SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

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/ / Preliminary Proxy Statement
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14a-6(e)(2))
/X/ Definitive Proxy Statement
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/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

MARSHALL INDUSTRIES
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MARSHALL INDUSTRIES
9320 TELSTAR AVENUE
EL MONTE, CALIFORNIA 91731-2895

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

The Annual Meeting of Shareholders (the "Annual Meeting") of Marshall
Industries (the "Company") will be held at the office of the Company, 9320
Telstar Avenue, El Monte, California, on October 21, 1997 at 9 a.m., local time,
for the following purposes:

1. To elect directors for the year. Gordon S. Marshall, Robert Rodin,
Richard D. Bentley, Richard C. Colyear, Jean Fribourg, Lathrop Hoffman,
Jose Menendez, Raymond G. Rinehart and Howard C. White have been
nominated for election as directors.

2. To consider and act upon a proposal to ratify the appointment of Arthur
Andersen LLP as the Company's independent auditors for the fiscal year
ending May 31, 1998.

3. To consider and act upon a proposal to adopt the 1997 Stock Option Plan.

4. To transact such other business as may properly come before the meeting
or any adjournment thereof.

Only shareholders of record at the close of business on August 25, 1997 are
entitled to notice of, and to vote at, the Annual Meeting.

If you do not plan to attend personally, please promptly sign and return the
enclosed proxy in the accompanying envelope. Your proxy is solicited on behalf
of the management of the Company. It is necessary to have a majority of all
outstanding shares represented at the Annual Meeting in order to transact
official business. A proxy statement is set forth on the following pages.

By Order of the Board of Directors

GORDON S. MARSHALL
Chairman

August 29, 1997

MARSHALL INDUSTRIES
9320 TELSTAR AVENUE
EL MONTE, CALIFORNIA 91731-2895

PROXY STATEMENT
MAILED ON OR ABOUT AUGUST 29, 1997

The accompanying proxy is solicited on behalf of the management of Marshall
Industries (the "Company") for use at the Annual Meeting of Shareholders on
October 21, 1997 (the "Annual Meeting") or any adjournment thereof, and the
expense of such solicitation will be borne by the Company. Proxies properly
executed and received by the Company prior to the Annual Meeting, and not
revoked, will be voted.

A shareholder giving a proxy has the power to revoke it at any time prior to
its use by filing with the Secretary of the Company at the address above a
written revocation or a proxy bearing a later date, or if personally present at
the Annual Meeting, by electing to vote in person.

The holders of Common Stock of record on the books of the Company at the
close of business on August 25, 1997 (the "Record Date") are eligible to vote at
the Annual Meeting. On that date, there were 16,616,364 shares outstanding. Each
shareholder is entitled to one vote for each share owned. A shareholder is
entitled to cumulate votes for the election of directors (that is, cast for any
one or more candidates a number of votes equal to the number of the
shareholder's shares multiplied by the number of directors to be elected).
However, no shareholder may cumulate votes for the election of directors unless
the names of such candidates have been placed in nomination prior to the voting,
and the shareholder has given notice of his intention to cumulate votes at the
Annual Meeting prior to the voting. If any one shareholder has given such
notice, each shareholder may cumulate his votes and give one candidate all of
his votes or distribute his votes among as many candidates as he sees fit. If
any shareholder elects cumulative voting, the proxyholders are authorized in
their discretion to vote their proxies cumulatively.

A majority of the outstanding shares of the Company's Common Stock as of the
Record Date, represented in person or by proxy, will constitute a quorum at the
Annual Meeting. In determining the shares present, shares with respect to which
authority to vote is withheld, abstentions and shares held of record by a broker
or its nominee ("broker shares") that are voted on any matter will be included.
Broker shares that are not voted on any matter will not be included in
determining the shares present. Approval of the Company's 1997 Stock Option Plan
requires the affirmative vote of a majority of the shares voting and requires
that the number of shares voting constitutes a majority of the outstanding
shares of the Company's Common Stock as of the Record Date. The election of each
director and the approval of any other matter submitted to a vote of the
shareholders requires the affirmative vote of a majority of the shares voting.
In determining the number of shares voting on the Company's 1997 Stock Option
Plan, the election of directors or any other matter submitted to a vote of the
shareholders, shares with respect to which authority is withheld, abstentions
and broker shares that are not voted will not be included. Any unmarked proxies,
including those submitted by brokers or nominees, will be voted in favor of the
proposals and nominees of the Board of Directors, as indicated in the
accompanying proxy card.

The solicitation of proxies for the Annual Meeting will be made primarily by
mail. However, if necessary to ensure satisfactory representation at the Annual
Meeting, additional solicitation may take place by telephone, telegraph and
personal interview by employees of the Company. No such employee will receive

additional compensation for such services. The Company has retained Corporate
Investor Communications, Inc. to assist in the solicitation of proxies on its
behalf for a fee of approximately $5,000, plus out-of-pocket expenses.

ELECTION OF DIRECTORS

At present, the Bylaws of the Company provide that the Board of Directors
will be composed of between seven and thirteen directors, with the exact number
of directors to be set from time to time by the Board or the shareholders. The
Board of Directors in October 1994, established the present number of directors
at nine. Unless otherwise instructed, the proxyholders will vote the proxies
received by them for the nine nominees shown below for the term of one year and
until their successors are duly elected and qualified. All of the nominees have
consented to being named in this Proxy Statement, and to serve as directors if
elected. Although it is not contemplated that any of the nominees will
subsequently decline or be unable to serve as a director, in either event, the
proxies will be voted by the proxyholders for such other persons as may be
designated by the present Board of Directors.

The following table sets forth certain information as of July 31, 1997 with
respect to those persons who are nominees for re-election as directors of the
Company, each of whom, if elected, will serve until the next Annual Meeting of
Shareholders and until their successors are duly elected and qualified.

SHARES OF COMMON STOCK
BENEFICIALLY OWNED(1)
-----------------------
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME AGE POSITION OWNERSHIP OF CLASS
- --------------------- --------- ---------------------------- ----------- --------

Gordon S. Marshall 77 Chairman of the Board 284,830 1.7%
Robert Rodin 43 Director, President and 98,500(2) *
Chief Executive Officer
Richard D. Bentley 57 Director and Executive Vice 17,084 *
President
Richard C. Colyear 58 Director 2,000 *
Jean Fribourg 52 Director 500 *
Lathrop Hoffman 72 Director 4,000 *
Jose Menendez 60 Director 500 *
Raymond G. Rinehart 75 Director 4,300(3) *
Howard C. White 56 Director 1,800(4) *
<FN>
- ------------------------

* Represents less than 1%.

(1) Except as provided under state community property laws and unless otherwise
indicated, each nominee has sole voting and investment power with respect to
the shares shown as beneficially owned by him.

(2) Includes 70,000 shares which are subject to options that are presently
exercisable or become exercisable on or before September 30, 1997.

(3) Includes 2,700 shares held in a revocable trust for which Mr. Rinehart is
the trustee.

(4) Includes 400 shares which are held in the retirement account of Mr. White's
wife.

Mr. Marshall is the founder of the Company and has been its Chairman of the
Board since October 1954 and was Chief Executive Officer of the Company until
April 1994. Additionally, he served as President of the Company from April 1982
to June 1992. Mr. Marshall is also a member of the Board of Amistar Corporation.

Mr. Rodin became a Vice President in October 1988 and was promoted to Senior
Vice President in August 1989, to President and Chief Operating Officer in June
1992 and to Chief Executive Officer in April 1994. He joined the Company in
October 1983. Mr. Rodin has served as a director of the Company since October
1992.

Mr. Bentley became a Vice President in October 1986 and was appointed Senior
Vice President in April 1988. He was promoted to Executive Vice President of the
Company in August 1989. Mr. Bentley has served as a director of the Company
since October 1992.

Mr. Colyear has served as a director of the Company since August 1991. Since
1989 Mr. Colyear has been President of Colyear Development Corporation, a
privately held real estate firm which develops and operates both office and
industrial properties. From 1967 to 1989, Mr. Colyear was employed by Security
Pacific National Bank in various capacities, including First Vice President, in
connection with its commercial lending activities.

Mr. Fribourg has served as a director since October 1994 and since 1992 has
been the Chief Executive Officer of Sonepar Electronique International (SEI),
one of the largest electronic components distributors in Europe and is a member
of the Executive Boards of SEI and Sonepar Distribution. During the last ten
years, Mr. Fribourg has held several management and executive positions with
Sonepar and SEI, including SEI Country Manager (Spain) and Sonepar Distribution
Country Manager (Spain and Portugal).

Mr. Hoffman has served as a director since August 1984. For more than the
last 5 years, Mr. Hoffman, through several corporations, has and continues to
own and operate Acura, General Motors, Honda, Isuzu and Saturn automobile
dealerships in Southern California. Mr. Hoffman is also Chairman of the Board of
Granite State Bank (formerly The Bank of Monrovia) in Monrovia, California.

Mr. Menendez has served as a director since October 1994 and has been the
Chairman of the Executive Boards of SEI and Sonepar since 1990 and 1991,
respectively. Mr. Menendez also has held the position of Managing Director and
since 1992 has been a member of the Executive Board of Sonepar, S.A. Mr.
Menendez has held management and executive positions with the Sonepar companies
for over twenty years.

Mr. Rinehart has been a director of the Company since 1982. Mr. Rinehart
formerly served as Chairman of the Executive Committee of the Board of
Directors, Chairman of the Board, President and Chief Executive Officer of Clow
Corporation. For more than the last 5 years, Mr. Rinehart has been the Chairman
of the Board of RGR Enterprises, and is a director of Goshen Rubber Co.

