UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  SCHEDULE 14A

                    Proxy Statement Pursuant to Section 14(a)
                     of the Securities Exchange Act of 1934

Filed by the Registrant    [X]
Filed by a Party other than the Registrant  [  ]

Check the appropriate box:
[X]  Preliminary Proxy Statement
[  ] Confidential, for Use of the Commission Only (as permitted by
     Rule 14a-6(e)(2))
[  ] Definitive Proxy Statement
[  ] Definitive Additional Materials
[  ] Soliciting Material Pursuant to Rule 14a-12

                           PROGRAMMER'S PARADISE, INC.
-------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)

-------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

-------------------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box):

[X]    No fee required.
[  ]   Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
       (1)   Title of each class of securities to which transaction applies:
       ------------------------------------------------------------------------
       (2)   Aggregate number of securities to which transaction applies:
       ------------------------------------------------------------------------

       (3)  Per unit price or other underlying  value of transaction  computed
            pursuant to Exchange  Act Rule 0-11 (Set forth the amount on which
            the filing  fee is  calculated  and state how it was  determined):
            -------------------------------------------------------------------
       (4)  Proposed maximum aggregate value of transaction:
            -------------------------------------------------------------------
       (5)  Total fee paid:
            -------------------------------------------------------------------

[  ]   Fee paid previously with preliminary materials.

[  ]   Check box if any part of the fee is offset as  provided  by  Exchange
       Act Rule  0-11(a)(2)  and identify the filing for which the  offsetting
       fee was paid  previously.  Identify the previous filing by registration
       statement number, or the Form or Schedule and the date of its filing.

       (1)   Amount Previously Paid:
       ------------------------------------------------------------------------
       (2)   Form, Schedule or Registration Statement No.:
       ------------------------------------------------------------------------
       (3)   Filing Party:
       ------------------------------------------------------------------------
       (4)   Date Filed:
       ------------------------------------------------------------------------




                                PRELIMINARY COPY
                           PROGRAMMER'S PARADISE, INC.
                             1157 Shrewsbury Avenue
                          Shrewsbury, New Jersey 07702


                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

                            TO BE HELD JUNE 14, 2006

To our Stockholders:

Notice is hereby given that the Annual Meeting of  Stockholders  (the "Meeting")
of  Programmer's  Paradise,  Inc. (the  "Company") will be held at the company's
headquarters at 1157 Shrewsbury Avenue, Shrewsbury, New Jersey, on June 14, 2006
at 10:00 AM, local time, for the following purposes:

     1.  To  elect a Board  of six  Directors  to serve  until  the next  annual
         meeting of  stockholders  or until  their  successors  are  elected and
         qualified;

     2.  To  approve  an  amendment  to  the  Company's   Amended  and  Restated
         Certificate  of  Incorporation  to change our corporate name to Wayside
         Technology Group, Inc.;

     3.  To approve the 2006 Stock Incentive Plan (the "2006 Plan");

     4.  To ratify the  appointment  of Amper,  Politziner  & Mattia P.C. as the
         Company's independent registered public accounting firm for 2006; and

     5.  To consider  and take action  upon such other  matters as may  properly
         come before the Meeting and any adjournment or postponement thereof.

The close of  business  on April 25,  2006 has been fixed as the record date for
the  determination  of  stockholders  entitled  to  notice of and to vote at the
Meeting and any adjournment or postponement thereof. Commencing 10 days prior to
the Meeting,  a complete list of stockholders will be open to the examination of
any stockholder for any purpose germane to the Meeting, during ordinary business
hours, at the Company's headquarters,  1157 Shrewsbury Avenue,  Shrewsbury,  New
Jersey. The transfer books of the Company will not be closed.

All stockholders are cordially invited to attend the Meeting. Whether or not you
expect to attend,  you are  respectfully  requested to fill in,  sign,  date and
return the enclosed proxy promptly in the accompanying envelope,  which requires
no postage if mailed in the United States.

A copy of the  Company's  Annual  Report for the fiscal year ended  December 31,
2005 is enclosed herewith.

                                        By Order of the Board of Directors,


                                        William H. Willett,
                                        Chairman
April 28, 2006



                           PROGRAMMER'S PARADISE, INC.
                             1157 Shrewsbury Avenue
                          Shrewsbury, New Jersey 07702

                                 PROXY STATEMENT

This proxy  statement is furnished in connection  with the  solicitation  by the
Board of Directors of Programmer's Paradise,  Inc. (the "Company") of proxies to
be voted at the Annual Meeting of Stockholders ("the Meeting") to be held at the
corporate headquarters, 1157 Shrewsbury Ave, Shrewsbury, New Jersey, on June 14,
2006 at 10:00 AM, local time, and at any adjournments or postponements  thereof,
for the  purposes  set forth in the  accompanying  Notice of Annual  Meeting  of
Stockholders.  Any  stockholder  giving  such a proxy may  revoke it at any time
before it is  exercised  by written  notice to the  Corporate  Secretary  of the
Company at the above-stated address or by giving a later dated proxy. Attendance
at the  Meeting  will not have the  effect of  revoking  the proxy  unless  such
written  notice  is  given,  or unless  the  stockholder  votes by ballot at the
Meeting.

The approximate date on which this proxy statement and the accompanying  form of
proxy will  first be sent or given to the  Company's  stockholders  is April 28,
2006.

VOTING SECURITIES

Only holders of shares of the Company's  Common Stock,  $.01 par value per share
("Common  Stock"),  of  record at the close of  business  on April 25,  2006 are
entitled  to vote at the  Meeting.  On  April  25,  2006  (the  "Record  Date"),
4,143,262  shares of Common Stock were issued and outstanding.  In addition,  on
that date,  1,138,738  shares  were held in  Treasury  by the Company and deemed
issued but not outstanding.  Each outstanding  share of Common Stock is entitled
to one vote upon all  matters to be acted  upon at the  Meeting.  A majority  in
interest of the outstanding Common Stock represented at the Meeting in person or
by proxy shall  constitute a quorum.  The affirmative vote of a plurality of the
shares  present in person or represented by proxy at the Meeting and entitled to
vote is necessary to elect the nominees for election as Directors.  Accordingly,
shares not voted in the election of  Directors  (including  shares  covered by a
proxy as to which authority is withheld to vote for all nominees) and shares not
voted for any  particular  nominee  (including  shares  covered by a proxy as to
which  authority  is  withheld  to vote  for  only  one or less  than all of the
identified  nominees)  will not prevent the  election of any of the nominees for
Director.  For all other matters submitted to stockholders at the Meeting,  if a
quorum is present,  the affirmative vote of a majority of the shares represented
at the Meeting  and  entitled to vote is  required  for  approval.  As a result,
abstention  votes  will  have  the  effect  of  a  vote  against  such  matters.
Abstentions  and broker  non-votes are counted for purposes of  determining  the
presence  or  absence  of a  quorum  for the  transaction  of  business.  Broker
non-votes  are not counted for any purpose in  determining  whether a matter has
been approved.

If the  enclosed  proxy is properly  executed  and  returned,  the Common  Stock
represented  thereby will be voted in accordance with the instructions  thereon.
If no instructions are indicated,  the Common Stock represented  thereby will be
voted FOR the  election  of each of the  nominees  set forth  under the  caption
"Election of Directors", FOR the amendment to the Company's Amended and Restated
Certificate of Incorporation,  FOR the approval of the 2006 Stock Incentive Plan
and FOR the ratification of the Company's independent public accountants, and in
the discretion of the persons named in the proxies as proxy appointees as to any
other matter that may properly come before the Meeting.

Your vote is important.  Accordingly,  you are urged to fill in, sign,  date and
return  the  accompanying  proxy  card  whether  or not you plan to  attend  the
Meeting.  If you do  attend,  you may vote by  ballot  at the  Meeting,  thereby
canceling any proxy previously given.

                                       2



SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following  table sets forth  certain  information  regarding the  beneficial
ownership  of the Common  Stock as of April 25,  2006 by (i) each person who, to
the knowledge of the Company,  beneficially owns more than 5% of the outstanding
Common  Stock  of the  Company,  (ii)  the  Directors  and the  Company's  Chief
Executive Officer and the four other most highly compensated  executive officers
of the  Company  who were  serving as such as of  December  31, 2005 (the "Named
Executive  Officers")  and (iii) all  Directors  and  executive  officers of the
Company as a group.  Except as  indicated,  each  person  listed  below has sole
voting and  investment  power with respect to the shares set forth opposite such
person's name.




                                                                              Number of shares
  Name                                                                       beneficially owned    Percent
  -----------------------------------------------------------------------    ------------------    -------
                                                                                               

  Mark T. Boyer (1)                                                                  393,842           9.4%
  William H. Willett (2)                                                             210,893           4.9%
  Edwin Morgens (3)                                                                  200,969           4.8%
  Jeffrey Largiader (4)                                                               92,500           2.2%
  Simon F. Nynens (5)                                                                114,320           2.7%
  F. Duffield Meyercord (6)                                                           75,362           1.8%
  Allan D. Weingarten (7)                                                             32,362           0.8%
  Vito Legrottaglie (8)                                                               55,270           1.3%
  Dan Jamieson (9)                                                                    45,000           1.1%
  All Directors and executive officers as a group (9 persons) (10)                 1,220,518          25.3%
  ROI Master Fund, Ltd. (11)                                                         267,568           6.5%
  J. Steven Emerson (12)                                                             262,951           6.3%
  Barclays Global Investors, NA  (13)                                                223,730           5.4%



To the Company's  knowledge,  except as set forth in the footnotes to this table
and subject to  applicable  community  property  laws,  each person named in the
table has  "beneficial  ownership" with respect to the shares set forth opposite
such  person's  name.  Unless  otherwise  noted  below,  the  information  as to
beneficial  ownership is based upon  statements  furnished to the Company by the
beneficial  owners.  For purposes of computing  the  percentage  of  outstanding
shares held by each person named above,  pursuant to the rules of the Securities
and Exchange Commission,  any security that such person has the right to acquire
within 60 days of the date of  calculation is deemed to be  outstanding,  but is
not deemed to be outstanding for purposes of computing the percentage  ownership
of any other person.

The  address  for each  Director  and  executive  officer of the  Company is c/o
Programmer's  Paradise,  Inc., 1157 Shrewsbury  Avenue,  Shrewsbury,  New Jersey
07702.

(1)      Beneficial ownership  information is based upon information provided by
         ROI Master Fund,  Ltd.  ("ROI") and Mr. Boyer. By virtue of Mr. Boyer's
         ownership  interest in ROI, Mr. Boyer may be deemed to beneficially own
         the 267,568  shares  beneficially  owned by ROI. See footnote 11 below.
         Mr. Boyer  beneficially  owns directly  78,100 shares.  Includes 48,174
         shares  of Common  Stock  that may be  acquired  upon the  exercise  of
         options  that are  currently  exercisable  or will  become  exercisable
         within 60 days following April 25, 2006.

(2)      Includes  200,893  shares of Common Stock that may be acquired upon the
         exercise  of options  that are  currently  exercisable  or will  become
         exercisable  within 60 days  following  April 25,  2006.

