EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT  AGREEMENT (this "Agreement") is made as of the 19th day of
January,  2000 by and between PSC INC., a New York  corporation (the "Company"),
and ANDY J. STORMENT ("Executive").

                                R E C I T A L S :

     WHEREAS,  Executive  is  employed  by  PERCON  INCORPORATED,  a  Washington
corporation ("Percon");

     WHEREAS,  pursuant  to  an  Agreement  and  Plan  of  Merger  (the  "Merger
Agreement"),  dated as of November 9, 1999,  among the Company,  Percon and West
Acquisition  Corp., a Washington  corporation  ("Sub"),  Sub is merging with and
into Percon (hereinafter referred to as the "Merger"),  and Percon is becoming a
wholly-owned subsidiary of the Company;

     WHEREAS,  the Company is desirous of assuring the  continued  employment of
Executive,  and Executive is desirous of continued  employment with the Company,
on the terms set forth herein.

     WHEREAS, because of, among other things,  Executive's intimate knowledge of
the  business of Percon as it is  currently  conducted  and the  business of the
Company as it will be conducted  during the term of this Agreement,  the Company
and Executive  recognize the  detrimental  effect on such  businesses  that will
result if  Executive  were to enter into  competition  with the  Company  during
Executive's  employment  with the  Company and for a  reasonable  period of time
thereafter.

     NOW,  THEREFORE,  in  consideration  of the covenants and agreements of the
parties herein contained, the parties hereto agree as follows:

     1.  Employment.  The  Company  hereby  employs  Executive  as a Senior Vice
President.  Executive hereby accepts such employment and agrees to remain in the
employ of the Company or any of its affiliates (as hereinafter  defined) for the
Term (as  hereinafter  defined).  In the  capacity  of  Senior  Vice  President,
Executive shall have such duties and  responsibilities as are established by the
President and Chief Executive  Officer of the Company,  subject to the oversight
of the Board of Directors of the Company.  Executive  agrees,  in performing his
obligations  hereunder,  to use his best  efforts and to dedicate  his  business
time,  skill,  labor and attention to the  performance of such  obligations on a
full-time  basis.  As used herein,  "affiliate"  shall mean, with respect to any
entity,  any other person or entity  controlling,  controlled by or under common
control with such entity.

     2.  Term.  Subject to the terms and conditions of this Agreement, including
but not limited to the provisions for  termination  set forth in Section 11, the
employment of Executive  under this Agreement  shall commence on the date hereof
and continue  through and  including the close of business on December 31, 2001,
unless  extended  by the written  mutual  agreement  of the parties  hereto (the
"Term").

                                      -77-
<PAGE>

     3.  Compensation.

     (a) Base Salary.  As consideration for all services that the Executive will
render to the Company and its affiliates in any capacity,  the Company shall pay
to  Executive  an annual  base  salary at the  annual  rate of  $200,000  ("Base
Salary"),  payable in  accordance  with the customary  payroll  practices of the
Company  applicable  to  executive  employees,  subject to such  deductions  and
withholdings as may be required under applicable federal, state or local laws or
as agreed to by Executive.

     (b) Annual  Bonus.  In lieu  of  management  incentive  plan  compensation,
Executive will be entitled to an annual bonus ("Annual Bonus") for each calendar
year  during  the  Term in an  amount  equal  to (i)  the  product  obtained  by
multiplying  the  Incremental  Gross  Margin (as  hereinafter  defined)  for the
applicable calendar year by (ii) five percent (5%).

     For purposes hereof,  "Incremental  Gross Margin" is an amount equal to the
product  obtained by multiplying (A) the amount by which total sales revenue for
the  portables  products  more fully  described on Exhibit A hereto  ("Portables
Products")  for the applicable  calendar year exceeds the sales revenue  targets
for Portables  Products for the applicable  calendar year,  also as set forth on
Exhibit A by (B) the Gross Margin Percentage (as hereinafter  defined) over such
year with respect to Portables Products. For purposes of this Agreement,  "Gross
Margin  Percentage" is an amount equal to the quotient  obtained by dividing (x)
the amount, if any, by which total sales revenue for the Portables  Products for
the applicable year exceeds the cost of goods sold with respect to the Portables
Products for the  applicable  year by (y) total sales  revenue for the Portables
Products for the applicable year. For purposes of this Agreement,  sales revenue
and cost of goods sold shall be determined in accordance with generally accepted
accounting principles applied on a basis consistent with the Company's financial
statements  on the date  hereof,  and cost of goods  sold  with  respect  to the
Portables  Products shall be determined on a cost  allocation  basis  consistent
with that used by the Company on the date hereof,  which the Company  represents
to be a fair and reasonable basis of allocation.