Mr. White has been a director since January 1992. From 1965 to 1991, Mr.
White was associated with the international accounting and consulting firm of
Andersen Worldwide. Until his retirement in 1991, Mr. White was Managing
Director of Finance for Arthur Andersen's worldwide business unit and had also
served as Managing Partner, Accounting, Audit and Financial Consulting Practice,
Los Angeles/Southern California, Hawaii and Nevada. Mr. White is currently
President of White & White LLC, a financial and business consulting services
company.

COMMITTEES

Among the committees created by the Board of Directors are an Audit
Committee and a Stock Option and Compensation Committee (the "Compensation
Committee"). The Board has not designated a nominating committee. The members of
the Audit Committee are Richard C. Colyear, Lathrop Hoffman, Raymond G. Rinehart
and Howard C. White. The Audit Committee reviews and makes recommendations to
the Board of Directors with respect to (i) the engagement or re-engagement of an
independent accounting firm to audit the Company's financial statements for the
then current fiscal year, and the terms of such engagement; (ii) the Company's
policies and procedures for maintaining the Company's books and records and
furnishing information to the independent auditors; (iii) the procedures to
encourage access to the Audit Committee and to facilitate the timely reporting
during the year of the Company's independent auditors' recommendations and
advice to the Audit Committee; (iv) the implementation by management of the
independent auditors' recommendations and advice; (v) the implementation by
management of the recommendations made by the independent auditors in its annual
management letter; (vi) the adequacy and implementation of the Company's
internal accounting controls and the adequacy and competency of the related
personnel; and (vii) such other matters relating to the Company's financial
affairs and accounts as the Audit Committee may in its own discretion deem
desirable. One Audit Committee meeting was held during the last fiscal year.

The Compensation Committee members are Richard C. Colyear, Lathrop Hoffman,
Raymond G. Rinehart and Howard C. White. The Compensation Committee recommends
changes in employees' salaries, incentives, pensions, savings plans and other
fringe benefits to the Board, and administers the Company's stock option plans.
As administrator of the stock option plans, the Committee determines which
employees are eligible for participation in the plans, designates the optionees
and, within the restrictions of each particular plan, determines the terms of
the grant and exercise of options under the plans. The Compensation Committee
also makes recommendations from time to time to the Board of Directors regarding
possible modifications or amendments of the Company's stock options plans. The
Compensation Committee held three meetings during the last fiscal year.

The Board of Directors held a total of five meetings during the last fiscal
year. Each director attended all of the meetings of the Board and the Committees
on which he served, except for Mr. Fribourg and Mr. Bentley who attended four of
the five Board meetings and Mr. Menendez who attended two of the five Board
meetings.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based on its review of copies of Forms 3, 4 and 5 filed by the officers and
directors of the Company with the Securities and Exchange Commission, the
Company believes that all such Forms required to be filed with respect to the
fiscal year ended May 31, 1997 were timely filed pursuant to Section 16 of the
Securities Exchange Act of 1934 with the exception of: a) filing of a Form 4 by
Henry W. Chin with respect to the granting of 15,000 stock options in October
1996 (which was filed within 30 days of the due date); b) filings of Form 5 by
Gordon S. Marshall, Robert Rodin, Richard D. Bentley and Henry W. Chin with
respect to the annual report of beneficial ownership (which were filed within 15
days of the due date).

REMUNERATION OF DIRECTORS

Directors who are employees receive no additional compensation for servicing
as directors. Except for Mr. White, all outside directors receive monthly
retainers of $1,500. As Chairman of the Compensation Committee, Mr. White
receives a monthly retainer of $2,000. In addition, all outside directors
receive $1,500 for each meeting attended.

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information as of July 31, 1997 with
respect to each shareholder known by the Company to be the beneficial owner of
more than 5% of its outstanding Common Stock, and share ownership by all
executive officers and directors of the Company as a group.

AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- --------------------------------------------------------- ------------------ ------------

Strong Capital Management, Inc. 1,539,750(2) 9.3%
100 Heritage Reserve
Menomonee Falls, Wisconsin 53051
First Pacific Advisors, Inc. 1,404,700(3) 8.5%
11400 West Olympic Blvd
Suite 1200
Los Angeles, California 90064
The Prudential Insurance 1,323,550(4) 8.0%
Company of America
751 Broad Street
Newark, New Jersey 07102
Nicholas Company, Inc. 1,004,800(5) 6.0%
700 North Water Street
Milwaukee, Wisconsin 53202
All executive officers and directors as a group 449,514(6) 2.7%
(10 persons)

- ------------------------
(1) Except as provided under state community property laws and unless otherwise
indicated, each shareholder has sole voting and investment power with
respect to the shares shown as beneficially owned by that shareholder.

(2) Pursuant to a Schedule 13G dated February 13, 1997 and filed with the
Securities and Exchange Commission, Strong Capital Management, Inc. reported
beneficial ownership of over 5% of the Company's Common Stock. Based on
information subsequently obtained from Strong Capital Management, Inc., the
Company believes that on July 31, 1997, it had sole voting power with
respect to 1,341,850 shares and sole dispositive power with respect to
1,539,750 shares.

(3) Pursuant to a Schedule 13G dated February 12, 1997 and filed with the
Securities and Exchange Commission, First Pacific Advisors, Inc. reported
beneficial ownership of over 5% of the Company's Common Stock. Based on
information subsequently obtained from First Pacific Advisors, Inc. the
Company believes that on July 31, 1997, it had shared voting power with
respect to 444,600 shares and shared dispositive power with respect to
1,404,700 shares.

(4) Pursuant to a Schedule 13G dated January 27, 1997 and filed with the
Securities and Exchange Commission, The Prudential Insurance Company of
America reported beneficial ownership of over 5% of the Company's Common
Stock. Based on information subsequently obtained from The Prudential
Insurance Company of America, the Company believes that on July 31, 1997, it
had sole voting and dispositive power with respect to 822,500 shares and
shared voting power with respect to 470,950 shares and shared dispositive
power with respect to 501,050 shares.

(5) Pursuant to a Schedule 13G dated January 31, 1997 and filed with the
Securities and Exchange Commission, Nicholas Company, Inc. reported
beneficial ownership of over 5% of the Company's Common Stock. Based on
information subsequently obtained from Nicholas Company, Inc. the Company
believes that on July 31, 1997, it had no voting power but sole dispositive
power with respect to 1,004,800 shares.

(6) Includes 100,000 shares which are subject to options that are presently
exercisable or become exercisable on or before September 30, 1997.

EXECUTIVE OFFICERS

The following table sets forth certain information as of July 31, 1997 with
respect to those persons who are executive officers of the Company.

SHARES OF COMMON STOCK
BENEFICIALLY OWNED(1)
-------------------------
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
NAME AGE POSITION OWNERSHIP CLASS
- ------------------------ --------- ------------------------------------------------------ ------------ -----------

Gordon S. Marshall 77 Chairman of the Board 284,830 1.7%
Robert Rodin 43 President and Chief Executive Officer 98,500(2) *
Richard D. Bentley 57 Executive Vice President 17,084 *
Henry W. Chin 50 Vice President, Finance, Chief Financial Officer and
Secretary 36,000(3) *

- ------------------------
* Represents less than 1%.

(1) Except as provided under state community property laws and unless otherwise
indicated, each executive officer has sole voting and investment power with
respect to the shares shown as beneficially owned by him.

(2) Includes 70,000 shares which are subject to options that are presently
exercisable or become exercisable on or before September 30, 1997.

(3) Includes 30,000 shares which are subject to options that are presently
exercisable or become exercisable on or before September 30, 1997.

Mr. Marshall is the founder of the Company and has been its Chairman of the
Board since October 1954, and was Chief Executive Officer of the Company until
April 1994. Additionally, he served as President of the Company from April 1982
to June 1992. Mr. Marshall is also a member of the Board of Amistar Corporation.

Mr. Chin joined the Company as Corporate Controller in November 1984 and was
promoted to Vice President in August 1989 and to Chief Financial Officer in
October 1991. Mr. Chin is a Certified Public Accountant.

Each officer serves at the pleasure of the Board and, unless earlier
removed, is elected annually for a one year term.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table provides certain summary information concerning the
compensation for the last three fiscal years of the Chief Executive Officer and
each of the other executive officers of the Company.

ANNUAL COMPENSATION(1) LONG-TERM
COMPENSATION(2)
---------------------- ------------------
INCENTIVE STOCK OPTIONS
NAME AND PAYMENTS (NO. OF ALL OTHER
PRINCIPAL POSITION FISCAL YEAR SALARY (3) OPTIONS)(4) COMPENSATION(5)(6)
- ------------------------------------------------ ----------- ---------- ---------- ------------------ -------------------

Gordon S. Marshall (7) 1997 $ 542,500 $ 153,630 -- $ 4,750
Chairman of the Board 1996 525,000 240,698 -- 3,731
1995 510,417 197,845 -- 4,501
Robert Rodin 1997 750,000 313,846(8) -- 58,784(9)
President and 1996 645,833 279,747 50,000 5,642
Chief Executive Officer 1995 458,333 225,283 -- 4,620
Richard D. Bentley 1997 361,000 102,932 -- 29,374(9)
Executive Vice President 1996 361,000 165,504 -- 9,058
1995 340,000 131,354 -- 4,858
Henry W. Chin 1997 239,000 93,144(8) 15,000 22,315(9)
Vice President, Finance, 1996 225,000 101,625 -- 5,756
Chief Financial Officer 1995 197,500 76,098 20,000 4,802
and Secretary

- ------------------------
(1) The amounts included in this column for each of the named executive officers
do not include the value of certain perquisites which in the aggregate did
not exceed the lower of $50,000 or 10% of each named executive's aggregate
fiscal 1995, 1996 or 1997 salary and bonus compensation.

(2) The Company did not make any payments or awards that would be classifiable
under the "Restricted Stock Award" and "LTIP Payout" columns otherwise
required to be included in the table by the applicable Securities and
Exchange Commission ("SEC") disclosure rules.