(3)      Includes  20,000 shares of Common Stock held by a trust for the benefit
         of Mr. Morgens'  daughter,  with respect to which Mr. Morgens disclaims
         beneficial  ownership.  Includes 45,632 shares of Common Stock that may
         be acquired upon the exercise of options that are currently exercisable
         or will become exercisable within 60 days following April 25, 2006.

                                       3




(4)      Includes  90,000  shares of Common Stock that may be acquired  upon the
         exercise  of options  that are  currently  exercisable  or will  become
         exercisable within 60 days following April 25, 2006.

(5)      Includes  114,320  shares of Common Stock that may be acquired upon the
         exercise  of options  that are  currently  exercisable  or will  become
         exercisable within 60 days following April 25, 2006.

(6)      Includes  45,362  shares of Common Stock that may be acquired  upon the
         exercise  of options  that are  currently  exercisable  or will  become
         exercisable within 60 days following April 25, 2006.

(7)      Includes  30,362  shares of Common Stock that may be acquired  upon the
         exercise  of options  that are  currently  exercisable  or will  become
         exercisable within 60 days following April 25, 2006.

(8)      Includes  55,000  shares of Common Stock that may be acquired  upon the
         exercise  of options  that are  currently  exercisable  or will  become
         exercisable within 60 days following April 25, 2006.

(9)      Includes  45,000  shares of Common Stock that may be acquired  upon the
         exercise  of options  that are  currently  exercisable  or will  become
         exercisable within 60 days following April 25, 2006.

(10)     Includes  674,473  shares of Common Stock that may be acquired upon the
         exercise  of options  that are  currently  exercisable  or will  become
         exercisable within 60 days following April 25, 2006.

(11)     Based solely on  information  provided by ROI in a Schedule 13G/A filed
         with the  Securities  and  Exchange  Commission  on March 7, 2006.  The
         address for ROI is 300 Drakes Landing Road,  Suite 175,  Greenbrae,  CA
         94904.  Beneficial  ownership  information  is based  upon  information
         provided by ROI.

(12)     Based solely on information provided by J. Steven Emerson in a Schedule
         13G/A filed with the Securities and Exchange Commission on November 17,
         2005. The address of J. Steven  Emerson is 1522 Ensley Avenue,  Century
         City, CA 90024. Includes 25,151 shares of Common Stock owned by Emerson
         Partners,  over which Mr.  Emerson  exercises  voting  and  dispositive
         powers.

(13)     Based solely on information  provided by Barclays Global Investors,  NA
         in a Schedule 13G filed with the Securities and Exchange  Commission on
         January  26,  2006.  The  address of  Barclays  Global  Investor  is 45
         Freemont Street, San Francisco, CA 94105.

CORPORATE GOVERNANCE

Role of the Board of Directors

In accordance with the General  Corporation Law of the State of Delaware and our
certificate of incorporation and bylaws, our business,  property and affairs are
managed under the direction of the Board of Directors. Although our non-employee
Directors are not involved in our day-to-day  operating  details,  they are kept
informed of our business through written reports and documents  provided to them
regularly, as well as by operating, financial and other reports presented by our
officers at meetings of the Board of Directors  and  committees  of the Board of
Directors.

Meetings of the Board of Directors

The Board met six times in 2005. Each of the Directors  attended at least 75% of
all meetings held by the Board of Directors  and all meetings of each  committee
of the Board of Directors on which such Director served during 2005.

Communication  with the  Board  of  Directors;  Director  Attendance  at  Annual
Meetings

Stockholders  may communicate with a member or members of the Board of Directors
by  addressing  their  correspondence  to the Board  member or  members  c/o the
Corporate  Secretary,  Programmer's  Paradise,  Inc.,  1157  Shrewsbury  Avenue,
Shrewsbury, NJ 07702. Our Corporate Secretary will review the correspondence and
forward  it to the  chair  of the  appropriate  committee  or to any  individual
Director  or  Directors  to whom  the  communication  is  directed,  unless  the
communication  is unduly  hostile,  threatening,  illegal,  does not  reasonably
relate to Programmer's Paradise or our business, or is similarly  inappropriate.
Our  Corporate   Secretary  has  the  authority  to  discard  or  disregard  any
inappropriate  communications or to take other appropriate  actions with respect
to any such inappropriate communications.

                                       4




Recognizing  that  Director  attendance  at our annual  meetings can provide our
stockholders with a valuable opportunity to communicate with Board members about
issues  affecting our Company,  we encourage our Directors to attend each annual
meeting of  stockholders.  Each Board member attended last year's annual meeting
of stockholders.

Director Independence

The  Board  of  Directors  has  determined  that  the  following  Directors  are
independent  under the  NASDAQ  listing  standards:  Messrs.  Boyer,  Meyercord,
Morgens and Weingarten.

Committees of the Board of Directors

The Board of Directors  has an Audit  Committee,  Compensation  Committee  and a
Nominating and Governance Committee.

Audit Committee. The Board of Directors has an Audit Committee that monitors the
integrity of the Company's financial statements, financial reporting process and
internal controls regarding finance,  accounting and legal compliance;  monitors
the independence and performance of our independent registered public accounting
firm;  provides  an avenue of  communication  among the  independent  registered
public accounting firm,  management,  including internal audit, and our Board of
Directors;  and monitors significant litigation and financial risk exposure. The
current  members  of the Audit  Committee  are  Messrs.  Weingarten  (Chairman),
Meyercord  and  Morgens,  each of whom is  independent  as defined by the NASDAQ
listing  standards and  applicable  Securities and Exchange  Commission  ("SEC")
rules.  The Board of Directors  has  determined  that Mr.  Weingarten  meets the
criteria as an "audit committee  financial  expert" as defined in applicable SEC
rules. The Audit Committee met five times during 2005.

The Audit  Committee  operates under a written  charter  adopted by the Board of
Directors.  A copy of the charter is available in the investor relations section
of our web  site,  http://www.programmersparadise.com/company/overview.pasp. The
report of the Audit Committee begins on page 23 of this proxy statement.

Compensation  Committee.  The Board of Directors  has a  Compensation  Committee
which  reviews  and  monitors  matters  related to  management  development  and
succession;  develops and implements executive compensation policies and pay for
performance  criteria  for the  Company;  reviews and  approves  the initial and
annual base salaries,  annual incentive bonus and all long-term incentive awards
of our Chairman of the Board and Chief Executive  Officer;  reviews and approves
such compensation  arrangements for all corporate officers and certain other key
employees;  approves  stock-related  incentives  under our stock  incentive  and
executive compensation plans, and exercises all powers of the Board of Directors
under  those  plans  other  than the power to amend or  terminate  those  plans;
reviews and approves material matters  concerning our employee  compensation and
benefit plans; and carries out such  responsibilities  as have been delegated to
it under various compensation and benefit plans and such other  responsibilities
with respect to our  compensation  matters as may be referred to it by our Board
of  Directors  or  management.  The members of the  Compensation  Committee  are
Messrs.  Meyercord  (Chairman),   Morgens  and  Weingarten,   each  of  whom  is
independent  as  defined  by the  NASDAQ  listing  standards.  The  Compensation
Committee met two times during 2005.

The Compensation Committee operates under a written charter adopted by the Board
of Directors,  a copy of which is available in the investor relations section of
our web  site,  http://www.programmersparadise.com  /company/overview.pasp.  The
report of the Compensation Committee begins on page 21 of this proxy statement.

Nominating and Governance  Committee.  The Board has a Nominating and Governance
Committee  which  identifies  individuals  qualified to become Board members and
recommends  to the Board  director  nominees  for  election  at the next  Annual
Meeting of Stockholders. Currently, the members of the Nominating and Governance
Committee are Messrs. Boyer (Chairman),  Morgens and Weingarten, each of whom is
independent  as defined by the NASDAQ  listing  standards.  The  Nominating  and
Governance  Committee  met once  during  2005.  The  Nominating  and

                                       5



Governance  Committee  operates under a written  charter adopted by the Board of
Directors.  The Nominating and Governance  Committee charter is available in the
investor  relations section of our web site,  http://www.programmersparadise.com
/company/overview.pasp.

Director Nominations

The  Nominating  and  Governance  Committee  will consider  recommendations  for
directorships   submitted  by  our  stockholders.   Stockholders  who  wish  the
Nominating  and  Governance  Committee  to consider  their  recommendations  for
nominees for the position of Director  should submit their  recommendations,  in
accordance  with the  procedures  set forth  below,  in  writing  to:  Corporate
Secretary,  Programmer's Paradise, Inc., 1157 Shrewsbury Avenue,  Shrewsbury, NJ
07702.  In order to be considered for inclusion in the proxy  statement and form
of  proxy  for the  annual  meeting  of  stockholders  to be held in  2007,  the
stockholder's  notice much be received by our Company not less than 120 days nor
more  than 150 days  before  the  first  anniversary  of the date of this  proxy
statement.

For  nominations,  such  stockholder's  notice  shall set forth:  (i) as to each
person whom the stockholder proposes to nominate for election as a Director, (A)
the name, age, business address and residential  address of such person, (B) the
principal  occupation or employment of such person,  (C) the class and number of
shares of stock of our Company that are beneficially  owned by such person,  (D)
any other  information  relating to such person that is required to be disclosed
in solicitations  of proxies for election of Directors or is otherwise  required
by the  rules  and  regulations  of the SEC  promulgated  under  the  Securities
Exchange  Act of 1934,  as  amended  (the  "Exchange  Act") and (E) the  written
consent of the  nominee to be named in the proxy  statement  as a nominee and to
serve as a Director if elected and (ii) as to the stockholder giving the notice,
(A) the name, and business  address and residential  address,  as they appear on
our stock transfer books, of the nominating  stockholder,  (B) a  representation
that the nominating stockholder is a stockholder of record and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the  notice,  (C) the  class and  number  of  shares of stock of our  Company
beneficially  owned by the nominating  stockholder  and (D) a description of all
arrangements  or  understandings  between the  nominating  stockholder  and each
nominee and any other person or persons (naming such person or persons) pursuant
to  which  the  nomination  or  nominations  are to be  made  by the  nominating
stockholder.

In its  assessment of each  potential  candidate,  the Nominating and Governance
committee will review the nominee's  professional ethics,  integrity and values,
judgment,  experience,  independence,  commitment to representing  the long-term
interests of the  stockholders,  understanding of our Company's or other related
industries  and such other  factors  the  Nominating  and  Governance  Committee
determines  are  pertinent  in  light  of the  current  needs  of the  Board  of
Directors.  The Nominating and Governance Committee seeks to identify candidates
representing   diverse   experiences  at   policy-making   levels  in  business,
management,  marketing,  finance,  human resources,  communications and in other
areas  that are  relevant  to our  activities.  The  Nominating  and  Governance
Committee  will also take into  account  the ability of a Director to devote the
time and effort necessary to fulfill his or her responsibilities to our Company.
After full  consideration,  the  stockholder  proponent  will be notified of the
decision of the Nominating and Governance Committee.