     Payment of the Annual Bonus, if any, shall be made no later than forty-five
(45) days after  completion  of the calendar  year in which the Annual Bonus was
earned.

     4.  Benefits.  Executive  shall  be  entitled  throughout  the Term and any
extension  of the  Term,  if any  (but not  beyond  termination  of  Executive's
employment except as provided in Section 11), to (a) receive all health, dental,
disability and life insurance  benefits to which full time executive officers of
the  Company  are  entitled  as to which he meets the  eligibility  requirements
universally  applicable to all such executive  officers;  (b) participate in the
Company's  "401(k)"  plan;  and (c) receive an automobile  allowance of $800 per
month. After he has completed one year of employment with the Company, Executive
will be eligible to receive  grants of options under the Company's  stock option
plan,  except that the making of any grants of options to Executive and the size
of grants  shall be subject to the  discretion  of the Board of Directors of the
Company.

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     5.  Expenses.  Executive  shall be reimbursed by the Company for travel and
other business  expenses  incurred in the  performance of his duties  hereunder,
subject to the Company's reimbursement policies.

     6.  Confidential  Information.  Executive  agrees  that during the Term and
thereafter  he 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
the Company,  except in connection  with services  Executive is rendering in the
normal course of his employment or consultancy  (if any) with the Company or any
affiliate,  (ii) comply with all policies and procedures as the Company may from
time to time establish to protect and preserve Confidential Information of which
Executive  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 the  Company  or any of its
affiliates  (including Percon),  whether or not patentable or copyrightable,  in
any way acquired by Executive from the inception of his  employment  with Percon
through  the  termination  of his  employment  with  the  Company  or any of its
affiliates  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 the Company and its affiliates,  strengths
and weaknesses of products, business processes, business and marketing plans and
activities   and  employee   personnel   records;   (C)   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  Executive  learns or has learned as a consequence of
his employment with the Company or Percon and as to which the Company 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 Executive of his  obligations
hereunder.

     Executive  acknowledges and agrees that the  Confidential  Information is a
valuable asset of the Company,  and its protection as  confidential  is vital to
the success of the  Business  (as defined  below).  Executive  acknowledges  and
agrees that all  Confidential  Information  is and shall at all times remain the
sole and  exclusive  property of the  Company,  even if prepared or created,  in
whole or in part,  by  Executive,  and  whether  or not  directly  disclosed  or
entrusted to Executive by the Company or any other person.

                                      -79-
<PAGE>

     Immediately  upon  termination  of  Executive's  employment by the Company,
Executive shall deliver to the Company all originals and copies of everything in
his  possession or under his control that embodies or contains any  Confidential
Information,  including,  without  limitation,  all  documents,  correspondence,
specifications,  blueprints,  notebooks,  reports, sketches,  formulae, computer
programs,   computer  discs,   prototypes,   price  lists,   customer  lists  or
information, samples and all other materials.

     The  foregoing  shall be in addition to any  obligation  Executive may have
under  applicable  law in respect of trade secrets and other  legally  protected
information.

     7.  Noncompetition.

     (a) To preserve  the  goodwill  associated  with the Business and for other
good and  valuable  consideration,  receipt  of which  is  hereby  acknowledged,
Executive hereby covenants and agrees that he will not,  directly or indirectly,
during the Covenant Period:

         i. engage in,  continue  in or carry on any business that competes with
     the Business;

         ii.  own  or  control  any  financial   interest  in   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.

The parties agree that the  geographic  scope of the foregoing  covenants not to
compete  shall  extend  throughout  the  entire  world.  In the event a court of
competent  jurisdiction  determines  that the  provisions  of this Section 7 are
excessively  broad  as  to  duration,  geographical  scope  or  activity,  it is
expressly  agreed that this  covenant not to compete  shall be construed so that
the remaining  provisions shall not be affected,  but shall remain in full force
and effect, and any such over broad provisions shall be deemed,  without further
action on the part of any person,  to be modified,  amended and/or limited,  but
only to the extent  necessary to render the same valid and  enforceable  in such
jurisdiction.  Executive hereby  acknowledges that the foregoing  provisions are
reasonable.