(3) The Company has a profit sharing plan in which all full-time employees are
participants and is based on the Company's pre-tax profits. Under this
profit sharing plan, the Company's officers can earn up to 80% of their base
salaries as incentive compensation.

(4) Represents shares of stock underlying options granted under the Marshall
Industries 1992 Stock Option Plan (the "1992 Stock Option Plan"). There were
no individual grants of stock options in tandem with stock appreciation
rights ("SAR's") or freestanding SAR's made during the fiscal years ended
May 31, 1995, 1996 or 1997 to the above-named executive officers.

(5) Includes amounts contributed by the Company under the Marshall Industries
Tax Deferred Profit Sharing Plan which provides for participation by any
employee of Marshall who has completed six months of employment. Each
participant may defer from 2% to 12% of his earnings each payroll period,
the amount of which is placed by the Company in a nonforfeitable, fully
vested account on the employee's behalf. Under the tax laws, the maximum
amount which can be deferred for calendar years 1995, 1996 and 1997 were
$9,240, $9,500 and $9,500, respectively. The Company contributes quarterly
an amount equal to 50% of the employee's contributions in the quarter up to
a maximum amount equal

to 3% of the employee's earnings in the quarter. The vesting for the
Company's contributions is at 20% for each year of service with the Company.
The employer contributions for fiscal 1997 for Messrs. Marshall, Rodin and
Bentley were $4,750 each and $4,171 for Mr. Chin.

(6) In 1992, the Board authorized increased amounts of life insurance for
Messrs. Rodin, Bentley and Chin at a total annual premium cost of
approximately $7,000. In addition, because the annual premium for a
$1,000,000 insurance policy on Mr. Marshall's life would be $70,000 to
$80,000, it was deemed preferable to provide a widow's benefit of $200,000
per year to Mrs. Marshall if she survives Mr. Marshall. The present value of
that benefit on an actuarial basis is less than $400,000.

(7) See Certain Relationships and Related Transactions.

(8) In addition to their participation in the Company's profit sharing plan, the
Board of Directors awarded Messrs. Rodin and Chin discretionary bonuses of
$100,000 and $25,000, respectively. Mr. Rodin's bonus was paid in fiscal
1997. The amount listed includes Mr. Chin's bonus that was earned in fiscal
1997 and will be paid in fiscal 1998.

(9) During fiscal 1997 the Company amended its vacation policy. In connection
with the change in policy, all employees with vacation accrued in excess of
the maximum were given a one time excess vacation payment. Messrs. Rodin,
Bentley and Chin received $52,904, $19,904, and $17,124, respectively.

STOCK OPTION PLANS

Under the outstanding option agreements under the Company's stock option
plans, if there is a change in control of the Company (as defined in the plans),
all options become immediately exercisable.

STOCK OPTION GRANTS IN LAST FISCAL YEAR

The following table provides information with respect to the stock option
grants made during the 1997 fiscal year under the Company's stock option plans
to the named executive officer:

POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
----------------------------------------------------------- ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES % OF TOTAL APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE OR FOR OPTION TERM
OPTIONS TO EMPLOYEES IN BASE EXPIRATION ----------------------
GRANTED(1)(2) FISCAL YEAR PRICE(3) DATE 5%(4) 10%(4)
--------------- --------------- ------------ ----------- ---------- ----------

Henry W. Chin 15,000 43% $ 30.125 10/22/06 $ 284,200 $ 720,300

- ------------------------
(1) Represents options to purchase shares of Common Stock granted under the 1992
Stock Option Plan. The options will become exercisable in four equal and
successive annual installments, with the first such installment to become
exercisable one year after the grant date. The grant date is October 22,
1996.

(2) Under the terms of the Company's stock option plans, the Compensation
Committee retains discretion, subject to plan limits, to modify the terms of
outstanding options and to reprice options.

(3) At fair market value at date of grant.

(4) Represents gain that would be realized assuming the options were held for
the entire ten-year option period and the stock price increased at annual
compounded rates of 5% and 10%. Actual gains, if any,

on stock option exercises and Common Stock holdings will be dependent on
overall market conditions and on the future performance of the Company and
its Common Stock. There can be no assurance that the amounts reflected in
this table will be achieved.

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES

The following table provides information concerning the exercise of stock
options during the 1997 fiscal year by each of the named executive officers and
the year-end value of their unexercised options.

NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES AGGREGATE OPTIONS AT FISCAL YEAR END FISCAL YEAR END(2)
ACQUIRED ON VALUE -------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- ----------- ------------ ----------- ------------- ------------ -------------

Gordon S. Marshall 62,500 $ 1,391,000 0 0 $ 0 $ 0
Robert Rodin -- -- 70,000 170,000 1,019,813 2,858,438
Richard D. Bentley -- -- 0 120,000 0 2,685,000
Henry W. Chin -- -- 30,000 25,000 558,750 205,000

- ------------------------
(1) Based on the fair market value of the shares on the exercise date less the
exercise price paid for the shares.

(2) Based on the fair market value of the shares or $36.375 per share on the
last day of the fiscal year less the exercise price payable for such shares.

EMPLOYEE AGREEMENTS

The Company has entered into Change In Control Agreements with its executive
officers, Messrs. Marshall, Rodin, Bentley and Chin. Each of these agreements
provides that should there be a "change in control" (as defined), and the
officer's employment is terminated within twenty four months of any change in
control either (i) involuntarily, without just cause, or (ii) voluntarily, if
the officer has determined in good faith that his duties have been altered in a
material respect or there has been a material reduction in, or shift in the
composition, of his compensation or the officer is required to be based at any
office or location more than thirty miles from the Company's corporate
headquarters immediately preceding the change in control, then upon termination,
the officer would be entitled to receive cash compensation subject to a
non-compete provision. Mr. Marshall's agreement provides for a one-time cash
payment equal to the product of five times the greater of the compensation for
the last full calendar year or $750,000. The agreements with Messrs. Rodin and
Chin provide for a one time payment equal to the product of 36 times for Mr.
Rodin and 24 times for Mr. Chin the highest monthly base salary paid or payable
during the 12 month period immediately preceding the month of termination. In
addition, Messrs. Rodin and Chin would receive a one-time cash payment equal to
the product of three times for Mr. Rodin and two times for Mr. Chin the average
annual bonus for the last three and two full fiscal years, respectively, before
the change in control date. Mr. Bentley's agreement provides for a one-time cash
payment equal to the product of 2 times the greater of base salary, bonuses and
other compensation for the last full calendar year before Mr. Bentley's
termination or $500,000. The agreement with Mr. Bentley also provides for him to
elect retirement from the Company at age 59 and become a consultant to the
Company at a monthly amount equal to one-twenty fourth of the payment that would
have been paid under a change in control, as described above, up to a twenty
four month period. This consulting arrangement with Mr. Bentley would terminate
in the event of Mr. Bentley's death or disability. Following such terminations
under these agreements, the officers and their families will be entitled to all
benefits that are generally applicable to an executive of the Company up to
three years for Messrs. Marshall and Rodin and two years for Messrs. Bentley and
Chin. Pursuant to each of the agreements, upon a change in control, the Company
shall cause the vesting of any stock options held to be accelerated to the
change in control date and in the case of Mr. Bentley's agreement, the Company
shall cause the vesting of any stock options to be accelerated upon his
retirement date. The total payments payable under these agreements could be
reduced in the event that all or a portion of such payments would be subject to
the parachute provisions of Section 280G (limiting deductibility) and Section
4999 (providing for an excise tax on the recipient) of the Internal Revenue
Code. Such reduction is designed to produce the maximum after-tax benefit to the
recipient of the payments. A "change of control" of the Company is generally
defined as (i) any approval by the shareholders of any consolidation, merger,
reorganization or sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), other than a Business
Combination in which the holders of the Company's common stock immediately prior
to the Business Combination have at least seventy percent (70%) ownership of the
voting capital stock of the surviving corporation immediately after the Business
Combination, no person beneficially owns 30 percent or more of the Company's
outstanding common stock and at least a majority of the Board of Directors
remains in place, (ii) shareholder approval of any plan for the liquidation or
dissolution of the Company, (iii) any person becoming the beneficial owner of
thirty percent (30%) or more of the Company's outstanding common stock or voting
securities and the conditions of clause (iv) below are satisfied within six
months thereafter, or (iv) individuals who, as of the date of the agreement,
constitute the entire Board of Directors shall cease for any reason to
constitute a majority thereof unless the election, or the nomination for
election by the Company's shareholders, of each new director was approved by a
vote of at least a majority of the directors who were on the Board as of the
date of the agreement. Under the terms of the agreements, an officer may

be terminated without liability to the Company due to disability or for "cause",
defined generally as (i) the willful and continued failure to perform his or her
duties, or (ii) the willful engagement in misconduct which is materially
injurious to the Company.

The agreements will automatically be extended for one additional year at
their expiration dates unless terminated earlier due to termination of the
officer, death or disability of the officer or both parties agree to terminate
the Agreements with 6 months' written notice prior to the expiration dates.

With shareholders' approval, the Company amended its Articles of
Incorporation in 1988 to limit the liability of the Company's directors,
officers, and other agents to the extent permitted under California law. On
October 22, 1996, the Company entered into indemnification agreements with each
of its directors and officers: Gordon S. Marshall, Robert Rodin, Richard D.
Bentley, Henry W. Chin, Richard C. Colyear, Jean Fribourg, Lathrop Hoffman, Jose
Menendez, Raymond G. Rinehart and Howard C. White (each an "Indemnitee").
Pursuant to the indemnification agreements, the Company has agreed to indemnify
each Indemnitee to the fullest extent permitted by law against expenses
(including attorneys' fees), judgements, fines and/or amounts paid in settlement
actually and reasonably incurred by the Indemnitee in connection with actions,
suits or proceedings involving the Indemnitee and relating to the Indemnitee's
service to the Company.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In addition to the distribution of component parts, the Company provides a
variety of value-added services to its customers. Through the use of third party
contractors, the Company provides cable assembling and manufacturing
capabilities. One of the third party contract manufacturing arrangements is with
Amistar, a company of which Mr. Marshall is a director and a substantial
shareholder. Under this arrangement, Marshall accepts orders from its customers
and provides the necessary components, which Amistar then "mounts" on circuit
boards. Marshall pays Amistar for its services and invoices the customers for
the completed product. The Company believes that the amounts paid to Amistar are
not in excess of the amounts that would be charged by unaffiliated manufacturers
for the same services. During the fiscal years ended May 31, 1995, 1996 and 1997
the Company paid Amistar approximately $1,043,000, $655,000 and $941,000
respectively, under this arrangement.

