Business  Products (as defined
below).  The term  "Business  Products"  means:  (i) radio  frequency  and batch
portable data collection terminals,  (ii) fixed station and integrated decoders,
(iii) hand-held or fixed laser, CCD or image scanners, (iv) warehouse management
and fixed asset management application software, and (v) products that are being
developed,  manufactured,  marketed,  distributed, sold, licensed or serviced by
Percon or any affiliate of Percon as of the date hereof or are within the actual
or demonstrably  anticipated  research or development of Percon or any affiliate
of Percon as of the date hereof.

     (g) Severability.  The parties  intend that  the  covenants of  Shareholder
contained  in  this  Section  1 shall  be  construed  as a  series  of  separate
covenants, one for each city, county or other political subdivision of the State
of Oregon and of each and every other State of the United  States,  or any other
country in the world, including France, each of which is deemed to be separately
named  herein,   where  Percon  or  any  of  its   affiliates   is   developing,
manufacturing,  marketing,  distributing,  selling,  licensing  and/or servicing
products or attempting  to do any of the  foregoing as of the date hereof,  each
for a series of one-year periods within the time span of the covenants contained
in this Section 1. Except for geographic  coverage and periods of effectiveness,
each  such  separate  covenant  shall be  identical  in  terms to the  covenants
contained in this Section 1. If in any judicial  proceeding a court shall refuse
to enforce any of the separate covenants deemed included in this Section 1, then
such unenforceable  covenants shall be deemed eliminated for the purpose of that
proceeding to the extent necessary to permit the remaining separate covenants to
be enforced.  It is the  agreement  of the parties  that the maximum  protection
available  under the law  within  the  foregoing  limits  shall be  provided  to
Purchaser and that if the  restrictions  hereby imposed are deemed by a court to
be unreasonably broad in time,  territory or scope, then this Section 1 shall be
construed to impose only such restrictions as are not unreasonable.

     (h) Compensation.  In  consideration  of  the agreement of Shareholder  set
forth above,  Purchaser  shall pay to  Shareholder  in cash $18,750 per calendar
quarter over the eight  (8)-quarter  period  commencing on the date hereof.  The
initial  such  payment  shall be made on the date  that is the  three  (3) month
anniversary of the date hereof, with the remaining seven (7) payments being made
on the same day of each successive  third month  thereafter.  If Purchaser shall
default in the obligation to make such payments to Shareholder, then Shareholder
shall be released from his  obligations  set forth in this Section 1. Subject to
the  foregoing,  the covenants of  Shareholder in this Section 1 shall be deemed
independent  covenants and be enforceable  against Shareholder without regard to
the  breach  by  Purchaser  of any  other  provision  of this  Agreement  or any
provision of the Merger Agreement or any other agreement.

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     2.  Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Oregon,  without  reference  to conflict of
law principles of any jurisdiction  (including  without limitation Oregon) which
would result in the  application of the domestic  substantive  laws of any other
jurisdiction.

     3.  Successors and Assigns. Purchaser may sell,assign or otherwise transfer
the  covenants  of  Shareholder  herein,  in whole or in part,  to any person or
entity that purchases all or  substantially  all of the business of Percon.  The
terms and  conditions  of this  Agreement  shall  inure to the benefit of and be
binding  upon any such  purchaser,  assignee or  transferee,  whether or not for
valuable consideration.

     4.  Equitable Relief for Violations. Shareholder agrees that the provisions
and  restrictions  contained  in this  Agreement  are  necessary  to protect the
legitimate continuing interests of Purchaser in acquiring Percon pursuant to the
Merger  Agreement,  that any violation or breach of these provisions will result
in irreparable injury to Purchaser for which a remedy at law would be inadequate
and that,  in addition to any relief at law that may be  available  to Purchaser
for such violation or breach and regardless of any other provision  contained in
this  Agreement,  Purchaser  shall be entitled to injunctive and other equitable
relief without  posting any bond or other  security.  Nothing  herein,  however,
shall be construed as prohibiting  Purchaser from pursuing,  in conjunction with
an injunction or otherwise,  any other remedies  available to Purchaser for such
breach or threatened breach, including the recovery of damages from Shareholder.