     (b) As used herein,

         i. The term  "Conflicting  Organization"  means any  person  (including
     Executive 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.  Without  limitation,   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 shall each be deemed a Conflicting Organization.

                                      -80-
<PAGE>

         ii. The term "Business"  means the  design,  engineering,  development,
     manufacture,  marketing,  distribution,  sale,  license  and/or  service of
     Business Products (as defined below); provided, however, that following the
     Termination  Date (as defined  below),  the meaning of the term  "Business"
     will be  determined  based  upon  Business  Products  determined  as of the
     Termination Date.

         iii.The term  "Business Products" means: (1) radio frequency  and batch
     portable  data  collection  terminals,  (2) fixed  station  and  integrated
     decoders,  (3)  hand-held  or  fixed  laser,  CCD or  image  scanners,  (4)
     warehouse management and fixed asset management  application software,  (5)
     products, services,  applications,  systems and technologies of the Company
     and its  affiliates  relating to bar coded data,  magnetic  stripe  encoded
     data, radio frequency  communications of bar coded or related data, optical
     character recognition,  machine vision as applied to the recognition of bar
     coded data,  electronic  interchange  of bar coded or related data and RFID
     readers, including without limitation self check-out systems,  verification
     products and electronic shelf labeling products,  and (6) products that are
     being developed,  manufactured,  marketed,  distributed,  sold, licensed or
     serviced by the Company or any  affiliate  of the Company or are within the
     actual or demonstrably  anticipated  research or development of the Company
     or any affiliate of the Company.

         iv. The term "Covenant Period" means  the period commencing on the date
     hereof  and ending on the later of (1) the date one (1) year after the date
     Executive's employment with the Company terminates for any reason or (2) if
     Executive  receives  payments  under  Section  11(a)(i)  or pursuant to the
     agreement described in Section 16, the date through which the Company makes
     such payments.

     8.  Nonsolicitation.

     (a) Customers.  As an independent  obligation of Executive,  Executive will
not, on behalf of a Conflicting  Organization,  during the Covenant  Period,  be
connected  in any way with the  solicitation  of any then  current or  potential
customers of the Company or its affiliates.

                                      -81-
<PAGE>

     (b) Employees.  During the Covenant Period,  Executive will not, other than
on behalf of the Company or any of its affiliates,  employ,  induce to leave the
employ of the  Company  or any  affiliate  of the  Company,  or  associate  as a
partner,  member or otherwise in a direct,  material business  relationship with
(i) any  employee,  consultant  or sales  representative  of the  Company or any
affiliate  of the  Company,  (ii) any person  who shall  have been an  employee,
consultant  or sales  representative  of the  Company  or any  affiliate  of the
Company within the one-year period prior to the expiration or termination of the
Term and any  extension  thereof  or (iii) any  person  who  shall  have been an
employee,  consultant or sales representative of the Company or any affiliate of
the  Company at any time  during  the one year after the date  hereof who became
known to Executive prior to the date hereof by virtue of his  relationship  with
the Company or any affiliate of the Company.  This paragraph  shall not apply to
employees  whose  duties are  secretarial  or  clerical  or to  employees  whose
employment the Company or any affiliate of the Company has terminated  after the
date hereof.

     9.  Inventions; Creative Works.

     (a) Executive will promptly disclose to the Company, in writing, all ideas,
discoveries,  designs,  improvements,  innovations and inventions  (collectively
referred to herein as "Inventions"),  whether patentable or not, either relating
to the existing or planned business,  products,  processes, or procedures of the
Company,  or any  parent  or  subsidiary  of the  Company,  or  suggested  by or
resulting from Executive's  work at the Company,  or resulting wholly or in part
from  the  use of the  Company's  time,  material,  facilities  or  ideas,  that
Executive  has made or conceived or may make or conceive,  whether or not during
working hours or with the Company's resources, alone or with others, at any time
during  Executive's  employment  or within one year after  termination  thereof.
Executive agrees that all such Inventions shall be the exclusive property of the
Company.