In connection with the Company's Investment in SEI (which has been described
in the Company's Annual Report on Form 10-K), the Company invested approximately
$28 million in SEI in the form of an interest bearing convertible note in 1994.
The note was outstanding until June 30, 1997 at which time the Company converted
its note plus accrued interest into a 16% equity interest in SEI's electronics
distribution companies.

The Company's Board of Directors have approved the sale of the Company's
condominium to Mr. Bentley for $165,000. The sales price was based on an
independent appraisal of the condominium. The Company does not own any other
such properties.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS HAS FURNISHED THE
FOLLOWING REPORT ON EMPLOYEE COMPENSATION. SUCH REPORT WILL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING THIS PROXY
STATEMENT INTO ANY FILING BY THE COMPANY UNDER THE SECURITIES ACT OF 1933 OR
UNDER THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED SOLICITING MATERIAL OR BE DEEMED FILED UNDER SUCH ACTS.

The Compensation Committee consists entirely of independent outside
directors and has responsibility for administering the Company's stock option
plans and setting the senior executives' annual salaries.

The Company's executive compensation programs are intended to enable it to
attract and retain talented executives and to reward them appropriately. The
Compensation Committee attempts to determine the appropriate total levels of
compensation, as well as the appropriate mix of basic salary, short-term
incentives and long-term incentives.

All of the Company's executive officers, as well as all of its full-time
employees, participate in the Company's profit sharing plan. The plan is based
on pre-tax profits of the Company. The Company's officers can earn up to 80% of
their base salaries as profit sharing compensation.

In making its salary, bonus and stock option decisions, the Compensation
Committee considers a number of factors. However, its ultimate determination is
a subjective one and is based on the total mix of information. The Compensation
Committee reviews the compensation practices of five of the Company's
competitors as reported in their public filings. Those competitors are Arrow
Electronics, Inc., Avnet, Inc., Bell Industries, Pioneer-Standard Electronics,
Inc. and Wyle Electronics. These companies are included in the peer group
comparisons elsewhere in this Proxy Statement. The Compensation Committee also
compares the Company's short and long-term results with the performance of those
same competitors, the industry in general and various other related data, to
ensure a pay-for-performance linkage. The primary performance measures examined
are earnings results, total shareholder return and the strength of the Company's
strategic position. By these measures, the Compensation Committee believes that
the Company achieves above average to superior results.

The Compensation Committee meets without the CEO to evaluate his
performance, and with the CEO to evaluate the performance of other executive
officers. The Compensation Committee considers the tax deductibility of
compensation to the Company in making compensation decisions, however, such
deductibility is only one factor and is not the determining factor. During the
fiscal year, the Compensation Committee awarded Messrs. Rodin and Chin
discretionary bonuses of $100,000 and $25,000, respectively. A salary increase
for Mr. Marshall was approved during the October 22, 1996 Compensation Committee
meeting. The Committee believes that the total compensation of its executives is
competitive and appropriately rewards their achievements.

Howard C. White, Chairman
Richard C. Colyear
Lathrop Hoffman
Raymond G. Rinehart

COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN AMONG
MARSHALL INDUSTRIES, S&P 500 INDEX AND PEER GROUP INDEX

The following graph compares cumulative total shareholder return on the
Company's Common Stock for the periods indicated with the cumulative total
return of companies on the Standard & Poor's 500 Stock Index and a group
consisting of the Company's peer corporations. The corporations making up the
peer companies group are the 34 electronic component distributor companies
included in SIC Code 5065 -- Electronic Parts & Equipment, N.E.C. The
information for the graph was provided by Media General Financial Services. This
graph assumes that $100 was invested on June 1, 1992 in the Company and each of
the two indices, and that dividends were reinvested. It should be noted that the
Company has not paid dividends on its Common Stock, and no dividends are
included in the representation of the Company's performance.

COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG
MARSHALL INDUSTRIES, S&P 500 INDEX AND SIC CODE INDEX

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

DOLLARS MARSHALL INDUSTRIES SIC CODE INDEX S&P 500 INDEX

1992 100.00 100.00 100.00

1993 126.52 113.67 111.63

1994 148.48 110.66 116.39

1995 163.64 136.74 139.88

1996 190.15 173.39 179.67

1997 220.45 193.36 232.52

ASSUMES $100 INVESTED ON JUNE 1, 1992
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDED MAY 31, 1997

THE STOCK PRICE PERFORMANCE DEPICTED IN THE ABOVE GRAPH IS NOT NECESSARILY
INDICATIVE OF FUTURE PRICE PERFORMANCE. THE PERFORMANCE GRAPH WILL NOT BE DEEMED
TO BE INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT

INCORPORATING THIS PROXY STATEMENT INTO ANY FILING BY THE COMPANY UNDER THE
SECURITIES ACT OF 1933 OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO
THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY
REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED SOLICITING MATERIAL OR BE DEEMED
FILED UNDER SUCH ACTS.

PROPOSAL -- SELECTION OF INDEPENDENT AUDITORS

The Board of Directors of the Company has appointed Arthur Andersen LLP as
independent accountants for the Company for the fiscal year ending May 31, 1998.
Representatives of Arthur Andersen LLP are expected to be present at the Annual
Meeting and will have an opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions.

THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT THE SHAREHOLDERS VOTE
FOR THE PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP.

PROPOSAL -- APPROVAL OF THE MARSHALL INDUSTRIES 1997
STOCK OPTION PLAN

The Board of Directors (the "Board") believes that the various stock option
plans adopted by the Company have been worthwhile in attracting and retaining
key employees and executives. At the annual meeting, shareholders will be asked
to approve the Marshall Industries 1997 Stock Option Plan (the "1997 Plan"),
adopted by the Board on August 26, 1997.

The provisions of the 1997 Plan, including a description of the options that
may be granted thereunder, are summarized below. This summary is qualified in
its entirety by the full text of the 1997 Plan, a copy of which is included as
Exhibit A to this Proxy Statement. Capitalized terms are used as defined in the
1997 Plan.

Telephone inquiries concerning the 1997 Plan may be directed to Henry W.
Chin, the Vice President, Finance, Chief Financial Officer and Secretary of the
Company, at (626) 307-6000.

SUMMARY DESCRIPTION OF THE 1997 PLAN

The 1997 Plan provides for the discretionary grant of options to acquire
shares of the Company's Common Stock ("Options") to key full-time employees of
the Company (including officers and directors who are full-time employees) and
to directors who are not officers or employees of the Company ("Non-Employee
Directors"). The purpose of the 1997 Plan is to promote the interests of the
Company and its shareholders by providing additional incentives to those key
employees and directors of the Company whose judgement, initiative and efforts
are largely responsible for the Company's successful operation. By encouraging
ownership of the Company's Common Stock, the Company seeks to motivate these key
employees and directors by giving them an increased proprietary interest in the
Company and its success. The 1997 Plan is also intended to enable the Company to
compete with other enterprises for the services of new personnel needed to carry
on its operations and to ensure the continued development of its business.

ADMINISTRATION. The 1997 Plan will be administered by a committee of the
Board, currently the Company's Stock Option and Compensation Committee (the
"Committee") which consists of four members of the Board identified above at
page 4.

The Committee determines the number of shares that are to be subject to
Options, the exercise price of such Options, and the other terms and conditions
of Option grants.

ELIGIBILITY. Key full-time employees (including officers and directors who
are full-time employees) and Non-Employee Directors of the Company are eligible
to receive Options under the 1997 Plan. As of July 31, 1997, there were 4
officers, of which 3 are directors, 6 Non-Employee Directors and approximately
50 other key employees eligible to participate in the 1997 Plan. The Committee
has the power to select which eligible persons will be granted Options. Status
as an eligible person is not a commitment that any Option will be granted to
such eligible person (or to eligible persons generally).

NON-TRANSFERABILITY. Options granted under the 1997 Plan are not
transferable by the holder other than by will or the laws of descent and
distribution and are generally exercisable, during his or her lifetime, only by
the holder; any amounts payable or shares issuable pursuant to an Option will be
paid only to the participant or the participant's beneficiary.

AUTHORIZED SHARES. The aggregate number of shares of Common Stock that may
be issued upon exercise of Options granted under the 1997 Plan is limited to
500,000 shares, subject to certain adjustments described below. For purposes of
determining the number of shares to charge against this share limit, shares
relating to any Option (or part of an Option) that is not exercised or which
expires or is cancelled will again become available for Option purposes under
the 1997 Plan.

As is customary in option plans of this nature, the number and kind of
shares available under the 1997 Plan are subject to adjustment in the event of
certain reorganizations, mergers, combinations, consolidations,
recapitalizations, reclassifications, stock splits, stock dividends, asset sales
or other similar events which change the number or kind of shares outstanding;
or extraordinary dividends or distributions of property to the stockholders.

STOCK OPTIONS. An Option is the right to purchase shares of Common Stock at
a future date at a specified price (the "Exercise Price").

An Option may either be an Incentive Stock Option (an Option intended to be
an incentive stock option under the Code), or a Nonqualified Stock Option.
Incentive Stock Option benefits are taxed differently from nonqualified stock
options, as described under "Federal Income Tax Treatment of Options under the
1997 Plan" below. Incentive Stock Options are also subject to more restrictive
terms and are limited in amount by the Code, and may only be granted to
employees of the Company.