Nominees may also be  recommended by Directors,  members of  management,  or, in
some cases, by a third party firm. In identifying and considering candidates for
nomination to the Board, the Nominating and Governance Committee  considers,  in
addition to the requirements described above and set out in its charter, quality
of  experience,  our needs and the range of knowledge,  experience and diversity
represented  on the Board.  Each  Director  candidate  will be  evaluated by the
Nominating and Governance  Committee  based on the same criteria and in the same
manner,  regardless  of  whether  the  candidate  was  recommended  by a company
stockholder or by others.  The Nominating and Governance  Committee will conduct
the  appropriate  and necessary  inquiries with respect to the  backgrounds  and
qualifications of all Director nominees. The Nominating and Governance Committee
will also review the independence of each candidate and other  qualifications of
all Director candidates,  as well as consider questions of possible conflicts of
interest  between  Director  nominees and our Company.  After the nominating and
governance committee has completed its review of a nominee's  qualifications and
conducted the  appropriate  inquiries,  the Nominating and Governance  Committee
will make a  determination  whether to recommend the nominee for approval by the
Board of  Directors.  If the  Nominating  and  Governance  Committee  decides to
recommend the director nominee

                                       6



for nomination by the Board of Directors and such  recommendation is accepted by
the Board, the form of our proxy solicited will include the name of the director
nominee.



Director Compensation and Arrangements

Each  outside  Director  (i.e.,  non-employee)  receives  $2,000 per quarter for
serving  on the  Board,  an  additional  $1,000  per  meeting,  $1,000 per Audit
Committee  meeting  and  $500  per  Compensation  Committee  meeting  as well as
reimbursement  for reasonable  expenses incurred in connection with service as a
Director. In April 1995, the Company adopted the 1995 Non-Employee Director Plan
pursuant to which the Company's non-employee Directors received automatic grants
of options to purchase  shares of Common Stock.  See "Stock  Option  Plans--1995
Non-Employee  Director  Plan." On April 21,  2005,  each  non-employee  Director
received  non-qualified options to purchase 3,000 shares of Common Stock with an
exercise price of $12.85 per share, vesting immediately.

Code of Business Conduct and Ethics

In January 2004, we adopted a Code of Ethical Conduct. The full text of the Code
of Ethical  Conduct,  which applies to all employees,  officers and Directors of
the Company,  including our Chief Executive Officer, Chief Financial Officer and
Controller  is  available  in the  investor  relations  section of our web site,
http://www.programmersparadise.com/company/overview.pasp. The Company intends to
disclose  any  amendment  to, or waiver from, a provision of the Code of Ethical
Conduct that applies to our Chief Executive Officer,  Chief Financial Officer or
Controller in the investor relations section of our web site.

                                   PROPOSAL 1
                                   ----------

                              ELECTION OF DIRECTORS

At the Meeting, six Directors will be elected by the stockholders to serve until
the next annual meeting or until their successors are elected and qualified. The
accompanying  proxy will be voted for the  election as Directors of the nominees
listed  below,  all of whom are currently  Directors of the Company,  unless the
proxy contains contrary  instructions.  Each of the nominees has consented to be
named in this proxy  statement  and to serve as a Director  upon  election,  and
management  has no  reason to  believe  that any of the  nominees  will not be a
candidate or will be unable to serve as a Director.  However,  in the event that
any of the nominees  should  become  unable or unwilling to serve as a Director,
the proxy will be voted for the  election  of such person or persons as shall be
designated by the Directors.

Set forth below is certain  information,  as of April 25, 2006,  with respect to
each nominee:





                                                                                                                     Director
  Name            Age    Principal Occupation                                                                         Since
  ----            ---    --------------------                                                                         -----
                                                                                                            


William H.        69     Mr.  Willett has served as a Director of the Company since  December  1996. In July 1998,   December
Willett                  Mr.  Willett was  appointed  to the  position of  Chairman.  Mr.  Willett  also served as   1996
                         President and Chief Executive Officer of the company from July 1998 to January 2006.

Simon F. Nynens   34     Mr.  Nynens was  appointed  President and Chief  Executive  Officer in January 2006.  Mr.   January
                         Nynens also was  elected to the Board to fill the  vacancy on the Board in January  2006.   2006
                         He previously held the positions of Executive Vice President and Chief Financial  Officer
                         since June 2004,  and Vice  President  and Chief  Financial  Officer from January 2002 to
                         June 2004.  Prior to that appointment he served as the Vice President and Chief Operating
                         Officer of the Company's European operations.

F. Duffield       59     Mr.  Meyercord has served as a Director of the Company since December 1991. Mr. Meyercord   December



                                       7






                                                                                                                     Director
  Name            Age    Principal Occupation                                                                         Since
  ----            ---    --------------------                                                                         -----
                                                                                                            

Meyercord                is a Managing Partner and a Director of Carl Marks Consulting  Group, LLC in New York. He   1991
                         is also the Managing Director and founder of Meyercord  Advisors,  Inc. a consulting firm
                         offering financial and operational  assistance to corporations.  Mr. Meyercord  currently
                         serves as a Director of the Peapack Gladstone Bank and Headway Corporate Resources.

Edwin H. Morgens  64     Mr.  Morgens  was a founder of the  Company  and has served as a Director  of the Company   May
                         since May 1982.  Mr.  Morgens is and has been the  Chairman  and  co-founder  of Morgens,   1982
                         Waterfall,  Vintiadis & Co. Inc.,  an investment  firm in New York,  New York since 1968.
                         Mr. Morgens currently serves as a Director of TransMontaigne, Inc.

Allan D.          68     Mr.  Weingarten  has served as a Director of the Company  since April 1997.  From January   April
Weingarten               2001,  until retiring in December 2003, Mr.  Weingarten was the Senior Vice President and   1997
                         Treasurer  of  Jacuzzi  Brands,  Inc.  (formerly  known as U.S.  Industries,  Inc.).  Mr.
                         Weingarten also currently serves as a Director of AXS-One, Inc.

Mark T. Boyer     48     Mr.  Boyer  was  appointed  to the  Board in April  2001.  Mr.  Boyer is and has been the   April
                         President and a Director of ROI Capital Management in Greenbrae, California since 1992.     2001



All  Directors  hold office until the next annual  meeting of  stockholders  and
until their successors are duly elected. Officers serve at the discretion of the
Board of Directors.

 THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF EACH OF
                            THE NOMINATED DIRECTORS.

                                   PROPOSAL 2
                                   ----------

TO APPROVE AN AMENDMENT TO THE  COMPANY'S  AMENDED AND RESTATED  CERTIFICATE  OF
INCORPORATION TO CHANGE OUR CORPORATE NAME TO WAYSIDE TECHNOLOGY GROUP, INC.

The Board of Directors has determined that it is advisable to change the name of
the Company from Programmer's  Paradise,  Inc. to Wayside Technology Group, Inc.
and has voted to  recommend  that the  stockholders  adopt an  amendment  to our
amended and restated  certificate of  incorporation  effecting the proposed name
change.

We have expanded our service offerings beyond the niche of serving  programmers.
This change in our company  name signals to the market our identity as a unified
and integrated  technology company. The name Wayside Technology Group, Inc. will
provide our subsidiaries  with a flexible  corporate  structure and gives us the
flexibility  to build on our strong  brands and start new  divisions  focused on
consultancy  and  additional  services.  We have started to report our financial
information  per  segment and this new  corporate  structure  is a logical  step
towards an expanding technology company.

Our  customers  from  our  operating   subsidiaries  Lifeboat  distribution  and
Programmers  Paradise will not see any change in the name of our powerful brands
- Lifeboat  Distribution  and  Programmer's  Paradise.  We have no intentions to
sunset any of our brands.

Having a stronger,  clearer identity will enhance our competitive advantage.  It
will offer clarity and  simplicity in the  marketplace.  While the  Programmer's
Paradise brand has strong brand  recognition,  Wayside Technology Group provides
the  structure  many  software  vendors,  customers,  key upstream  partners and
stockholders would like to see.

                                       8



Upon approval we will change our stock ticker symbol to "WSTG".  Since this will
only  affect  our  corporate  name we  believe  that  this  name  change  can be
cost-effectively implemented in a timely manner.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL TO CHANGE OUR
                                CORPORATE NAME.

                                   PROPOSAL 3
                                   ----------

                    APPROVAL OF THE 2006 STOCK INCENTIVE PLAN

The board of directors  adopted the 2006 Stock  Incentive Plan (the "2006 Plan")
on April 12, 2006 subject to  stockholder  approval at the 2006 Annual  meeting.
The board  believes that it is in the best interests of the Company to adopt the
2006 Plan so that the  Company can  continue  to attract and retain  services of
those persons essential to the Company's growth and financial success.

The  following  is a summary of the  principal  features  of the 2006 plan.  The
summary does not purport to be a complete  description  of all the provisions of
the 2006 Plan and is  qualified  by its  entirety by  reference to the 2006 Plan
document,  a copy of which  has been  filed  with the  Securities  and  Exchange
Commission  and as  Exhibit A to this  proxy  statement.  Capitalized  terms not
otherwise  defined in this summary  have the meanings  given to them in the 2006
Plan.  Any  stockholder of the Company who wishes to obtain a copy of the actual
2006 Plan may do so upon  written  request  to the  Corporate  Secretary  at the
Company's principal executive offices in Shrewsbury, New Jersey.

General. The 2006 Plan will authorize the grant of Stock Units,  Options,  Stock
Appreciation Rights,  Restricted Stock, Deferred Stock, Stock Bonuses, and other
equity-based  awards  (collectively,  "Awards").  Options granted under the 2006
Plan may be either  "incentive  stock  options" as defined in section 422 of the
Internal  Revenue Code of 1986, as amended (the "Code"),  or nonqualified  stock
options,  as  determined  by  the  Compensation  Committee  of  our  Board  (the
"Committee").

Number of Shares  Authorized.  The  number of shares of Common  Stock  initially
available  for  award  under the 2006 Plan is  800,000  shares.  If any Award is
forfeited,  or if  any  Option  terminates,  expires  or  lapses  without  being
exercised,  shares of Common Stock subject to such Award will again be available
for future grant.  In addition,  any shares under the 2006 Plan that are used to
satisfy award  obligations  under the plan of another entity that is acquired by
the Company will not count  against the  remaining  number of shares  available.
Finally, if there is any change in the Company's corporate  capitalization,  the
Committee in its sole discretion may cancel and make  substitutions of Awards or
may adjust the number of shares  available  for award  under the 2006 Plan,  the
number and kind of shares covered by Awards then outstanding under the 2006 Plan
and the exercise price of outstanding Options and Stock Appreciation Rights.

Administration.  The Committee  will  administer  the 2006 Plan.  Subject to the
other provisions of the 2006 Plan, the Committee has the authority to:

     o   interpret the 2006 Plan;

     o   establish and amend rules and regulations relating to the 2006 Plan;

     o   select the  participants and determine the type of Awards to be made to
         participants,  the  number of shares  subject  to Awards and the terms,
         conditions,  restrictions and limitations of Awards; provided, however,
         that the Company's  Nominating and Corporate Governance Committee shall
         recommend to the Board,  and the Board,  not the Committee,  shall have
         the  sole  and  absolute  authority  to grant  Awards  to  non-employee
         directors; and

     o   make all other  determinations  it deems necessary or advisable for the
         administration of the 2006 Plan.