     (b) Executive  hereby  assigns  to the Company all  Executive's  rights and
interests in and to all such  Inventions and all patents and copyrights that may
be obtained on them in this and all foreign countries. At the Company's expense,
but without charge to it, Executive will execute, acknowledge and deliver to the
Company  any  specific  assignments  to any such  Inventions  or other  relevant
documents  and take any such  further  action as may  reasonably  be  considered
necessary  by the  Company  at any time  during or  subsequent  to the period of
Executive's  employment  to  obtain  or  defend  letters  patent  in any and all
countries or to obtain documents relating to registration, ownership or transfer
of  copyrights,  or to vest  title  in such  Inventions  in the  Company  or its
successors  or assigns or to obtain for the Company  any other legal  protection
for  such  Inventions,   and  Executive  will  continue  to  provide  reasonable
cooperation  in this manner  even after  Executive's  employment  by the Company
terminates.

     (c) Executive represents that there are no Inventions,  if any, patented or
unpatented,  that  Executive  conceived or made prior to his  employment  by the
Company or Percon that Executive wishes to exclude from this Agreement.

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     (d) Executive  acknowledges that all Creative Works (as defined below) that
are covered by the  definition of a "work made for hire" under 17 U.S.C.  ss.101
of the U.S. Copyright Act of 1976 (the "Copyright Act"),  either relating to the
existing or planned business, products, processes, or procedures of the Company,
or any parent or  subsidiary of the Company,  or suggested by or resulting  from
Executive's work at the Company,  or resulting wholly or in part from the use of
the Company's time,  material,  facilities or ideas,  that Executive has made or
conceived or may make or conceive,  whether or not during  working hours or with
the Company's  resources,  alone or with others, at any time during  Executive's
employment or within one year after  termination  thereof,  will be considered a
"work made for hire",  and the Company  will be regarded as the author and owner
of all copyrights in any such works.  As to any such Creative Works that are not
"work made for hire" under the Copyright Act, such that Executive is regarded as
the copyright author and owner, Executive hereby assigns and agrees to assign to
the Company all of his right,  title and  interest  in any such  Creative  Works
Executive  authors,  either  solely or jointly with  others,  at any time during
Executive's  employment  or within one year after  termination  thereof,  either
relating to the existing or planned business, products, processes, or procedures
of the Company,  or any parent or subsidiary of the Company,  or suggested by or
resulting from Executive's  work at the Company,  or resulting wholly or in part
from  the  use of the  Company's  time,  material,  facilities  or  ideas,  that
Executive  has made or conceived or may make or conceive,  whether or not during
working hours or with the Company's  resources.  Executive  agrees that all such
Creative Works shall be the exclusive  property of the Company.  As used herein,
"Creative  Works" shall mean any and all original  works of authorship  fixed in
any  tangible  medium of  expression,  including  but not  limited to  writings,
compilations of data, charts, forms, drawings,  software,  videos,  photographs,
music,  designs and mask works,  and  further  including  but not limited to any
other subject matter for which  copyright or mask work  protection  would apply,
specifically   including   original  or  revised  designs,   computer  software,
advertising and marketing  materials,  instructional and procedural manuals, and
related documents and copies thereof.

     10. Injunctive   Relief.    Executive   agrees  that  the   provisions  and
restrictions  of Sections 6, 7, 8 and 9 are necessary to protect the  legitimate
continuing  interests  of the  Company,  that any  violation  or breach of these
provisions  will result in irreparable  injury to the Company for which a remedy
at law would be  inadequate  and that, in addition to any relief at law that may
be available to the Company for such  violation or breach and  regardless of any
other provision  contained in this  Agreement,  the Company shall be entitled to
injunctive  and  other  equitable  relief  without  posting  any  bond or  other
security. Nothing herein, however, shall be construed as prohibiting the Company
from  pursuing,  in  conjunction  with an  injunction  or  otherwise,  any other
remedies  available  to the  Company  for  such  breach  or  threatened  breach,
including the recovery of damages from Executive.