The Exercise Price of an Incentive Stock Option may not be less than the
Fair Market Value of the shares subject to the Option on the date of grant.
However, the Exercise Price of Nonqualified Stock Options may be at any price
determined by the Committee.

Full payment for shares purchased on the exercise of any Option must be made
at the time of such exercise in cash or by check. The Committee may also approve
(in specific cases only or generally) payment in the form of (i) a promissory
note by the Option holder in favor of the Company or other third party
financing, or (ii) in shares of Common Stock having a Fair Market Value equal to
the Exercise Price. In addition, the Committee may permit Option holders to
satisfy any applicable tax withholding requirements upon exercise of an Option
by (i) an offset or surrender of stock or delivery of already owned stock, or
(ii) in the form of a promissory note by the Option holder in favor of the
Company or other third party financing.

Subject to early termination or acceleration provisions (which are
summarized below), an Option generally will be exercisable, in whole or in part,
from the date specified in the related Option Agreement until the expiration
date determined by the Committee. Generally speaking, an Incentive Stock Option
will

not be exercisable after more than 10 years after its date of grant and a
Nonqualified Stock Option will not be exercisable after more than 10 years after
the date it becomes exercisable. The rate at which an Option vests or becomes
exercisable will be established by the Committee and set forth in the related
Option Agreement.

The Board and Committee may modify or terminate any outstanding Option held
by a participant, subject only to the general limitations under the 1997 Plan or
under applicable law and, in the case of a materially adverse change, with the
consent of the holder.

TERMINATION OF EMPLOYMENT. On or after specified periods (set forth in
Section 6.6 of the Plan) following a participant's termination of employment or
services for any reason, Options will terminate. Such periods cannot exceed the
expiration dates of the Options and the Committee, in its discretion, may
provide for shorter periods with respect to an individual Option (which
provision must be set forth in the applicable Option Agreement). The Committee
may, in its discretion, accelerate vesting or exercisability of any Option held
by a participant who dies or becomes permanently disabled while employed by or
providing services to the Company.

MODIFICATION OF OPTIONS. Subject only to certain Plan limits, the Committee
may (i) extend or accelerate the exercisability or extend the term of any
Option, or (ii) modify or renew outstanding Options (including the ability to
grant a new Option upon the surrender of an existing Option, and on different
terms).

ACCELERATION AND POSSIBLE EARLY TERMINATION OF OPTIONS. Upon the approval
by the shareholders of a dissolution or liquidation, certain agreements to merge
or consolidate, sale of substantially all of the Company's assets or certain
other "Change in Control Events" (as defined in the Plan), each Option will
become immediately exercisable. An Option which has been accelerated in this
manner will terminate upon a dissolution of the Company, a reorganization or
other event in which the Company does not survive, or upon the consummation of a
Change in Control Event approved by the Board (unless provision has been made
for the assumption or survival of the Option).

TERMINATION OF OR CHANGES TO THE 1997 PLAN. The Board may, at any time,
terminate or from time to time amend, modify or suspend the 1997 Plan in whole
or in part. To the extent then required by any applicable law, any amendment
will be subject to shareholder approval. Unless previously terminated by the
Board, no Options may be granted under the 1997 Plan after the tenth anniversary
of its adoption by the Board. Options may be amended subject to the consent of
the holder if the amendment materially and adversely affects the holder.

SECURITIES UNDERLYING OPTIONS. The market value of the Common Stock as of
July 31, 1997 was $40.5625 per share. Upon receipt of shareholder approval, the
Company plans to register under the Securities Act of 1933 the shares available
under the 1997 Plan.

FEDERAL INCOME TAX TREATMENT OF OPTIONS UNDER THE 1997 PLAN

With respect to Nonqualified Stock Options, the Company is generally
entitled to deduct an amount equal to the difference between the Option's
Exercise Price and the Fair Market Value of the shares at the time of exercise.
With respect to Incentive Stock Options, the Company is generally not entitled
to a similar deduction either upon grant of the Option or at the time the Option
is exercised. If shares acquired upon the exercise of an Incentive Stock Option
are not held for specified qualifying periods, however, the difference

between the Fair Market Value of the shares at the date of exercise (or, if
lower, the sale price) and the cost of such shares is taxed as ordinary income
(and the Company will receive a corresponding deduction) in the year the shares
are sold.

If, as a result of the occurrence of a change in control as used under the
Code, a participant's benefits are increased (e.g., an Option holder's Options
or rights become exercisable, the restrictions on Options lapse, or shares are
issued), the participant may be deemed to have received a "parachute payment".
If the economic value of the acceleration, and/or grant, together with any other
benefits which are deemed to be contingent upon the change in control, equals or
exceeds a threshold amount equal to 300% of the person's average annual taxable
compensation over the five calendar years preceding the year in which the change
in control occurs, the excess of the total of such amounts over such person's
average annual taxable compensation generally will be subject to a 20%
non-deductible excise tax in addition to any income tax payable. The Company
will not be entitled to a deduction for any benefits or payments that are
subject to the excise tax.

Further, if the compensation attributable to Options granted to persons
subject to the limits contained in Section 162(m) of the Code ("Section 162(m)")
is not "performance-based" within the meaning of Section 162(m), the Company may
not be permitted to deduct that compensation to the extent the individual's
aggregate compensation exceeds $1,000,000 in any year. Options granted at Fair
Market Value on the date of grant are intended to be performance-based
compensation. However, in light of uncertainties regarding the ultimate
interpretation of Section 162(m), no assurances can be given that all
compensation intended to qualify as "performance-based compensation" under
Section 162(m) will in fact be deductible.

The above tax summary is based upon federal income tax laws in effect as of
July 31, 1997.

SPECIFIC BENEFITS

The number, amount and type of Options to be received by or allocated to
eligible persons under the 1997 Plan cannot be determined at this time. The
Committee has not yet considered any specific Options under the additional
authority of the 1997 Plan.

VOTE REQUIRED; RECOMMENDATION OF YOUR BOARD OF DIRECTORS "FOR" THIS PROPOSAL

The Board believes that the 1997 Plan will promote the interests of the
Company and its shareholders and continue to enable the Company to attract,
retain and reward persons important to the Company's success and to provide
incentives based on increases in shareholder value.

Approval of the 1997 Plan requires the affirmative vote of holders of a
majority of the shares present or represented and entitled to vote at the
meeting, provided the total vote cast on the proposal represents over 50% of the
outstanding shares.

THE BOARD HAS APPROVED AND RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
1997 PLAN. Proxies solicited by the Board will be so voted unless shareholders
specify otherwise in their proxies. Broker non-votes and abstentions on this
proposal have the effect described on page 1. All directors and executive
officers of the Company are eligible for Options under the 1997 Plan and thus
have a personal interest in the proposal.

SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING

Copies of resolutions proposed by shareholders to be presented at the 1998
Annual Meeting of Shareholders must be received by the Company at its corporate
headquarters, 9320 Telstar Avenue, El Monte, California 91731-2895 on or before
May 2, 1998 to have such resolutions included in the proxy statement and form of
proxy for such Annual Meeting.

OTHER MATTERS

The management does not know of any other matters to be acted upon at the
Annual Meeting. If any other matters should properly come before the Annual
Meeting, or an adjournment thereof, the proxies will be voted with respect
thereto in accordance with the discretion of the proxyholders.

GORDON S. MARSHALL
Chairman

FORM 10-K

The Company's Annual Report to Shareholders for the fiscal year
ended May 31, 1997 includes a copy of its Annual Report on Form 10-K,
including the financial statements and schedules thereto, filed with the
Securities and Exchange Commission.

EXHIBIT A

MARSHALL INDUSTRIES
1997 STOCK OPTION PLAN

1. PURPOSE

The purpose of this Marshall Industries 1997 Stock Option Plan is to promote
the interests of Marshall Industries and its shareholders by providing
additional incentives to those key employees and directors of the Company whose
judgement, initiative and efforts are largely responsible for Marshall
Industries' successful operation. By encouraging ownership of its Common Stock,
the Company seeks to motivate these key employees and directors by giving them
an increased proprietary interest in Marshall Industries and its success. This
Plan is also intended to enable Marshall Industries to compete with other
enterprises for the services of new personnel needed to carry on its operations
and to ensure the continued development of its business.

2. CERTAIN DEFINITIONS

The following terms used in this Plan are defined as follows:

2.1 "BOARD" means the Board of Directors of Marshall Industries as elected
and constituted from time to time.

2.2 "CHANGE IN CONTROL EVENT" means any of the following:

(1) The acquisition by any individual, entity, or group (within the
meaning of Section 13(d) or 14(d)(2) of the Exchange Act, each a "Person")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 30% or more of either (i) the then outstanding shares
of Common Stock (the "Outstanding Company Common Stock"), or (ii) the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however that any of the
preceding events shall not constitute a Change in Control Event unless,
within 6 months of such an event, the conditions of paragraph (2) below are
satisfied; and provided further, that for purposes of this paragraph (1),
the following acquisitions shall not constitute a Change in Control Event:

(i) any acquisition directly from the Company (including, without
limitation, a secondary offering of securities made by the Company);

(ii) any acquisition by the Company (including, without limitation, a
repurchase or redemption of Company securities by the Company);

(iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by
the Company; or

(iv) any acquisition by any corporation pursuant to a transaction
which complies with subparagraphs (i), (ii), and (iii) of paragraph (3)
below;

(2) The failure of individuals who, as of the date hereof, constitute
the Board (the "Incumbent Board") for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
member of the Board subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, has been approved by
a vote of at least a majority of the members then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial

assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of members or other actual
or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

(3) Approval by the shareholders of the Company of a reorganization,
merger, consolidation, or sale or other disposition of all or substantially
all of the assets of the Company (a "Business Combination"), in each case,
unless, following such Business Combination:

(i) all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than
70% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be;

(ii) no Person (excluding any employee benefit plan (or related
trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination; and

(iii) at least a majority of the members of the board of directors of
the corporation resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

(4) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

2.3 "CODE" means the Internal Revenue Code of 1986, as amended, or any
successor statute.