Eligibility.  The 2006 Plan  provides  that Awards may be granted to  employees,
non-employee  directors  and

                                       9




consultants of the Company or its  subsidiaries.  Incentive stock options may be
granted only to employees. The maximum number of shares that may be awarded to a
participant  in the form of Options or SARs,  any calendar year shall not exceed
300,000 in the  aggregate.  The maximum  payment to an  individual  based on the
achievement  of  performance  goals  applicable  to  Awards of  Deferred  Stock,
Restricted Stock, Stock Bonuses and/or Stock Units may not exceed $1,500,000 for
any performance period.

Each Award  granted  under the 2006 Plan will be  evidenced  by a written  award
agreement between the participant and the Company, which will describe the Award
and state the terms and conditions applicable to such Award. The principal terms
and conditions of each particular type of Award are described below.

Performance Goals

The Award  agreements  may  provide  for  vesting or earning  the Award based on
achievement  of  performance  goals.  Performance  goals may be established on a
Company-wide  basis;  with  respect  to one  or  more  subsidiary  corporations,
business  units,  divisions,  department,  or functions,  and in either absolute
terms or relative to the performance of one or more  comparable  companies or an
index covering multiple  companies.  Performance  goals, the number of shares or
units to which they  pertain,  the time and manner of payment of the Award shall
be specified in the Award agreement.

Except in the case of Awards intended to meet the requirements of Section 162(m)
of the Code applicable to qualified  performance-based  compensation ("Qualified
Performance-Based  Awards"), the Committee may modify performance goals in whole
or in  part,  during  the  performance  period,  as  it  deems  appropriate  and
equitable.  In the case of Qualified  Performance-Based  Awards,  the applicable
performance goals are limited to one or more of the following:

     o   the price of Common Stock;

     o   the market  share of the Company and any  subsidiary  (or any  business
         unit thereof);

     o   sales by the Company or any subsidiary (or any business unit thereof);

     o   earnings per share of Common Stock;

     o   return on stockholder equity of the Company;

     o   costs of the Company or any subsidiary (or any business unit thereof);

     o   cash flow of the Company (or any business unit thereof);

     o   return  on  total  assets  of the  Company  or any  subsidiary  (or any
         business unit thereof);

     o   return on  invested  capital of the Company or any  subsidiary  (or any
         business unit thereof);

     o   return on net assets of the Company or any  subsidiary (or any business
         unit thereof);

     o   operating income of the Company or any subsidiary (or any business unit
         thereof); and

     o   net  income of the  Company or any  subsidiary  (or any  business  unit
         thereof).

Stock Units and Stock Bonuses

Awards  of Stock  Units  may be made  under  the 2006  Plan.  A Stock  Unit is a
book-entry  unit with a value  equal to one share of  Common  Stock.  A grant of
Stock Units will vest and become payable to the participant  upon termination of
employment  or  other  service  or  upon  other  future  events,  including  the
achievement   during  a  specified   performance  period  of  performance  goals
established by the Committee. Payment of Stock Units shall be made in cash equal
to the fair  market  value of the  shares  of  Common  Stock to which  the Award
relates multiplied by the number of Stock Units granted.

Stock  Bonuses  may be granted to  participants  entitling  them to payment of a
specified  number of shares of Common Stock,  which shares may (but need not) be
payable at a future date and subject to such  conditions as the Committee  shall
determine  appropriate,  including achievement of performance goals specified at
the time of grant.

Options

An Option is the right to purchase shares of Common Stock for a specified period
of time at a fixed  price (the

                                       10



"exercise  price").  As of April 12, 2006,  the closing  price per share for our
Common Stock was $12.75.  Each Option agreement will specify the exercise price,
the type of Option, the term of the Option, the date when the Option will become
exercisable and any applicable  performance  goals.  Incentive stock options may
only be granted to employees,  shall only be  transferable  by will or under the
laws of descent and distribution,  and, during the participant's  lifetime,  may
only be exercised by the  participant.  No Award of incentive  stock options may
permit the fair market value of any such Options  becoming first  exercisable in
any calendar year to exceed $100,000.

Exercise Price.  The Committee will determine the exercise price of an Option at
the time the Option is granted.  The  exercise  price under an  incentive  stock
option  or  non-qualified  stock  option  will not be less than 100% of the fair
market  value of Common  Stock on the date the Option is granted.  However,  any
optionee who owns more than 10% of the  combined  voting power of all classes of
the  Company's  outstanding  Common  Stock  (a "10%  Stockholder")  will  not be
eligible for the grant of an incentive stock option unless the exercise price of
the  incentive  stock  option is at least 110% of the fair  market  value of the
Common Stock on the date of grant.

Consideration. The means of payment for shares issued upon exercise of an Option
will be  specified in each Option  agreement  and  generally  may be made by the
participant  in  cash,  in a cash  payment  through  a broker  or bank  from the
proceeds of the sale of the shares purchased  through the exercise of the Option
(a "cashless exercise"),  with the Committee's consent, in whole or in part with
shares of Common Stock owned by the  participant  for at least six months,  or a
combination  of  the  foregoing  methods.   The  Committee  may  also  permit  a
non-qualified  Option to be  exercised  with  Restricted  Stock that has not yet
vested,  in which case the shares  received  upon  exercise of the Option  will,
unless  otherwise   determined  by  the  Committee,   be  subject  to  the  same
restrictions as the Restricted Stock.

Term of the Option. The term of an Option granted under the 2006 Plan will be no
longer than ten years from the date of grant.  In the case of an Option  granted
to a 10% Stockholder,  the term of an incentive stock option will be for no more
than five years from the date of grant.

Stock Appreciation Rights

A stock  appreciation  right  ("SAR")  entitles the  recipient to receive,  upon
exercise of the SAR, the increase in the fair market value of a specified number
of shares of Common  Stock  from the date of the grant of the SAR to the date of
exercise,  payable in cash,  shares of Common Stock,  shares of Deferred  Stock,
shares of Restricted Stock or any combination  thereof. An SAR may be granted in
tandem with an Option or separately (a "free-standing SAR"). The Committee shall
set the  exercise  price of an SAR which  shall not be less than the Fair Market
Value of the  underlying  Common  Stock on the date of the grant.  Any grant may
specify a waiting  period or periods before the SAR may become  exercisable  and
permissible dates or periods on or during which the SAR shall be exercisable. No
SAR may be exercised more than ten years from the grant date.

Restricted and Deferred Shares

An Award of Restricted  Stock is a grant to the recipient of a specified  number
of shares of Common Stock which are subject to forfeiture upon specified  events
during the restriction  period.  Each grant of Restricted Stock will specify the
length of the  restriction  period and will include  restrictions on transfer to
third parties during the restriction period.

An Award of  Deferred  Stock is an  agreement  by the  Company to deliver to the
recipient a specified number of shares of Common Stock at the end of a specified
deferral period,  subject to the fulfillment of any conditions  specified by the
Committee.

General Provisions

Vesting.  Each  grant of  Stock  Units  and  Stock  Bonuses  shall  specify  the
conditions,  including performance goals, if applicable,  that must be satisfied
in order for payment to be made. Each grant of Options or SARs shall specify the
length of service and/or any applicable  performance goals that must be achieved
before it becomes exercisable.  Each

                                       11



grant of Restricted  Stock shall specify the duration of the restriction  period
and any  other  conditions  that  under  which  the  Restricted  Stock  would be
forfeitable to the Company,  including any applicable  performance  goals.  Each
grant of  Deferred  Stock  shall  specify  the  deferral  period  and any  other
conditions  to which  future  delivery  of shares to the  recipient  is subject,
including any applicable performance goals. Each grant may provide for the early
exercise  rights or termination of a restriction or deferral period in the event
of a Change in Control or similar transaction or event.

Dividends/Ownership Rights. Unless otherwise provided by the Committee, an Award
of Bonus Stock or Restricted Stock entitles the participant to dividend,  voting
and other ownership rights during the restriction  period.  An Award of Deferred
Stock does not  entitle the  participant  to any  transfer,  voting or any other
ownership  rights with  respect to the  Deferred  Shares.  Any grant of Deferred
Stock may provide for the payment of dividend  equivalents in cash or additional
shares.

Nontransferability of Awards. In general,  during a participant's  lifetime, his
or her Awards  shall be  exercisable  only by the  participant  and shall not be
transferable  other than by will or laws of descent and  distribution.  However,
the Committee may provide for limited lifetime  transfers of Awards,  other than
incentive stock options, to certain family members. In addition,  an Award grant
may provide for additional transfer  restrictions on vested shares received upon
exercise,  delivery, or payment of an Award,  including restrictions relating to
minimum share ownership requirements applicable to any participant.

Termination of Employment, Consulting Services, or Other Services. The Committee
may take actions which it believes  equitable under the  circumstances or in the
best  interests  of the Company with respect to Awards that are not fully vested
in the  event of  termination  of  employment  or  service  by  reason of death,
disability,  normal  retirement,  early  retirement  with  the  consent  of  the
Committee,  other  termination  or a leave of absence  that is  approved  by the
Committee,  or in the event of hardship or other special  circumstances that are
approved by the Committee.  Unless otherwise determined by the Committee, upon a
participant's  termination  for  Cause,  all  outstanding  Options or SARs shall
expire and all shares of Restricted Stock still subject to a restriction  period
and Deferred Stock still subject to a deferral period shall be forfeited.

Award  Deferrals.  An Award Agreement may provide for the deferral of any Award,
dividend or dividend  equivalent  until a specified time and under such terms as
established by the Committee.

Change in Control

Unless  otherwise  determined  by the  Committee,  in the  event of a Change  in
Control (as  defined in the 2006 Plan),  all Awards that have not vested or been
cancelled or forfeited  shall  become fully vested and  exercisable  immediately
upon such event,  provided the Award has not been forfeited and the  participant
has  remained  employed  by, or  otherwise in the service of, the Company at the
date of such  event.  Alternatively,  the  Committee  may  cancel  and  cash out
outstanding  Awards or arrange for the  substitution of outstanding  Awards with
new  awards of equal  value.  If a Change of Control  occurs  during one or more
performance  periods for which the Committee has not yet made a determination as
to whether the  applicable  performance  objectives  were met,  the  performance
period shall  immediately  terminate and it shall be assumed that the applicable
performance  objectives  have been  attained at a level of one  hundred  percent
(100%).  A  participant  shall be  considered  to have earned,  and therefore be
entitled to receive,  payment of a prorated  portion of the  performance  Awards
that he or she would have received for the whole  performance  period,  based on
the portion of the performance period completed before the Change in Control. In
addition,  any Award deferred by a participant may be payable in connection with
such Change in Control.