     11. Termination of Employment.

     (a) Termination  of  Employment   Without  Cause.   In  the  event  of  the
termination of employment of Executive by the Company prior to the expiration of
the Term without Cause (as hereinafter defined) or the voluntary  termination of
employment  by Executive  for Good Reason (as  hereinafter  defined),  Executive
shall  be  entitled  to  receive  only  (i)  from  the  effective  date  of such
termination  (the  "Termination  Date") until the  expiration of the Term or the
first anniversary of the Termination  Date,  whichever is later, an amount equal
to Executive's Base Salary at the annual rate in effect at the Termination Date,
(ii)   reimbursement  for  any  and  all  monies  advanced  in  connection  with
Executive's   employment  for  expenses   incurred  by  Executive   through  the
Termination Date, subject to the Company's reimbursement policies, (iii) the pro
rata  portion of any Annual  Bonus  payable for the  calendar  year in which the
termination  occurred,  determined on the basis of the number of days  Executive
was employed by the Company during the year in which such termination  occurred,

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(iv)  Executive's  then current health,  dental,  life and accidental  death and
dismemberment  insurance  benefits for a period until the expiration of the Term
or the first  anniversary of the Termination  Date,  whichever is later, and (v)
all other payments and benefits to which  Executive may be entitled  pursuant to
this Agreement or under the terms of any Company benefit plan in which Executive
was participating  through the Termination Date. Payment of amounts set forth in
clause  (i) above  shall be made in  accordance  with the  Company's  prevailing
practice;  with respect to clauses (iv) and (v) above,  pursuant to the terms of
the benefit plan establishing such benefit;  with respect to clause (ii), within
ten (10) business days after the later of the Termination Date or the submission
of satisfactory  documentation;  and with respect to clause (iii), no later than
forty-five  (45) days after  completion of the calendar year in which the Annual
Bonus was earned.  In the event of Executive's  death while receiving  severance
payments  hereunder,  all remaining  severance  installment  payments  otherwise
payable to Executive  hereunder will be paid in the same amounts and in the same
manner to  Executive's  heirs and legal  representatives.  All payments  made to
Executive hereunder will be subject to all applicable employment and withholding
taxes.

     For purposes of this Agreement,  "Cause" shall mean (A) Executive's failure
(it being  understood  that a failure  to  achieve  performance  goals in and of
itself or an  inability  to act because the  Company  fails to provide  adequate
supporting  resources  shall  not  constitute  "failure"  for  purposes  of this
definition)  or refusal to perform such services as may  reasonably be delegated
or assigned to Executive,  consistent with  Executive's  position (except to the
extent such failure or refusal to perform is a direct  result of a relocation of
the location of Executive's principal office to a location more than twenty-five
(25) miles from Eugene,  Oregon) or  Executive's  violation  of express  Company
policies, (B) Executive's gross negligence in connection with the performance of
Executive's  duties,  (C) Executive's  commission of acts involving  dishonesty,
willful  misconduct,  breach of fiduciary  duty,  fraud,  or any similar offense
that,  in any such  case,  materially  affects  Executive's  ability  to perform
Executive's  duties for the Company or any of its  affiliates or may  materially
adversely  affect  the  Company  or  any  of  its  affiliates,  (D)  Executive's
conviction of a felony, or (E) the violation of a material law by the Company or
any affiliate where Executive  willfully caused the Company or such affiliate to
commit such violation.  Termination of the services of Executive for Cause shall
not be  effective  unless and until acted upon by the Board of  Directors of the
Company and unless and until  written  notice shall have been given to Executive
which notice shall include  identification  with  specificity  of each and every
factual basis or incident upon which the  termination is based.  Notwithstanding
the preceding  sentence,  in connection  with the termination of the services of
Executive  for Cause  under  clause (A)  above,  the Board of  Directors  of the
Company shall take no action until Executive has been provided written notice of
the  services  Executive  has  failed or  refused to  perform,  or the  policies
Executive has violated, and such failure or refusal, or such violation,  remains
unremedied for thirty (30) days after Executive has received such notice.

     For purposes of this Agreement,  "Good Reason" shall mean the occurrence of
any of the following:  (A) a material  reduction of Executive's  duties,  title,
authority or  responsibilities  with the Company relative to Executive's duties,
title,  authority or responsibilities  with the Company as in effect immediately
prior to such reduction,  or the assignment to Executive of such reduced duties,
title, authority or responsibilities,  other than such changes in duties, title,
authority  and  responsibilities  as  may be a  natural  consequence  of  Percon
becoming a wholly owned subsidiary of the Company;  (B) a material  violation of