2.4 "COMMITTEE" means the Board or the Stock Option Committee appointed by
the Board to administer this Plan, which committee shall consist of only two or
more directors or such greater number of directors as may be required under
applicable law, each of whom (a) in respect of any decision at a time when the
Participant affected by the decision may be subject to Section 162(m) of the
Code, shall be an "outside" director within the meaning of Section 162(m) of the
Code, and (b) in respect of any decision affecting a transaction at a time when
the Participant involved in the transaction may be subject to Section 16 of the
Exchange Act, shall be a "non-employee director" within the meaning of Rule
16b-3(b)(3) promulgated under the Exchange Act.

2.5 "COMMON STOCK" means the common stock of the Company.

2.6 "COMPANY" means Marshall Industries, a California corporation.

2.7 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

2.8 "FAIR MARKET VALUE" means (a) if the Common Stock is then listed on an
established stock exchange or exchanges, the last reported closing price per
share on the principal exchange on which the Common Stock is traded, as reported
in The Wall Street Journal; or (b) if the Common Stock is not then listed on an
exchange, the average of the last reported closing bid and asked prices per
share for the Common Stock in the over-the-counter market as quoted on NASDAQ;
or (c) if the Common Stock is not then listed on an exchange or listed on
NASDAQ, an amount determined in good faith by the Committee.

2.9 "INCENTIVE STOCK OPTION" means an Option to purchase shares of the
Company's Common Stock which meets the requirements of Section 422 of the Code
and the regulations issued thereunder, as such Section and regulations may be
amended from time to time.

2.10 "NON-EMPLOYEE DIRECTOR" means a member of the Board who is not an
officer or employee of the Company.

2.11 "NONQUALIFIED STOCK OPTION" means an Option to purchase shares of the
Company's Common Stock which is not an Incentive Stock Option, and shall include
any Option intended as an Incentive Stock Option that fails to meet the
applicable legal requirements thereof. Any Option which is not expressly
designated as an Incentive Stock Option shall be deemed to be designated and
intended as a Nonqualified Stock Option.

2.12 "OPTION" or "OPTIONS" means Incentive Stock Options and Nonqualified
Stock Options granted pursuant to this Plan individually or collectively.

2.13 "OPTION AGREEMENT" means the written Stock Option Agreement which
evidences the terms and conditions of each Option granted to a Participant by
the Committee.

2.14 "PARTICIPANT" or "OPTIONEE" means a full-time employee of the Company
or a Non-Employee Director who is eligible pursuant to Article 5 of this Plan to
receive Options under this Plan and who is granted one or more Options under
this Plan.

2.15 "PERMANENT DISABILITY" or "PERMANENTLY DISABLED" means a physical or
mental impairment as defined in Section 22(e)(3) of the Code.

2.16 "PLAN" means this Marshall Industries 1997 Stock Option Plan.

2.17 "SUBSIDIARY" means any corporation or other entity at least 50% of the
outstanding voting stock or voting power of which is beneficially owned directly
or indirectly by the Company.

3. ADMINISTRATION

3.1 THE STOCK OPTION COMMITTEE. This Plan shall be administered by the
Committee. The Board, from time to time, in its sole discretion, may remove
members from, or add members to, the Committee. Vacancies on the Committee
however caused shall be filled by the Board. The Committee shall select one of
its members as chairman and shall hold meetings at such times and places as it
may determine. A majority of the Committee shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which there is a
quorum, or acts reduced to or approved in writing by a majority of the members
of the Committee, shall be valid acts of the Committee. The Board may at any
time change or assume the administration of this Plan.

3.2 AUTHORITY OF THE COMMITTEE. Subject to the express provisions and
limitations of this Plan, the Committee shall have the sole power to grant
Options pursuant to this Plan, including the determination of the persons to
whom Options shall be granted, the type of Options to be granted, the exercise
price of each

Option, the period during which each Option may be exercised, the terms on which
each Option may be exercised, and the number of shares to be subject to each
Option. In addition, the Committee shall have the sole power and discretionary
authority, subject to the express provisions and limitations of this Plan, to
construe this Plan and the Option Agreements entered into with respect to
Options granted hereunder, to adopt, prescribe, amend and rescind rules and
regulations relating to this Plan, to make all determinations necessary or
advisable for administering this Plan, to approve the forms of Option Agreements
(which need not be identical), and to extend or accelerate the exercisability or
extend the term of any or all outstanding Options (subject to the limits imposed
by Section 6.5). The interpretation by the Committee of any provision of this
Plan or of any Option Agreement entered into hereunder in respect of Incentive
Stock Options shall be in accordance with Section 422 of the Code and the
regulations issued thereunder, as such section or regulations may be amended
from time to time, in order that the Incentive Stock Options granted hereunder
and evidenced by such Option Agreements shall constitute "incentive stock
options" within the meaning of such section. The interpretation and construction
by the Committee of any provision of this Plan or of any Option granted
hereunder shall be final and conclusive, unless otherwise determined by the
Board. No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to this Plan or any Option granted
hereunder.

4. SHARES OF STOCK SUBJECT TO THE PLAN

The stock available for grant of Options under this Plan shall be shares of
the Company's authorized but unissued Common Stock. The aggregate number of
shares of Common Stock which may be issued upon the exercise of all Options
granted under this Plan shall not exceed 500,000 shares of Common Stock. The
maximum number of shares of Common Stock subject to those Options that are
granted during any calendar year to any individual shall be limited to 150,000
shares of Common Stock. Each of the two foregoing numerical limits shall be
subject to adjustment as contemplated by this Article 4 and Article 7. If any
Option granted under this Plan expires or terminates for any reason, the
unpurchased or unissued shares subject to such expired or terminated Option
shall again be available for the grant of Options under this Plan, as if no
Option previously had been granted with respect to such shares.

5. ELIGIBILITY

Key employees, including officers and directors who are full-time employees
of the Company and Non-Employee Directors of the Company shall be eligible to
receive Options under this Plan; provided, however, that (i) no person, who,
immediately after the grant of any Option, would own (within the meaning of
Section 422(b)(6) of the Code), directly or indirectly, stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company, shall be eligible to receive an Incentive Stock Option
under this Plan, unless at the time such Incentive Stock Option is granted, the
option price on the date of grant is at least one hundred ten percent (110%) of
the Fair Market Value of the shares subject to the Option and such Option by its
terms is not exercisable after the expiration of five (5) years from the date
such Option is granted, and (ii) Incentive Stock Options shall be granted only
to persons employed by the Company. A Participant may receive more than one
Option under this Plan, and a Participant may receive both Incentive Stock
Options and Nonqualified Stock Options under this Plan. Subject to the
foregoing, the Committee shall have full authority and discretion to select from
the eligible class of persons, those persons to whom Options shall be granted.
In making such determination, the Committee shall take into account the nature
of services rendered by the person in the past and presently being rendered and
the potential contribution by the person to the Company's success as well as
such other factors as the Committee deems relevant. Status as an eligible person
shall not be construed as a commitment that any Option will be granted under
this Plan to such person or to eligible persons generally.

6. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS

6.1 GRANTS. Subject to the express provisions and limitations of this
Plan, the Committee may grant Options to Participants in any of the following
forms: (a) Incentive Stock Options; (b) Nonqualified Stock Options; or (c) any
combination of Incentive Stock Options and Nonqualified Stock Options.

6.2 DURATION OF GRANTS. Options granted pursuant to this Plan must be
granted within ten (10) years from the date this Plan is adopted by the Board.

6.3 WRITTEN AGREEMENT. Each Option granted pursuant to this Plan shall be
evidenced by a written Option Agreement signed by an officer of the Company and
the Participant. Subject to the terms and conditions of the Plan, each Option
Agreement shall be in such form and shall contain such provisions consistent
with the Plan as the Committee shall from time to time approve. No Option
Agreement need be identical with any other Option Agreement executed pursuant to
this Plan; provided, however, that such varied or different terms and provisions
are not inconsistent with the purposes and provisions of this Plan.

6.4 NUMBER OF SHARES SUBJECT TO THE OPTION AND OPTION PRICE. Each Option
Agreement shall state the number of shares to which it pertains and the option
price, which shall be determined at the time of the grant of the Option. The
Committee shall have full authority and discretion in fixing the option price
for Nonqualified Stock Options. The option price for Incentive Stock Options
granted under this Plan shall be not less than one hundred percent (100%) of the
Fair Market Value of the shares covered by the Incentive Stock Option on the
date of grant. Subject to the foregoing, the Committee shall have full authority
and discretion in establishing the option price.

6.5 OPTION PERIOD. No Option shall be exercisable after the expiration of
the earliest of (a) ten (10) years after the date the Option is granted in the
case of an Incentive Stock Option or ten (10) years after the Option is first
exercisable in the case of a Nonqualified Stock Option; (b) three (3) months
after the date the Participant's employment or services with the Company
terminates if such termination is for any reason other than Permanent
Disability, death, or cause (as determined by the Board in its sole discretion);
(c) the date the Participant's employment or services with the Company
terminates if such termination is for cause, as determined by the Board, in its
sole discretion; or (d) one (1) year after the date the Participant's employment
or services with the Company terminates, if such termination is a result of
death or Permanent Disability; provided, however, that the Option Agreement for
any Option may, if so determined by the Committee, provide for shorter periods
in each of the foregoing instances.