Effective Date, Amendments, and Termination of the 2006 Plan. The 2006 Plan will
be effective upon its approval by Company  stockholders.  The Board of Directors
has the  authority  to amend or terminate  the 2006 Plan at any time;  provided,
however,  that  stockholder  approval is required  for any  amendment  which (i)
materially  increases  the number of shares  available for Awards under the 2006
Plan (other than to reflect a change in the Company's capital  structure),  (ii)
materially  increases  the  maximum  number of shares  allowed for grants to any
participant,  (iii) materially  changes the class of persons eligible to receive
grants of Awards or the types of  Awards  available  under the 2006  Plan,  (iv)

                                       12



materially increases the benefits to participants under the 2006 Plan, or (v) as
otherwise required by applicable law or the NASDAQ rules.  Further, no Award may
be repriced,  replaced,  regranted  through  cancellation,  or modified  without
stockholder  approval.  Finally, the 2006 Plan will terminate  automatically ten
years after it is approved by stockholders.

Certain Federal Income Tax Considerations

The  following   discussion  is  a  summary  of  certain   federal   income  tax
considerations  that may be  relevant  to  participants  in the 2006  Plan.  The
discussion  is for general  informational  purposes only and does not purport to
address  specific  federal  income  tax  considerations  that  may  apply  to  a
participant  based on his or her particular  circumstances,  nor does it address
state or local income tax or other tax considerations  that may be relevant to a
participant.

Stock Units and Stock Bonuses

A  participant  realizes no taxable  income and the Company is not entitled to a
deduction when Stock Units or Stock Bonuses payable in the future and subject to
conditions  such as the achievement of performance  goals (a "Conditional  Stock
Bonus") are awarded.  Stock Bonuses not subject to future conditions  constitute
taxable income to the participant  when granted and the Company is entitled to a
corresponding deduction.  When the Stock Units or Conditional Stock Bonuses vest
and become payable as a result of the  satisfaction  of the terms and conditions
on such Award, including,  if applicable,  achievement of performance goals, the
participant will realize ordinary income equal to the amount of cash received or
the fair  market  value of the shares  received  minus any  amount  paid for the
shares, and, subject to Section 162(m) of the Code, the Company will be entitled
to a corresponding deduction.

A  participant's  tax basis in shares of Common Stock received upon payment will
be equal to the fair market value of such shares when the  participant  receives
them.  Upon a sale of the shares,  the  participant  will realize  short-term or
long-term capital gain or loss, depending upon whether the shares have been held
for more  than one year at the time of sale.  Such gain or loss will be equal to
the difference  between the amount  realized upon the sale of the shares and the
tax basis of the shares in the participant's hands.

Deferred Stock

A  participant  realizes no taxable  income and the Company is not entitled to a
deduction when Deferred Stock is awarded. When the deferral period for the Award
ends and the participant  receives shares of Common Stock,  the participant will
realize  ordinary  income  equal to the fair market  value of the shares at that
time,  and,  subject to Section 162(m) of the Code, the Company will be entitled
to a  corresponding  deduction.  A  participant's  tax basis in shares of Common
Stock received at the end of a deferral  period will be equal to the fair market
value of such  shares  when the  participant  receives  them.  Upon  sale of the
shares,  the participant  will realize  short-term or long-term  capital gain or
loss, depending upon whether the shares have been held for more than one year at
the time of sale. Such gain or loss will be equal to the difference  between the
amount  realized  upon the sale of the shares and the tax basis of the shares in
the participant's hands.

Restricted Stock

Restricted  Stock  received  pursuant to Awards will be considered  subject to a
substantial risk of forfeiture for federal income tax purposes. If a participant
who receives such Restricted  Stock does not make the election  described below,
the participant  realizes no taxable income upon the receipt of Restricted Stock
and the Company is not entitled to a deduction at such time. When the forfeiture
restrictions  with respect to the Restricted  Stock lapse,  the participant will
realize  ordinary  income  equal to the fair market  value of the shares at that
time,  and,  subject to Section 162(m) of the Code, the Company will be entitled
to a corresponding deduction. A participant's tax basis in Restricted Stock will
be equal to their fair market value when the forfeiture  restrictions lapse, and
the  participant's  holding period for the shares will begin when the forfeiture
restrictions  lapse.  Upon sale of the  shares,  the  participant  will  realize
short-term  or long-term  gain or loss,  depending  upon whether the shares have
been held for more than one year at the time of

                                       13



sale.  Such  gain or loss will be equal to the  difference  between  the  amount
realized  upon the sale of the  shares  and the tax  basis of the  shares in the
participant's hands.

Participants receiving Restricted Stock may make an election under Section 83(b)
of the Code with respect to the shares. By making a Section 83(b) election,  the
participant  elects to realize  compensation  income with  respect to the shares
when the shares are received rather than at the time the forfeiture restrictions
lapse. The amount of such  compensation  income will be equal to the fair market
value of the shares when the  participant  receives them (valued  without taking
the  restrictions  into  account),  and  the  Company  will  be  entitled  to  a
corresponding  deduction at that time. By making a Section 83(b)  election,  the
participant will realize no additional  compensation  income with respect to the
shares when the forfeiture  restrictions  lapse, and will instead recognize gain
or loss with  respect to the shares when they are sold.  The  participant's  tax
basis in the shares with respect to which a Section 83(b)  election is made will
be equal to their fair market value when  received by the  participant,  and the
participant's  holding period for such shares begins at that time. If,  however,
the shares are subsequently  forfeited to the Company,  the participant will not
be  entitled  to claim a loss with  respect  to the  shares to the extent of the
income  realized  by the  participant  upon  the  making  of the  Section  83(b)
election.  To  make a  Section  83(b)  election,  a  participant  must  file  an
appropriate  form of election with the Internal  Revenue Service and with his or
her employer, each within 30 days after shares of restricted stock are received,
and the participant must also attach a copy of his or her election to his or her
federal income tax return for the year in which the shares are received.

Generally,  during the restriction period, dividends and distributions paid with
respect to Restricted Stock will be treated as compensation income (not dividend
income) received by the participant.  Dividend payments received with respect to
shares of restricted stock for which a Section 83(b) election has been made will
be treated as dividend  income,  assuming  the Company has  adequate  current or
accumulated earnings and profits.

Non-Qualified Options

A  participant  realizes no taxable  income and the Company is not entitled to a
deduction  when  a  non-qualified   option  is  granted.   Upon  exercise  of  a
non-qualified  option,  a participant  will realize ordinary income equal to the
excess of the fair market value of the shares  received over the exercise  price
of the  non-qualified  option,  and,  subject to Section 162(m) of the Code, the
Company will be entitled to a corresponding deduction. A participant's tax basis
in the shares of Common Stock received upon exercise of a  non-qualified  option
will be equal to the fair market value of such shares on the exercise  date, and
the  participant's  holding period for such shares will begin at that time. Upon
sale of the shares of Common Stock  received  upon  exercise of a  non-qualified
option,  the participant  will realize  short-term or long-term  capital gain or
loss,  depending  upon whether the shares have been held for more than one year.
The  amount  of such gain or loss will be equal to the  difference  between  the
amount realized in connection with the sale of the shares, and the participant's
tax basis in such  shares.Under the 2006 Plan,  non-qualified  options may, with
the consent of the  Committee,  be  exercised in whole or in part with shares of
Common  Stock or  Restricted  Stock held by the  participant.  Payment in Common
Stock or Restricted  Stock will be treated as a tax-free  exchange of the shares
surrendered for an equivalent number of shares of Common Stock received, and the
equivalent  number of  shares  received  will have a tax basis  equal to the tax
basis of the  surrendered  shares.  In the case of payment in Restricted  Stock,
however,  the  equivalent  number of shares of Common  Stock  received  shall be
subject to the same risks of  forfeiture  or  restrictions  on transfer as those
that  applied to the  Restricted  Stock  surrendered.  The fair market  value of
shares of Common  Stock  received in excess of the number of shares  surrendered
will be treated as  ordinary  income and such  shares  have a tax basis equal to
their fair market value on the date of the exercise of the non-qualified option.

Incentive Stock Options

A  participant  realizes no taxable  income and the Company is not entitled to a
deduction when an incentive  stock option is granted or exercised.  Provided the
participant  meets the  applicable  holding period  requirements  for the shares
received upon exercise of an incentive  stock option (two years from the date of
grant  and one year  from  the date of  exercise),  gain or loss  realized  by a
participant  upon sale of the shares  received  upon  exercise will be long-term
capital gain or loss,  and the Company will not be entitled to a deduction.  If,
however,  the  participant  disposes of

                                       14



the  shares  before  meeting  the  applicable  holding  period  requirements  (a
"disqualifying  disposition"),  the participant  will realize ordinary income at
that time  equal to the  excess of the fair  market  value of the  shares on the
exercise date over the exercise price of the incentive stock option.  Any amount
realized upon a disqualifying  disposition in excess of the fair market value of
the shares on the exercise date of the incentive stock option will be treated as
capital  gain and will be treated as  long-term  capital gain if the shares have
been held for more than one year. If the sales price is less than the sum of the
exercise price of the incentive stock option and the amount included in ordinary
income due to the  disqualifying  disposition,  this amount will be treated as a
short-term  or long-term  capital loss,  depending  upon whether the shares have
been held for more than one year. Notwithstanding the above, individuals who are
subject to Alternative  Minimum Tax may recognize  ordinary income upon exercise
of an incentive stock option.  Under the 2006 Plan, incentive stock options may,
with the consent of the Committee,  be exercised in whole or in part with shares
of Common Stock held by the  participant.  Such an exercise will be treated as a
tax-free  exchange  of the  shares of Common  Stock  surrendered  (assuming  the
surrender of the  previously-owned  shares does not  constitute a  disqualifying
disposition of those shares) for an equivalent  number of shares of Common Stock
received,  and the  equivalent  number of shares  received will have a tax basis
equal  to the tax  basis of the  surrendered  shares.  Shares  of  Common  Stock
received in excess of the number of shares  surrendered will have a tax basis of
zero.

SARs

A  participant  realizes no taxable  income and the Company is not entitled to a
deduction  when a SAR is granted.  Upon  exercising  a SAR, a  participant  will
realize  ordinary income in an amount equal to the cash or the fair market value
of the shares  received  minus any amount paid for the shares,  and,  subject to
Section  162(m) of the Code,  the Company  will be  entitled to a  corresponding
deduction. A participant's tax basis in the shares of Common Stock received upon
exercise of a SAR will be equal to the fair  market  value of such shares on the
exercise date, and the  participant's  holding period for such shares will begin
at that time.  Upon a sale of the shares of Common Stock  received upon exercise
of a SAR, the participant will realize  short-term or long-term  capital gain or
loss,  depending  upon whether the shares have been held for more than one year.
The  amount  of such gain or loss will be equal to the  difference  between  the
amount realized in connection with the sale of the shares, and the participant's
tax basis in such shares.

Deferral Elections

Generally,  Awards  deferred by recipients  are not taxable until the Awards are
paid to the  recipient.  At that time,  the amounts will be includible in income
and the Company will be entitled to a deduction

Section 162(m) Limitations

Section  162(m) of the Code limits the  deductibility  of  compensation  paid to
certain  executive  officers,  unless  the  compensation  is  "performance-based
compensation"  and meets  certain  other  requirements  outlined in Code Section
162(m) and related regulations ("Qualified Performance-Based Awards"). If Awards
to such persons are intended to qualify as Qualified  Performance-Based  Awards,
the  2006  Plan   requires   that  the  maximum   fair   market   value  of  any
performance-based  Award or Awards that may be granted to the  recipient  during
any one performance period is $1,000,000.