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the Company's obligations under this Agreement;  (C) a material reduction by the
Company in the kind or level of  employee  benefits  (other than the Base Salary
and Annual Bonus  provided for by Section  3(a) and 3(b) of this  Agreement)  to
which  Executive  was entitled  immediately  prior to such  reduction,  with the
result that Executive's overall benefits package is materially  reduced,  unless
the overall benefits package of executive  officers of the Company  generally is
similarly  reduced;  (D) the relocation of Executive to a facility or a location
more than 25 miles from the city,  village,  town or other municipality in which
Executive  is then  located;  or (E) the  failure  of the  Company to obtain the
assumption  of this  Agreement  by any  successors  to the  Company's  business.
Termination  of the services of Executive for Good Reason shall not be effective
unless and until  written  notice  shall have been  given to the  Company  which
notice shall include  identification  with specificity of each and every factual
basis or  incident  upon which the  termination  is based.  Notwithstanding  the
preceding  sentence,  in  connection  with the  termination  of the  services of
Executive  for  Good  Reason  under  clause  (A),  (B) or  (C)  above,  no  such
termination  may be effective  unless  Executive has provided to Company written
notice  identifying  with  specificity  each and every factual basis or incident
upon  which  the  termination  is based  and  such  basis  or  incident  remains
unremedied for thirty (30) days after Executive has delivered such notice.

     (b) Termination for Cause or by Voluntary Resignation. If, during the Term,
Executive's  employment  is terminated by the Company for Cause or terminated by
Executive's  voluntary  resignation  other than for Good Reason,  then Executive
shall be entitled to receive only (i) Executive's Base Salary earned through the
Termination  Date and (ii)  reimbursement  for any and all  monies  advanced  in
connection  with  Executive's  employment  for  expenses  incurred by  Executive
through the Termination Date, subject to the Company's reimbursement policies.

     Payment  of  amounts  set  forth  in  clause  (i)  above  shall  be made in
accordance  with the  Company's  normal  practice  for payment of final wages to
terminating employees; and with respect to clause (ii), within ten (10) business
days after the later of the  Termination  Date or the submission of satisfactory
documentation.

     (c) Termination  by Reason of Death or  Disability.  If,  during  the Term,
Executive's  employment  is terminated  by reason of death or  disability,  then
Executive  (or  in the  event  of  Executive's  death,  his  estate,  heirs  and
beneficiaries,  as  applicable)  shall be entitled to receive  only (i) all Base
Salary earned through the Termination  Date; (ii)  reimbursement for any and all
monies advanced in connection with Executive's  employment for expenses incurred
by  Executive   through  the   Termination   Date,   subject  to  the  Company's
reimbursement  policies;  (iii) the pro rata portion of any Annual Bonus payable
for the calendar year in which the termination occurred, determined on the basis
of the number of days  Executive was employed by the Company  during the year in
which such  termination  occurred,  and (iv) all other  payments and benefits to
which Executive may be entitled pursuant to this Agreement or under the terms of
any  Company  benefit  plan in which  Executive  was  participating  through the
Termination Date.

     Payment  of  amounts  set  forth  in  clause  (i)  above  shall  be made in
accordance  with the  Company's  normal  practice;  with  respect to clause (iv)
above, pursuant to the terms of the benefit plan establishing such benefit; with
respect  to  clause  (ii),  ten  (10)  business  days  after  the  later  of the
Termination  Date or the  submission  of  satisfactory  documentation;  and with
respect to clause (iii), no later than forty-five (45) days after  completion of
the calendar year in which the Annual Bonus was earned.

                                      -85-
<PAGE>

     (d) Notwithstanding   the  foregoing,   the  Company   may  condition   the
entitlement of Executive or his estate, heirs and beneficiaries,  as applicable,
to any payment or benefit under this Section 11 upon receipt of a fully executed
general release in favor of the Company and its affiliates in reasonable form to
be  prepared by the  Company,  except  that  Executive  shall not be required to
release  entitlements to indemnification  under applicable law or the charter or
bylaws of the Company and its affiliates, rights under this Section 11 or rights
under Section 5.10 of the Merger Agreement.

     (e) Without  limitation,  the  provisions  of  Sections 6, 7, 8 and 9 shall
survive the termination of Executive's employment for any reason.

     12. Notice. 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:

     If to Executive:

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

     Copy to:

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

     If to the Company:

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

     Copy to:

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

                                      -86-
<PAGE>

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.

     13. 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.

     14. 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.

     15. Governing Law; Venue. This Agreement shall be construed and enforced in
accordance  with and  governed  by the  internal  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.