6.6 TERMINATION OF PARTICIPANT'S EMPLOYMENT, DISABILITY, OR DEATH. If a
Participant ceases to be an employee of the Company (or, with respect to a
Non-Employee Director, ceases to be a member of the Board) for any reason (other
than dismissal for cause, as determined by the Board in its sole discretion)
while still living, any Option or unexercised portion thereof granted to the
Participant may, to the extent such Option would have been exercisable by the
Participant on the date on which he ceases to be an employee (or a Non-Employee
Director), be exercised by the Participant within three (3) months from the date
on which he ceases to be an employee (or a Non-Employee Director), but in any
event not later than the expiration date of the Option. Notwithstanding the
foregoing, if a Participant's employment or services with the Company is
terminated for cause as determined by the Board in its sole discretion, all
Options held by the Participant shall expire on the date of termination of such
employment and thereafter shall not be exercisable in whole or in part. If the
Participant dies or becomes Permanently Disabled while he is an employee of the
Company (or, with respect to a Non-Employee Director, while he is a member of
the Board), any Option or unexercised portion thereof granted to the
Participant, to the extent exercisable by him on the date of death or Permanent
Disability, may be exercised by the Participant, or if the Participant is then
deceased, by

the Participant's personal representative, heirs, or legatees, at any time prior
to the expiration of one (1) year from the date on which the Participant ceases
to be an employee (or a Non-Employee Director) of the Company but in any event,
not later than the date of the expiration of the Option. The Committee may
provide, in its sole discretion and in an Option Agreement or otherwise, that
upon a Participant's death or Permanent Disability while he is an employee (or a
Non-Employee Director) of the Company, such Participant's Option shall become
fully vested and exercisable.

6.7 EXERCISE OF OPTION. No Option shall be exercisable during the lifetime
of a Participant by any person other than the Participant. Any Option granted
under this Plan may be exercisable in whole or in part immediately upon the
grant thereof, or, in the discretion of the Committee, may be exercisable only
in installments, which installments may be equal or otherwise, and which
installments may vary as to the number thereof as well as to whether any
unexercised installments are cumulative throughout the life of a particular
Option. The Committee may, in its discretion, subsequent to the grant of any
Option, accelerate the date on which any or all of the installments may be
exercised. To the extent that a Participant has the right to exercise an Option
and purchase shares pursuant thereto, the Option may be exercised from time to
time by written notice to the Company, setting forth which Option is being
exercised and stating the number of shares being purchased with respect to the
Option, and accompanied by payment in full of the purchase price for such
shares.

6.8 MEDIUM AND TIME OF PAYMENT. The purchase price for any shares
purchased upon exercise of an Option granted under this Plan shall be paid in
full upon exercise of the Option in cash, by check in United States dollars, or,
at the discretion of the Committee, and upon such terms and conditions as the
Committee may approve, by transferring to the Company for redemption, Common
Stock of the Company at its Fair Market Value. Shares of Common Stock
transferred to the Company upon exercise of an Option shall not increase the
number of shares available for issuance under this Plan. If shares of Common
Stock of the Company are used in partial or in full payment for the shares to be
acquired upon exercise of the Option, such shares shall be valued for the
purpose of such exchange at their Fair Market Value as of the date the Option is
exercised. Any certificates for shares of outstanding Common Stock of the
Company used to pay the purchase price shall be duly endorsed by the registered
holder of the certificates or accompanied by satisfactory instruments of
transfer (with the signatures thereon guaranteed). If the certificates tendered
by the Participant in such payment cover more shares than are required for such
payment, the certificates shall be accompanied by instructions by the
Participant to the Company's transfer agent with respect to disposition of the
balance of the shares covered thereby.

6.9 LOANS TO PARTICIPANTS. The Company may make loans, or arrange for the
extension and maintenance of loans, to any Participant designated by the
Committee to permit said Participant to finance the purchase of shares upon the
exercise of any Option or to meet the immediate tax consequences of any Option
exercise. The Committee, in its sole discretion, shall determine all terms and
conditions of such loans, including the principal amount thereof, subject to
applicable regulations of the Federal Reserve Board and any other laws or
regulations in effect at the time such loan is made. No loan shall be made
hereunder if the receipt of such loan would disqualify an Incentive Stock Option
as an "incentive stock option" for purposes of Section 422 of the Code.

6.10 ADDITIONAL PROVISIONS. Each Option and the Option Agreements
evidencing such Options may contain such other terms, provisions and conditions
not inconsistent with the Plan as may be determined by the Committee, including
without limitation, restrictions upon the exercise of Options or restrictions
upon the sale, transfer or disposition of shares acquired pursuant to the
exercise of an Option. Any such Option

Agreement in respect of an Incentive Stock Option shall contain such limitations
and restrictions as shall be necessary in order that the Incentive Stock Option
will be an "incentive stock option" as defined in Section 422 of the Code, or to
conform to any change in the law.

6.11 DESIGNATION OF OPTIONS. Each Option granted pursuant to this Plan
shall be clearly identified as to its status as either an Incentive Stock Option
or a Nonqualified Stock Option, and such designation shall be set forth as to
each Option in each Option Agreement executed pursuant to this Plan.

6.12 MODIFICATION, EXTENSION OR RENEWAL OF OPTIONS. Subject to the terms
and conditions and within the limitations of this Plan, the Committee may
modify, extend or renew outstanding Options granted under this Plan, accept the
surrender of outstanding Options (to the extent not theretofore exercised), and
authorize the granting of new Options and substitutions therefor (to the extent
not theretofore exercised). The Committee, however, shall not modify any
outstanding Incentive Stock Option in any manner which would cause it to fail to
qualify as an "incentive stock option" within the meaning of Section 422 of the
Code. Notwithstanding the foregoing, no Committee modification of an Option
pursuant to the foregoing shall, without the consent of the Participant, alter
or impair in a manner materially adverse to the Participant any rights or
obligations under the Option.

6.13 TRANSFERABILITY OF OPTIONS. No Option granted under this Plan shall
be transferable by a Participant other than by will or by the laws of descent
and distribution. No transfer of an Option by will or by the laws of descent and
distribution shall be effective, nor shall any designation of a person who may
exercise the Option after the Participant's death be effective to bind the
Company unless the Company is furnished with a written notice thereof and a copy
of the will or such other evidence as the Company may deem necessary to
establish the validity of the transfer and the acceptance of the terms and
conditions of the Option by the transferee or designee.

6.14 LIMITS ON INCENTIVE STOCK OPTIONS. To the extent that the aggregate
Fair Market Value of Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by any individual during any calendar year
(under all plans of the Company) exceeds $100,000, such Options shall be treated
as Nonqualified Stock Options. For this purpose, the Fair Market Value of any
Common Stock shall be determined as of the time the Option with respect to such
Common Stock is granted. In reducing the number of options treated as Incentive
Stock Options to meet the $100,000 limit, the most recently granted options
shall be reduced first. To the extent a reduction of simultaneously granted
options is necessary to meet the $100,000 limit, the Committee may, in the
manner and to the extent permitted by law, designate which shares are to be
treated as shares acquired pursuant to the exercise of an Incentive Stock
Option.

7. ADJUSTMENTS; ACCELERATION OF OPTIONS; POSSIBLE EARLY TERMINATION OF OPTIONS

7.1 ADJUSTMENTS. If there shall occur any extraordinary dividend or other
extraordinary distribution in respect of the Common Stock (whether in the form
of cash, Common Stock, other securities, or other property), or any
reclassification, recapitalization, stock split (including a stock split in the
form of a stock dividend), reverse stock split, reorganization, merger,
combination, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Common Stock or other securities of the Company, or there shall
occur any similar, unusual or extraordinary corporate transaction or event in
respect of the Common Stock or a sale of substantially all the assets of the
Company as an entirety, then the Committee shall, in such manner and to such
extent (if any) as it deems appropriate and equitable (1) proportionately adjust
any or all of (a) the number and type of shares of Common Stock (or other
securities) which thereafter may be made the subject of Options (including the
specific maxima and numbers of shares set forth elsewhere in this Plan),

(b) the number, amount and type of shares of Common Stock (or other securities
or property) subject to any or all outstanding Options, (c) the grant, purchase,
or exercise price of any or all outstanding Options, or (d) the securities, cash
or other property deliverable upon exercise of any outstanding Options, or (2)
in the case of an extraordinary dividend or other distribution,
recapitalization, reclassification, merger, reorganization, consolidation,
combination, sale of assets, split up, exchange, or spin off, make provision for
a cash payment or for the substitution or exchange of any or all outstanding
Options or the cash, securities or property deliverable to the holder of any or
all outstanding Options based upon the distribution or consideration payable to
holders of the Common Stock of the Company upon or in respect of such event;
PROVIDED, HOWEVER, in each case, that with respect to Incentive Stock Options,
no such adjustment shall be made which would cause the Plan to violate Section
422(a) of the Code or any successor provisions thereto without the written
consent of holders materially adversely affected thereby. In any of such events,
the Committee may take such action sufficiently prior to such event if necessary
to permit the Participant to realize the benefits intended to be conveyed with
respect to the underlying shares in the same manner as is available to
shareholders generally.

7.2 ACCELERATION OF OPTIONS UPON CHANGE IN CONTROL. Upon the occurrence of
a Change in Control Event each Option shall become fully vested and immediately
exercisable. The Committee may override the acceleration provisions in this
Section 7.2 by express provision in an Option Agreement, may establish an
earlier date for acceleration in anticipation of a Change in Control Event, and
may accord any Participant a right to refuse any acceleration, whether pursuant
to the Option Agreement or otherwise, in such circumstances as the Committee may
approve. Any acceleration of Options shall comply with applicable regulatory
requirements, including without limitation Section 422 of the Code.