Withholding

The Company is entitled to deduct from the payment of any Award (whether made in
stock or in cash)  all  applicable  income  and  employment  taxes  required  by
federal,  state,  local  or  foreign  law to be  withheld,  or may  require  the
participant  to pay such  withholding  taxes to the  Company as a  condition  of
receiving payment of the Award. The Committee may allow a participant to satisfy
his or her withholding obligations by directing the Company to retain the number
of shares  necessary to satisfy the  withholding  obligation,  or by  delivering
shares held by the participant to the Company in an amount  necessary to satisfy
the withholding obligation.

THE BOARD  RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL TO APPROVE THE 2006 STOCK
INCENTIVE PLAN.

                                       15



SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section  16(a) under the  Exchange  Act  requires  the  Company's  officers  and
Directors  and  holders of more than ten  percent of the  Company's  outstanding
shares of Common  Stock to file  reports of  ownership  and changes in ownership
with the  Securities  and  Exchange  Commission  and to furnish the Company with
copies of these reports. Based solely upon a review of such forms, or on written
representations from certain reporting persons that no reports were required for
such persons,  the Company  believes that during 2005 all required events of its
officers, Directors and 10% stockholders required to be so reported, were timely
filed.

EXECUTIVE COMPENSATION

The following  table sets forth,  for the last three  completed  fiscal years, a
summary of the annual and long-term  compensation for services in all capacities
of the Named Executive Officers.




                                             Summary Compensation Table
                                                                          Long-Term
                               Annual Compensation Awards (*)             Compensation (**)
                               ---------------------------------------    -----------------------------------------
                                                                          Securities
                                                                          Underlying        Other
Name and Position              Year      Salary ($)      Bonus ($)        Options (#)       Compensation (1)
----------------               ----      ----------      ---------        -----------       ----------------
                                                                                    

William H. Willett,            2005        225,000        101,443            14,250  (3)            7,000
Chairman(2)                    2004        225,000        334,000           125,000  (4)            6,424
                               2003        225,000        196,000                 --                6,855

Simon Nynens,                  2005        175,000         91,253            14,250  (3)            6,781
President and Chief            2004        162,997        123,238           100,000  (4)            6,180
Executive Officer(5)           2003        140,000         97,500                 -                 5,280

Jeffrey Largiader, Vice        2005        149,375         47,438             5,000  (3)            6,127
President Sales &              2004        144,583        104,856            40,000  (4)            6,421
Marketing                      2003        140,000         87,250                 --                5,895

Vito Legrottaglie,             2005        138,730         37,907             5,000  (3)            4,713
Vice President MIS (6)         2004        130,000         60,000            40,000  (4)            5,795
                               2003        118,750         50,000            20,000  (7)            4,046

Dan Jamieson,                  2005        137,500         57,525             5,000  (3)            5,175
Vice President and             2004        116,917         70,000            40,000  (4)            5,907
General Manager-Lifeboat       2003         83,000         67,000                --                 4,308




(*)  The  cost of  certain  perquisites  and  other  personal  benefits  are not
     included  because they did not exceed,  in the case of any named  executive
     officer, the lesser of $50,000 or 10% of the total of the annual salary and
     bonus for such executive.

(**) The Company did not make any restricted stock awards or payouts pursuant to
     long-term  incentive plans to the Named Executive  Officers during the last
     three completed fiscal years.

(1)  Represents  (i)  matching   contributions  paid  by  the  Company  to  such
     executive's  account  under  the  Company's  401(k)  Savings  Plan and (ii)
     premiums  paid by the  Company in respect  of term life  insurance  for the
     benefit of such executive.

                                       16



(2)  Mr. Willet was President  and Chief  Executive  officer for all of 2005 and
     resigned from these positions on January 9, 2006.

(3)  Represents  options to  purchase  Common  Stock with an  exercise  price of
     $12.85 per share, vesting immediately.

(4)  Represents options to purchase Common Stock with an exercise price of $8.03
     per share, vesting immediately.

(5)  Mr. Nynens was Executive Vice President and Chief  Financial  officer until
     his  appointment  on January 9, 2006 to the position of President and Chief
     Executive Officer.

(6)  The Company hired Mr.  Legrottaglie in February 2003. For 2003,  represents
     the portion of his annual  2003 salary of $130,000  paid in 2003 after such
     date.

(7)  Represents options to purchase Common Stock with an exercise price of $2.01
     per share, vesting immediately.

EMPLOYEE BENEFIT PLANS

The Company provides all employees,  including  executive  officers,  with group
medical,  dental  and  disability  insurance  on  a  non-discriminatory   basis.
Employees are required to contribute  20% of the premium costs of such policies.
The Company has a 401(k) savings and  investment  plan intended to qualify under
Section 401(a) of the Code, for our domestic  employees,  which permits employee
salary  reductions for tax-deferred  savings purposes pursuant to Section 401(k)
of the Code. The Company matches 50% of domestic  employee  contributions  up to
the first 6% of compensation.  The Company's total  contributions  for 2005 were
approximately $121,000.

The Company  maintains a performance  bonus plan for our senior executives which
provides for a bonus of up to 120% of the  executive's  base salary in the event
certain performance targets, based upon revenue and operating profitability, are
achieved  and  also  provides  for  additional   incentive  bonuses  based  upon
pre-established  metrics (the "Performance  Bonus Plan").  The Performance Bonus
Plan also provides for an increase in the available  bonus pool for  performance
in excess of a  specified  net income  after tax  performance  target (the "over
target  bonus").  Subject to  approval  by its Board of  Directors,  the Company
anticipates  that a similar type of bonus plan will  continue in effect for 2006
and subsequent  fiscal years and that bonuses under this plan in the 2006 fiscal
year  and  thereafter  will  be  based  on  the  Company  meeting  or  exceeding
profitability targets established by the Compensation Committee.

STOCK OPTION PLANS

1995 Stock Plan.  The purpose of the Company's  1995 Stock Plan (the "1995 Stock
Plan")  is  to  provide  incentives  to  officers,   Directors,   employees  and
consultants of the Company. Under the 1995 Stock Plan, officers and employees of
the Company and any present or future subsidiary are provided with opportunities
to purchase shares of Common Stock of the Company  pursuant to options which may
qualify as ISOs, or which do not qualify as ISOs ("Non-Qualified  Options") and,
in  addition,  such  persons  may be  granted  awards  of stock  in the  Company
("Awards") and  opportunities  to make direct  purchases of stock in the Company
("Purchases").  Both ISOs and  Non-Qualified  Options are  referred to hereafter
individually as an "Option" and collectively as "Options."  Options,  Awards and
Purchases  are referred to hereafter  collectively  as "Stock  Rights." The 1995
Stock Plan contains  terms and  conditions  relating to ISOs necessary to comply
with the provisions of Section 422 of the Code.

The 1995  Stock  Plan  authorized  the grant of Stock  Rights to  acquire  up to
1,137,500  shares of Common  Stock.  As of April 25,  2006,  a total of  663,463
shares of Common Stock are subject to  outstanding  Options under the 1995 Stock
Plan at exercise  prices ranging from $2.01 to $12.85 per share.  The 1995 Stock
Plan expired and terminated on April 21, 2005 (except as to Options  outstanding
on that date) and no more grants may be made under the 1995 Stock Plan.

The 1995 Stock Plan requires that each Option shall expire on the date specified
by the  Compensation  Committee,  but not more than ten  years  from its date of
grant in the case of ISOs and ten years and one day in the case of Non-Qualified
Options.  However,  in the case of any ISO  granted  to an  employee  or officer
owning more than 10% of the total combined  voting power of all classes of stock
of the Company or any present or future subsidiary, the ISO expires no more than
five years from its date of grant.

1995 Non-Employee  Director Plan. The purpose of the Company's 1995 Non-Employee
Director  Plan (the "1995  Director  Plan") is to promote the  interests  of the
Company  by  providing  an  inducement  to obtain and  retain  the  services  of

                                       17



qualified  persons who are not  employees or officers of the Company to serve as
members of its Board of Directors ("Outside Directors").  The 1995 Director Plan
authorized  the grant of options  for up to 187,500  shares of Common  Stock and
provides  for  automatic  grants  of  nonqualified   stock  options  to  Outside
Directors.

Under the 1995 Option Plan, each current Outside Director has received, and each
Outside  Director  who first  joined the Board  after  April 1995  automatically
received at that time,  options to purchase 18,750 shares of Common Stock. As of
April 25,  2006,  a total of  81,000  shares of  Common  Stock  are  subject  to
outstanding Options under the 1995 Non-Employee  Director Stock Plan at exercise
prices  ranging  from $2.13 to $7.50 per share.  All options  granted to Outside
Directors  have an exercise  price equal to 100% of the fair market value on the
date of grant.  The 1995 Director Plan requires that options granted  thereunder
will  expire on the date which is ten years from the date of grant.  Each option
granted  under the 1995  Director  Plan  becomes  exercisable  over a  five-year
period,  and vests in an  installment  of 20% of the total option grant upon the
expiration of one year from the date of the option grant,  and thereafter  vests
in equal  quarterly  installments  of 5%. The 1995 Director Plan expired and was
terminated on April 21, 2005 (except as to Options outstanding on that date) and
no more grants may be made under the 1995 Director Plan.

TOTAL OPTIONS EXERCISED IN 2005 AND YEAR-END VALUES

This  table  gives  information  for  options  exercised  by each  of the  Named
Executive  Officers in 2005 and the value (stock price less  exercise  price) of
the remaining  options held by those executive  officers at year-end,  using the
closing price of $11.93 of the Company's Common Stock on December 31, 2005.




--------------------- ---------------- --------------- ------------------------------------ -------------------------------------
                          Shares                              Number of Securities                  Value of Unexercised
                        acquired on        Value             Underlying Unexercised                 In The Money Options
                       Exercise (#)     Realized ($)      Options/SAR's at FY-End (#)                at Fiscal Year-End
--------------------- ---------------- --------------- ------------------------------------ -------------------------------------
Name                                                    Exercisable      Unexercisable      Exercisable($)    Unexercisable ($)
--------------------- ------ --------- --------------- -------------- --------------------- ---------------- --------------------
                                                                                            
William Willett                50,000        $585,950        308,070                50,000       $2,040,563             $477,000
Simon Nynens                        0              $0        114,320                     0         $390,000                   $0
Jeffrey Largiader                   0              $0         97,500                     0         $670,500                   $0
Vito Legrottaglie              10,000         $60,500         55,000                     0         $254,000                   $0
Dan Jamieson                        0              $0         45,000                     0         $156,000                   $0
--------------------- ---------------- --------------- -------------- --------------------- ---------------- --------------------



OPTION GRANTS IN 2005

This table shows all options to purchase the  Company's  Common Stock granted to
each of our Named  Executive  Officers in 2005 and the  potential  value of such
grants at stock price appreciation rates of 0%, 5% and 10%,  compounded annually
over  the  maximum  ten-year  term  of the  options.  The 5% and  10%  rates  of
appreciation  are  required to be disclosed by SEC rules and are not intended to
forecast possible future appreciation, if any, in the Company's stock price.