     5.  Severability.  If any term of this Agreement or the application thereof
is held invalid or unenforceable,  then the validity or  unenforceability  shall
not affect any other term of this Agreement. This Agreement shall be enforced to
the broadest extent possible under the law.

     6.  Notices.All notices given in connection with this Agreement shall be in
writing and shall be  delivered  either by personal  delivery,  by  certified or
registered mail, return receipt requested, or by a recognized express courier or
delivery service, addressed to the parties hereto at the following addresses:

     (a) If to Shareholder, to:

         Mr. Andy J. Storment
         855 Lariat Drive
         Eugene, OR  97401

         with a copy to:

         Perkins Coie LLP
         1211 S.W. Fifth Avenue, Suite 1500
         Portland, Oregon 97204-3715
         Attention:  Roy W. Tucker

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     (b) If to Purchaser, to:

         PSC Inc.
         675 Basket Road
         Webster, New York 14580
         Attention:  Elizabeth J. McDonald

         with a copy to:

         Patrick G. Quick
         Foley & Lardner
         777 East Wisconsin Ave.
         Milwaukee, Wisconsin  53202

or at such other  address  and  number as either  party  shall  have  previously
designated by written notice given to the other party in the manner  hereinabove
set forth. If notice is personally delivered, such communication shall be deemed
delivered upon actual receipt;  if sent by express  courier or delivery  service
pursuant to this paragraph,  such  communication  shall be deemed delivered upon
actual receipt or, if the addressee fails or refuses to accept  delivery,  as of
the date of such failure or refusal;  and if sent by U.S.  mail pursuant to this
paragraph,  such  communication  shall  be  deemed  delivered  as of the date of
delivery indicated on the receipt issued by the relevant postal service,  or, if
the  addressee  fails or  refuses  to  accept  delivery,  as of the date of such
failure or refusal.

     7.  Counterparts.   This  Agreement  may  be  executed  in  any  number  of
counterparts,  each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same agreement.

     8.  Waiver.  Any  waiver of a breach of any of the terms of this  Agreement
shall not operate as a waiver of any other  breach of such terms or of any other
terms,  nor shall failure to enforce any term hereof  operate as a waiver of any
such term or of any other term.

     9.  Captions.  All headings and captions are for  convenience  of reference
only  and are not  part of this  Agreement,  and  shall  have no  effect  on the
construction  or  interpretation  of this Agreement or any section,  subsection,
clause, or provisions hereof.

     10. Amendment. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.

     11. Exclusive Agreement; No Third-Party Beneficiaries. Subject to the terms
of any  employment or  consulting  agreement  that may give rise to  independent
obligations  to Purchaser or others,  this  Agreement  and the Merger  Agreement
constitute  the sole  understanding  of the parties  with respect to the subject
matter  hereof.  The parties hereto intend to confer upon Purchaser and upon any
affiliates  of  Purchaser  any and all rights and  remedies in  connection  with
Shareholder's  covenants  contained herein. This Agreement shall be binding upon
and  inure  to  the  benefit  of  Purchaser,  its  successors  and  assigns  and
Shareholder and his heirs, executors,  administrators and legal representatives.
Subject to the  foregoing  and to Section 3, nothing  contained  herein shall be
deemed to confer upon any other person any right or remedy under or by reason of
this Agreement.

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     12. Taxes. Shareholder has sole responsibility for the payment of state and
federal  income  tax upon any  payments  made by PSC to  Shareholder  under this
Agreement, which payments shall be subject to withholding to the extent required
by applicable law.

     IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of the
date first written above.

                              PSC INC.



                              By:
                                 --------------------------------
                              Its:
                                  -------------------------------



                              -------------------------------------
                              Andy J. Storment

                                      -97-