7.3 POSSIBLE EARLY TERMINATION OF ACCELERATED OPTIONS. Any Option or other
right to acquire Common Stock under this Plan that has been fully accelerated
under Section 7.2 but is not exercised prior to (i) a dissolution of the
Company, or (ii) an event described in Section 7.1 that the Company does not
survive, or (iii) the consummation of an event described in Section 7.1 that
results in a Change of Control Event approved by the Board, such Option or right
shall thereupon terminate, subject to any provision that has been expressly made
by the Committee for the survival, substitution, exchange or other settlement of
such Option or right.

7.4 AUTHORITY TO ADJUST; NO LIMIT ON COMPANY RIGHTS. Any adjustment,
acceleration, or termination of Options made by the Committee pursuant to
Section 7.1, 7.2, or 7.3 is subject to the approval of the Board. The grant of
an Option pursuant to this Plan shall not affect in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or
changes in its capital structure; to merge, consolidate or dissolve; to change
its business structure; or to liquidate, sell or transfer all or any part of its
business or assets.

8. MISCELLANEOUS PROVISIONS

8.1 RIGHTS AS SHAREHOLDER. A Participant or a permitted transferee of an
Option shall have no rights with respect to any shares covered by an Option
until the date of the issuance of the stock certificate to him for such shares.
No adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
provided in Article 7 hereof.

8.2 NO RIGHTS TO EMPLOYMENT. Nothing in this Plan, or in any instrument
executed pursuant hereto shall confer upon any Participant the right to continue
in the employ or service of the Company, affect the

right of the Company to terminate the employment or service of any Participant
with or without cause, or be evidence of any agreement or understanding,
expressed or implied, that the Company will employ or continue to employ a
Participant in a particular position or at a particular rate of remuneration.

8.3 COMPLIANCE WITH SECURITIES LAWS. The granting, vesting, and exercise
of Options and the issuance and delivery of shares upon exercise thereof and/or
payment of money or other property under this Plan shall be subject to
compliance with all applicable Federal and state laws, rules, and regulations
(including, without limitation, compliance with all Federal and state securities
laws and Federal margin requirements) and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for the
Company, be necessary or advisable in connection therewith. Any securities
delivered under this Plan shall be subject to such restrictions, and the person
acquiring such securities shall, if requested by the Company, provide such
assurances and representations to the Company as the Company may deem necessary
or desirable to assure compliance with all legal requirements. The Company may,
from time to time, change its requirements with respect to enforcing compliance
with applicable laws (including, without limitation, the request for, and
enforcement of, letters of investment intent). These changes may be made with
respect to any particular Option or shares issued upon the exercise thereof
prior to or after the exercise of such Option.

8.4 PLAN NOT FUNDED. Options payable under this Plan shall be payable in
shares or from the general assets of the Company, and (other than any
reservation of shares for Plan purposes) no special or separate reserve, fund or
deposit shall be made to assure payment of Options. No Participant, beneficiary
or other person shall have any right, title or interest in any fund or in any
specific asset (including shares of Common Stock, except as expressly provided
otherwise) of the Company by reason of any Option granted hereunder. Neither the
provisions of this Plan (or of any related documents), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this
Plan shall create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Participant, beneficiary, or other
person. To the extent that a Participant, beneficiary, or other person acquires
a right to receive payment pursuant to any Option hereunder, such right shall be
no greater than the right of any unsecured general creditor of the Company.

8.5 FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares upon the exercise of an Option under any circumstances.

8.6 INDEMNIFICATION. In addition to such other rights of indemnification
as they may have as members of the Board or the Committee, the Company shall
indemnify the members of the Board or the Committee, to the fullest extent
permitted by law, against reasonable expenses, including attorneys' fees,
actually and necessarily incurred in connection with the defense of any action,
suit or proceeding or in connection with any appeal therein, to which they or
any of them may be a party by reason of any action taken, or not taken, under or
in connection with this Plan or any Option granted hereunder, and against all
amounts paid by them in settlement thereof or paid by them in satisfaction of a
judgment in any action, suit, or proceeding, provided that within sixty (60)
days after institution of any such action, suit or proceeding, the members shall
offer the Company, in writing, the opportunity, at its own expense to handle and
defend such actions.

8.7 GOVERNING LAW/CONSTRUCTION/SEVERABILITY. This Plan, the Options, all
documents evidencing Options and all other documents shall be governed by, and
construed in accordance with the laws of the state of California. If any
provision shall be held by a court of competent jurisdiction to be invalid and
unenforceable, the remaining provisions of this Plan shall continue in effect.

It is the intent of the Company that transactions in and affecting Options
in the case of Participants who are or may be subject to Section 16 of the
Exchange Act satisfy any then applicable requirements of Rule 16b-3 promulgated
under the Exchange Act ("Rule 16b-3") so that such persons (unless they
otherwise agree) will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 of the Exchange Act in respect of those
transactions and will not be subjected to avoidable liability thereunder. If any
provision of this Plan or of any Option would otherwise frustrate or conflict
with the intent expressed above, that provision to the extent possible shall be
interpreted as to avoid such conflict. If the conflict remains irreconcilable,
the Committee may disregard the provision if it concludes that to do so furthers
the interest of the Company and is consistent with the purposes of this Plan as
to such persons in the circumstances.

It is the further intent of the Company that Options with an exercise price
not less than Fair Market Value on the date of grant qualify as
performance-based compensation under Section 162(m) of the Code, and this Plan
shall be interpreted consistent with such intent.

8.8 TAX WITHHOLDING. Upon any exercise, vesting, or payment of any Option
or upon the disposition of shares of Common Stock acquired pursuant to the
exercise of an Incentive Stock Option prior to satisfaction of the holding
period requirements of Section 422 of the Code, the Company shall have the right
at its option to (a) require the Participant (or other person holding such
Option or shares) to pay or provide for payment of the amount of any taxes which
the Company may be required to withhold with respect to such Option event or
payment or (b) deduct from any amount payable in cash the amount of any taxes
which the Company may be required to withhold with respect to such cash payment.
In any case where a tax is required to be withheld in connection with the
delivery of shares of Common Stock under this Plan, the Committee may in its
sole discretion grant (either at the time of the Option or thereafter) to the
Participant the right to elect, pursuant to such rules and subject to such
conditions as the Committee may establish, to have the Company reduce the number
of shares to be delivered by (or otherwise reacquire) the appropriate number of
shares valued at their then Fair Market Value, to satisfy such withholding
obligation. Shares of Common Stock transferred to the Company pursuant to this
Section 8.8 shall not increase the number of shares available for issuance under
this Plan.

8.9 CAPTIONS. Captions and headings are given to the articles, sections
and subsections of this Plan solely as a convenience to facilitate reference.
Such headings shall not be deemed in any way material or relevant to the
construction or interpretation of this Plan or any provision thereof.

8.10 NON-EXCLUSIVITY OF PLAN. Nothing in this Plan shall limit or be
deemed to limit the authority of the Board or the Committee to grant awards or
authorize any other compensation, with or without reference to the Common Stock,
under any other plan or authority.

9. TERMINATION AND AMENDMENT OF THE PLAN

The Board may, at any time, suspend, amend or terminate this Plan. No
Options shall be granted during any suspension of this Plan or after the
termination of this Plan, but the Committee shall retain jurisdiction as to
Options then outstanding in accordance with the terms of this Plan. Any
amendment that would (a) materially increase the benefits accruing to
Participants under this Plan, (b) materially increase the aggregate number of
securities that may be issued under this Plan, or (c) materially modify the
requirements as to eligibility for participation in this Plan, shall be subject
to shareholder approval only to the extent then required by Section 422 of the
Code or applicable law, or deemed necessary or advisable by the Board.

The amendment or termination of this Plan shall not, without the consent of
the affected Participant, alter or impair in a manner materially adverse to the
Participant, any rights or obligations under any Option previously granted
hereunder. Changes contemplated by Article 7 shall not be deemed to constitute
amendments for purposes of the foregoing sentence.

10. EFFECTIVE DATE AND TERM OF PLAN

This Plan shall be effective as of the date it is approved by the Board,
subject to shareholder approval within 12 months thereafter.

No Option shall be granted under this Plan after more than ten years after
the effective date of this Plan (the "termination date"). Unless otherwise
expressly provided in this Plan or in an applicable Option Agreement, any Option
granted prior to the termination date may extend beyond such date, and all
authority of the Committee with respect to Options hereunder, including the
authority to amend an Option, shall continue during any suspension of this Plan
and in respect of Options outstanding on the termination date.

MARSHALL INDUSTRIES/PROXY 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

I hereby appoint Gordon S. Marshall and Henry W. Chin, and each of them or
either of them with full power to act without the other and with full power of
substitution, my true and lawful attorneys and proxies, to vote all the shares
of stock of Marshall Industries held of record by me on August 25, 1997 and to
act for me and in my name, place and stead at the Annual Meeting of Shareholders
to be held on Tuesday, October 21, 1997 or any adjournment thereof, for the
purpose of considering and voting upon the following:

1. ELECTION OF DIRECTORS.

/ / For ALL Nominees listed below

/ / Withhold authority to vote ALL Nominees listed below

(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)

Gordon S. Marshall Richard D. Bentley Jean Fribourg Jose Menendez Howard C. White
Robert Rodin Richard C. Colyear Lathrop Hoffman Raymond G. Rinehart

2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING MAY 31, 1998.

/ / FOR / / AGAINST / / ABSTAIN

3. PROPOSAL TO ADOPT THE 1997 STOCK OPTION PLAN.

/ / FOR / / AGAINST / / ABSTAIN

4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND TO VOTE THE PROXIES
CUMULATIVELY IN THEIR DISCRETION IF CUMULATIVE VOTING IS IN EFFECT AT THE
MEETING.

(Please sign and date the reverse side)

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2 AND 3.

Please sign exactly as name appears
below. This Proxy should be dated,
signed by the shareholder as name
appears hereon, and returned promptly
in the enclosed envelope. Persons
signing in a fiduciary capacity
should so indicate.

-------------------------------------
Signature

-------------------------------------
Signature if held jointly
DATED: ________________________, 1997