                                       18






----------------------- --------------------------------------------------------- --------------------------------
                                           Individual Grants                      Potential Realizable Value
                        --------------------------------------------------------- --------------------------------
                          Number of      % of Total      Exercise    Expiration       at Assumed Annual Rate
                         Securities       Options         Price       Date (3)            of Stock Price
                         Underlying      Granted to     Per Share                          Appreciation
                           Options      Employees in    ($/Sh) (2)                      for Option Term (4)
         Name            Granted (1)    Fiscal Year                                  5% ($)          10% ($)
----------------------- -------------- --------------- ------------- ------------ ------------- ------------------
                                                                                   

William Willett                14,320          29.44%         12.85    4/21/2015       115,724            293,268
Simon Nynens                   14,320          29.44%         12.85    4/21/2015       115,724            293,268
Jeffrey Largiader               5,000          10.28%         12.85    4/21/2015        40,406            102,398
Vito Legrottaglie               5,000          10.28%         12.85    4/21/2015        40,406            102,398
Dan Jamieson                    5,000          10.28%         12.85    4/21/2015        40,406            102,398
----------------------- -------------- --------------- ------------- ------------ ------------- ------------------



(1)      All stock options granted in 2005 to the Named Executive  Officers were
         granted under the 1995 Stock Plan and vest immediately.

(2)      The exercise price per share of options  granted  represented  the fair
         market value of the  underlying  shares of Common Stock on the date the
         options were granted.

(3)      The options  granted  have a term of ten years and one day,  subject to
         earlier  termination  upon the  occurrence of certain events related to
         termination of employment.

(4)      The potential realizable value is calculated based upon the term of the
         option at its time of grant (ten years) and one day.  It is  calculated
         by assuming  that the stock price on the date of grant  appreciates  at
         the indicated annual rate,  compounded  annually for the entire term of
         the option,  and that the option is exercised  and sold on the last day
         of its term for the appreciated stock price.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets forth information,  as of December 31, 2005,  regarding
securities  authorized for issuance upon the exercise of stock options under all
of the Company's equity compensation plans.




------------------------------------ ------------------------- ----------------- -----------------------------------------------
                                               (a)                   (b)                              (c)
                                                                   Weighted
                                                                   Average          Number of Securities Remaining Available
                                     Number of Securities to    Exercise Price          for Future Issuance Under Equity
                                     be Issued Upon Exercise    of Outstanding      Compensation Plans (Excluding Securities
Plan Category                         of Outstanding Options       Options                  Reflected in Column (a))
------------------------------------ ------------------------- ----------------- -----------------------------------------------
                                                                                             

Equity Compensation Plans Approved             886,287                 6.49                            --
by Stockholders (1)
                                     ------------------------- ----------------- -----------------------------------------------
Equity Compensation Plans Not                   50,000                 2.39                            --
Approved by Stockholders  (2)
------------------------------------ ------------------------- ----------------- -----------------------------------------------
     Total                                     936,287                 6.60                            --
------------------------------------ ------------------------- ----------------- -----------------------------------------------



                                       19


(1)  Consists of options  available  for grant under the 1995 Stock Plan and the
1995 Director Plan. See "Stock Option Plans" in this proxy statement.

(2) Includes 50,000 stock appreciation  rights granted to Mr. Willett as part of
his employment  agreement.  If there shall be a change in control, as defined in
Mr. Willett's employment  agreement,  prior to the termination of the employment
period,  the Company will be required to pay to Mr. Willett a bonus equal to the
amount,  if any,  by which  the  value per share  received  by  stockholders  in
connection  with the change of control  exceeds the exercise  price of the stock
appreciation rights.

EMPLOYMENT AND SEVERANCE AGREEMENTS

Each of the Named Executive Officers has entered into an agreement that includes
a  covenant  not-to-compete  and  a  confidentiality   provision.  The  covenant
not-to-compete   prohibits  the  executive  for  a  period  of  one  year  after
termination from engaging in a competing business.  Such covenant also prohibits
the executive from directly or indirectly  soliciting the Company's customers or
employees.

On January 9, 2006,  the company  appointed  Simon  Nynens  President  and Chief
Executive  Officer and entered into an employment  agreement  which expires June
30, 2007. The agreement  provides for a base salary of $250,000 and a bonus,  if
certain targets are met.  Additionally,  should the  stockholders of the company
approve a long-term incentive plan consisting of stock options, restricted stock
and/or other equity-based  compensation ( a "LTIP"), Mr. Nynens will be eligible
to  participate  in the LTIP  based  upon  and  consistent  with  the  Company's
participation  for a President and Chief  Executive  Officer.  Such level of Mr.
Nynens'  participation will be at least equal to options exercisable for 200,000
shares of Common Stock (or equivalent awards).

If a LTIP is approved  and there is a price  increase of the Common Stock of the
Company  prior to the grant of such options  under the LTIP,  Mr. Nynens will be
entitled to a  performance  bonus equal to the  increase (if any) in the closing
share  price  from  January  12,  2006 to the date of the  grant of the  options
multiplied  by  200,000.  If there  shall be a change of control in the  Company
prior to the grant of such options  under the LTIP,  Mr. Nynens will be entitled
to a bonus equal to the  increase in the  closing  share price from  January 12,
2006 to the date of the change of control multiplied by 200,000.

In the event that Mr. Nynens  employment  is terminated  without cause or by the
rendering of a  non-renewal  notification,  he is entitled to receive  severance
payments equal to twelve months salary and immediate  vesting of all outstanding
stock awards. Additionally, in the event that a change of control of the Company
occurs (as described in the employment agreement),  Mr. Nynens outstanding stock
awards become immediately vested and he is entitled to the pro-rata  performance
bonus based upon stock price at the date of such change in control.

On January 9, 2006,  William  Willett  resigned as President and Chief Executive
Officer.  In  connection  with  the  resignation,  the  Company  entered  into a
Consulting Agreement with Mr. Willett.  Under terms of the Consulting Agreement,
Mr.  Willett will remain  Chairman of the Board until the 2006 Annual Meeting of
Shareholders.  Mr.  Willett's  termination  of  employment  will be treated as a
voluntary termination under the Employment Agreement between Mr. Willett and the
Company dated July 15, 2002 (the "Willett  Employment  Agreement").  The Willett
Employment  Agreement is amended such that only the  non-competition  provisions
will  survive  and be  extended  for a  period  of  time  equal  to  that of the
Consulting  Agreement.  Mr.  Willett  will  provide  consulting  services to the
Company for a one-year period beginning in July 2006. The total  compensation to
Mr. Willett for these consulting services will be $250,000, and Mr. Willett will
be obligated to perform up to 200 hours to assist the Chief Executive Officer of
the Company.

The Company has entered into a severance agreement with Mr.  Legrottaglie,  Vice
President of Information  Systems,  under which Mr.  Legrottaglie is entitled to
severance  payments for six months at the then applicable  annual base salary if
the Company terminates his employment for any reason other than for cause.

                                       20




CERTAIN TRANSACTIONS

The Company has adopted a policy  whereby all  transactions  between the Company
and its principal  officers,  Directors and affiliates  must be on terms no less
favorable to the Company than could be obtained from unrelated third parties and
require pre-approval by a majority of the disinterested members of the Company's
Board of Directors. There were no such transactions in 2005.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Edwin H. Morgens,  F. Duffield  Meyercord and Allan Weingarten served as members
of the  Compensation  Committee  during the last completed  fiscal year. None of
Messrs.  Morgens,  Meyercord and Weingarten  (i) was,  during the last completed
fiscal year,  an officer or employee of the Company or any of its  subsidiaries,
(ii) was formerly an officer of the Company or any of its subsidiaries, or (iii)
had any relationship  requiring disclosure by the Company under any paragraph of
Item 404 of Regulation S-K. Furthermore, no member of the Compensation Committee
had a relationship  that requires  disclosure under Item 402(j)(3) of Regulation
S-K.

                                       21


REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

The report of the  Compensation  Committee  shall not be deemed  incorporated by
reference  by any  general  statement  incorporating  by  reference  this  proxy
statement into any filing under the  Securities Act of 1933, as amended,  or the
Exchange Act,  except to the extent that the Company  specifically  incorporates
this  information  by  reference,  and shall not otherwise be deemed filed under
such Acts.

In evaluating the reasonableness of compensation paid to the Company's executive
officers,  the Compensation  Committee takes into account,  among other factors,
how  compensation   compares  to  compensation  paid  by  competing   companies,
individual   contributions  and  the  Company's  performance.   Base  salary  is
determined based upon individual  performance,  competitive  compensation trends
and a review of salaries for like jobs at similar companies.

The Company also maintains the Performance  Bonus Plan for its senior executives
which provides for a bonus of up to 120% of the  executive's  base salary in the
event   certain   performance   targets,   based  upon  revenue  and   operating
profitability,  are achieved.  The  Performance  Bonus Plan also provides for an
increase in the available  bonus pool for  performance  in excess of a specified
net  income  after  tax  performance  target.  For a further  discussion  of the
Performance Bonus Plan see the discussion under "Employee Benefit Plans."

It is the Company's policy that the  compensation of executive  officers also be
based,  in part,  on the grant of stock  options as an  incentive to enhance the
Company's  performance.  Stock  options are granted  based upon a review of such
executive's   responsibilities  and  relative  position  in  the  Company,  such
executive's  overall job performance and such executive's  existing stock option
position.  On April 21, 2005,  the Company  granted  60,640 options at an option
price of $12.85 per share to officers  and  key-employees  of the  Company.  The
options  granted  vested  immediately  on April 21,  2005.  The Company  granted
options to purchase  14,320  shares to William H. Willett,  the  Company's  then
President  and Chief  Executive  Officer;  options to purchase  14,320 shares to
Simon Nynens,  the Company's then  Executive Vice President and Chief  Financial
Officer;  options to purchase 5,000 shares to Jeffrey  Largiader,  the Company's
Vice  President  Sales &  Marketing;  options to purchase  5,000  shares to Vito
Legrottaglie,  the  Company's  Vice  President  and Chief  Information  Officer;
options  to  purchase  5,000  shares to Dan  Jamieson,  General  Manager  of the
Company's  Lifeboat  division;  and  options to purchase  5,000  shares to Steve
McNamara,  the Vice  President  and  General  Manager of  Programmer's  Paradise
Canada.  Each non-employee  Director of the Company received options to purchase
3,000  shares of the  Company's  Common  Stock at an option  price of $12.85 per
share.

The compensation of the Company's Chief Executive Officer in 2005 consisted of a
base salary,  an automobile  allowance,  a performance  bonus as well as options
exercisable for 14,320 shares of Common Stock.  The total  compensation  package
was established  considering base salaries of peer Chief Executive Officers with
similar executive responsibilities.