     16. Change in Control.  Simultaneous with the execution  hereof,  Executive
and the Company are entering  into a  Change-in-Control  (the "Change in Control
Agreement").  Anything in this  Agreement  to the contrary  notwithstanding,  if
there is a Change in Control (as defined in the Change in Control  Agreement) of
the Company at a time that the Change in Control  Agreement  is in effect and if
Executive's  employment is thereafter  terminated at such time as this Agreement
and the Change in Control Agreement are still in effect, then the obligations of
the Company and the rights of Executive in respect of such termination  shall be
as provided in the Change in Control Agreement rather than this Agreement.

     17. Termination  Obligations.  Executive  agrees  that  if  his  employment
hereunder  is  terminated  for  any  reason,  then he  will  meet at a  mutually
agreeable time and location (upon which the Company and Executive will use their
best efforts to agree) with a  representative  of the Company to discuss,  among
other  matters,  the provisions of this  Agreement and  Executive's  obligations
hereunder within three (3) business days after his termination.

     18. Assignment.  Neither  this  Agreement  nor any  interest  herein may be
assigned by Executive.  The Company may freely assign this Agreement and any and
all  interest  herein to any  person or entity  that,  directly,  or  indirectly
through one or more intermediaries,  controls,  or is controlled by, or is under
common control with, the Company or in connection  with a transfer,  directly or
indirectly,  of all or  substantially  all of the  business  of the  Company  or
Percon.

                                      -87-
<PAGE>

     19. Miscellaneous.  No provisions of this Agreement may be modified, waived
or discharged  unless such waiver,  modification  or discharge is agreed to in a
writing,  signed by all parties hereto. This Agreement shall be binding upon and
inure to the benefit of the Company,  its  successors  and assigns and Executive
and  his  heirs,  executors,  administrators  and  legal  representatives.  This
Agreement  may be executed in one or more  counterparts,  each of which shall be
deemed to be an original but all of which  together will  constitute one and the
same instrument.

     20. Entire Agreement;  Amendment.  This Agreement and the Change in Control
Agreement  contain the entire agreement  between the parties with respect to the
employment  of  Executive  by the Company or Percon and  supersede  all previous
agreements  related to the  employment  of  Executive  by the Company or Percon.
Notwithstanding  the  foregoing,   Executive  acknowledges  he  has  independent
obligations  under that certain  Noncompetition  Agreement between Executive and
the Company  dated as of the date hereof.  This  Agreement may not be amended or
changed except by a writing signed by both parties.

                                      -88-
<PAGE>


     IN WITNESS  WHEREOF,  Executive has executed this Agreement and the Company
has caused this Agreement to be executed as of the date first above written.

                                   PSC INC.


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


                                   EXECUTIVE:


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


                                      -89-
<PAGE>
                                                                       EXHIBIT A
                                                                       ---------

As used  herein,  "Portables  Products"  means (a) all  products and services of
Percon and its  affiliates  immediately  prior to the date  hereof and (b) those
products  and  services of PSC within its  Commercial/Industrial  HHLS  Business
immediately prior to the date hereof.

                                                    Targets
                                                    -------

                                  1999 Total      2000 Total     2001 Total
                                 (in millions)   (in millions)  (in millions)
Portables Product areas:

     1.  Existing Percon Business     $32              $39            $45
         1999 = $35 million
         2000 = $42 million

     2.  Existing PSC Commercial/     $36              $40            $44
         Industrial HHLS Business
         1999 = $36 million
         2000 = $40 million


EXAMPLE:  Sales of  Portables  Products  are $89  million in Year 2000 and gross
margin percentage is 45%.

  $89  -   $79  =  $10 million x 45%  =  $4.5 million  x   5%     =   $225,000
million  million   Incremental  Gross     Incremental   Incentive      Annual
 Actual    Base       Sales     Margin   Gross Margin     Factor    Bonus Earned



Notwithstanding the foregoing, if sales of Portables Products exceed $68 million
but are less than $79 million in Year 2000,  then Executive shall be entitled to
an Annual  Bonus of $25,000 for such year.  Notwithstanding  the  foregoing,  if
sales of Portables  Products exceed $79 million but are less than $89 million in
Year 2001,  then  Executive  shall be entitled to an Annual Bonus of $25,000 for
such year.

                                      -90-