                  The Compensation Committee
                  --------------------------

                  F. Duffield Meyercord, Chairman
                  Edwin H. Morgens
                  Allan Weingarten

                                       22



STOCK PRICE PERFORMANCE GRAPH

Set forth below is a line graph  comparing the yearly  percentage  change in the
cumulative  total  shareholder  return on the  Company's  Common  Stock with the
cumulative total return of the S&P Midcap 400 Index and the S&P 500 Computer and
Electronics Retail Index for the period commencing  December 31, 2000 and ending
December  31,  2005,  assuming  $100 was  invested on December  31, 2000 and the
reinvestment of dividends.


[GRAPHIC OMITTED]





                                                               INDEXED RETURNS
                                                     Base      Years Ending
                                                     Period
Company / Index                                      Dec00     Dec01      Dec02      Dec03     Dec04      Dec05
---------------------------------------------------- --------- ---------- ---------- --------- ---------- ---------
                                                                                          

PROGRAMMERS PARADISE INC                             100          105.37      76.88    298.54     668.33    564.25
S&P MIDCAP 400 INDEX                                 100           99.40      84.97    115.24     134.23    151.08
S&P 500 COMPUTER & ELECTRONICS
RETAIL                                               100          160.88      82.80    160.77     187.68    197.70



                                       23



REPORT OF THE AUDIT COMMITTEE

The Audit Committee oversees the Company's financial reporting process on behalf
of the Board of Directors.  The Audit  Committee  consists of three  independent
directors.  Its duties and  responsibilities  are set forth in a written charter
(the "Audit  Committee  Charter").  The Audit Committee  Charter was attached as
Annex  A to the  Company's  proxy  statement  for its  2005  Annual  Meeting  of
Stockholders,  which was filed with the SEC on April 29, 2005.  In the course of
fulfilling its  responsibilities  during fiscal year 2005,  the Audit  Committee
has: o reviewed and discussed with management the audited  financial  statements
for the year ended December 31, 2005;

     o   discussed with representatives of Amper,  Politziner & Mattia P.C. (the
         "Independent  Registered  Public Accounting Firm") the matters required
         to  be  discussed  by   Statement   on  Auditing   Standards   No.  61,
         Communication with Audit Committees, as amended;

     o   received the written  disclosures  and the letter from the  Independent
         Registered  Public  Accounting Firm required by Independence  Standards
         Board Standard No. 1,  Independence  Discussions with Audit Committees,
         as amended;

     o   discussed with the Independent  Registered  Public  Accounting Firm its
         independence from the Company and management; and

     o   considered  whether the provision by the Independent  Registered Public
         Accounting Firm of non-audit  services is compatible  with  maintaining
         the Independent Registered Public Accounting Firm's independence.

Based  on the  foregoing,  the  Audit  Committee  recommended  to the  Board  of
Directors that the audited financial statements referred to above be included in
the Company's Annual Report on Form 10-K for the year ended December 31, 2005.

The Audit Committee  Charter provides that one duty of the Audit Committee is to
provide advice to the Board of Directors in selecting,  evaluating and replacing
the Company's independent  registered public accounting firm. In performing that
duty, the Audit Committee recommended that the Board of Directors appoint Amper,
Politziner & Mattia P.C. The Board of Directors agreed with this  recommendation
and, accordingly, appointed Amper, Politziner & Mattia as Programmer's Paradise,
Inc.'s independent registered public accounting firm for 2006.

                                              Respectfully submitted,
                                              Allan Weingarten, Chairman
                                              F. Duffield Meyercord
                                              Edwin H. Morgens

                                       24



                                   PROPOSAL 4

          APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee  annually considers and recommends to the Board of Directors
the selection of the Company's  independent  registered  public accounting firm.
Our independent registered public accounting firm during the year ended December
31, 2005 was Amper, Politziner & Mattia P.C. Amper, Politziner & Mattia P.C. who
has audited our financial  statements  since 2002. As  recommended  by the Audit
Committee,  the Board of Directors has appointed Amper, Politziner & Mattia P.C.
to serve as the Company's  independent  registered  public  accounting  firm for
2006.  One or more  representatives  of  Amper,  Politziner  & Mattia  P.C.  are
expected to be present at the meeting.  They will have the opportunity to make a
statement and will be available to respond to appropriate questions.

Fees and Independence

Audit Fees. We paid Amper,  Politziner & Mattia P.C. an aggregate of $89,240 and
$77,641,  respectively,  for professional services rendered for the audit of our
financial  statements  for the years  ended  December  31, 2005 and 2004 and its
reviews of our unaudited financial  statements included in our quarterly reports
on Form 10-Q for the quarterly  periods in the years ended December 31, 2005 and
2004, respectively.

Audit-Related  Fees.  During the years ended December 31, 2005 and 2004,  Amper,
Politziner   &  Mattia  P.C.  did  not  provide  or  bill  for  other  audit  or
audit-related services not included above.

Tax Fees. The aggregate fees billed for professional services rendered by Amper,
Politziner & Mattia P.C.  during  fiscal 2005 and 2004 for tax  compliance,  tax
advice and tax planning were $18,375 and $28,420 respectively.

All Other  Fees.  During the years  ended  December  31,  2005 and 2004,  Amper,
Politziner & Mattia P.C. did not provide or bill for other services not included
above.

The Audit  Committee  has  determined  that the  provision of services by Amper,
Politziner & Mattia P.C.  described in the  preceding  paragraphs  is compatible
with maintaining Amper, Politziner & Mattia P.C.'s independence. All permissible
audit and non-audit services provided by Amper, Politziner & Mattia P.C. in 2004
and 2005 were pre-approved by the Audit Committee.

GENERAL

The  Management  of the Company  does not know of any  matters  other than those
stated in this  proxy  statement  which are to be  presented  for  action at the
Meeting.  If any other matters should properly come before the Meeting,  proxies
will be voted on these  other  matters in  accordance  with the  judgment of the
persons voting the proxies.  Discretionary  authority to vote on such matters is
conferred  by  such  proxies  upon  the  persons  designated  therein  as  proxy
appointees.  The Company will bear the cost of preparing,  printing,  assembling
and mailing all proxy material which may be sent to  stockholders  in connection
with this  solicitation.  Arrangements  will also be made with brokerage houses,
other custodians,  nominees and fiduciaries,  to forward soliciting  material to
the beneficial  owners of the Company's  Common Stock held by such persons.  The
Company  will  reimburse  such  persons for  reasonable  out-of-pocket  expenses
incurred  by them.  In  addition  to the  solicitation  of proxies by use of the
mails, officers and regular employees of the Company may solicit proxies without
additional compensation,  by telephone,  telecopy or telegraph. The Company does
not  expect  to  pay  its  officers  or  employees  any   compensation  for  the
solicitation of proxies.

                                       25



STOCKHOLDER  PROPOSALS FOR INCLUSION IN THE COMPANY'S  2007 ANNUAL MEETING PROXY
STATEMENT AND PROXY CARD

Any  Stockholder  proposal to be considered by us for inclusion in the Company's
2007 proxy  statement and form of proxy card for next year's  Annual  Meeting of
Stockholders,  expected  to be held  in  June  2007,  must  be  received  by the
Company's  Corporate  Secretary at the  Company's  principal  executive  offices
located at 1157 Shrewsbury Avenue,  Shrewsbury, NJ 07702, no later than December
30,  2006 (120 days  prior to the first  anniversary  of the date of this  proxy
statement).  The Securities and Exchange Commission rules set forth standards as
to what stockholders proposals are required to be included in a proxy statement.

OTHER  STOCKHOLDER  PROPOSALS  FOR  PRESENTATION  AT THE  COMPANY'S  2007 ANNUAL
MEETING

For any  proposal  that is not  submitted  for  inclusion  in next year's  proxy
statement (as described above) but is instead sought to be presented directly at
the 2007  annual  meeting,  Securities  and  Exchange  Commission  rules  permit
management to vote proxies in its discretion if the Company: (a) receives notice
of the proposal more than 45 days prior to the  anniversary  of the mailing date
of this proxy  statement  and the Company  advises  stockholders  in next year's
proxy  statement  about the nature of the matter and how  management  intends to
vote on such matter,  or (b) does not receive notice of the proposal at least 45
days prior to the  anniversary  of the  mailing  date of this  proxy  statement.
Notices of intention to present  proposals at the 2007 annual  meeting should be
addressed  to the  Company's  Corporate  Secretary  at the  Company's  principal
executive offices located at 1157 Shrewsbury Avenue, Shrewsbury, NJ 07702.

                                          By Order of the Board of Directors,

                                          William H. Willett, Chairman

April 28, 2006

                                       26



                                    Exhibit A

                           PROGRAMMER'S PARADISE, INC.
                       2006 STOCK-BASED COMPENSATION PLAN

1.       Purpose

The Plan has been established by Programmer's Paradise,  Inc. (i) to attract and
retain persons eligible to participate in the Plan; (ii) motivate  Participants,
by means of appropriate incentives,  to achieve long-range goals; and (iii) link
participants' interests with those of Programmer's Paradise, Inc.'s shareholders
through  compensation that is based on the common stock, and thereby promote the
continued growth and financial success of the Company.

2.       Definitions

For purposes of the Plan, the following  terms shall have the meanings set forth
below:

     (a) "Award" means an Option, SAR, Stock Bonus,  Restricted Stock,  Deferred
         Stock,  Stock Unit or other  equity-based award granted under the terms
         of the Plan.

     (b) "Award  Agreement" means an agreement,  in such form and including such
         terms  as  the  Committee  in  its  sole  discretion  shall  determine,
         evidencing an Award.

     (c) "Board" means the Board of Directors of Programmer's Paradise, Inc.

     (d) "Cause" means: (i) the  Participant's  conviction of any crime (whether
         or not involving the Company) constituting a felony in the jurisdiction
         involved;  (ii) conduct of the Participant related to the Participant's
         employment  or service for which  either  criminal  or civil  penalties
         against the  Participant  or the Company may be sought;  (iii) material
         violation of the Company's policies, including but not limited to those
         relating to sexual harassment, the disclosure or misuse of confidential
         information,  or those set forth in Company  manuals or  statements  of
         policy;  (iv) serious  neglect or misconduct in the  performance of the
         Participant's  duties for the Company or willful or repeated failure or
         refusal to perform  such  duties.  If,  subsequent  to a  Participant's
         termination of employment or service (whether voluntary or involuntary)
         without Cause,  it is discovered that the  Participant's  employment or
         service  could  have been  terminated  for  Cause,  such  Participant's
         employment  or  service  shall be deemed to have  been  terminated  for
         Cause. A  Participant's  termination of employment or service for Cause
         shall be effective as of the date of the occurrence of the event giving
         rise to Cause, regardless of when the determination of Cause is made.

     (e) "Change in Control" means a change in control of a nature that would be
         required to be reported in response to Item 5.01 of a Current Report on
         Form 8-K as in  effect  on the date the Plan  becomes  effective  under
         section  13 or  15(d)  of the  Exchange  Act,  provided  that,  without
         limitation, a Change in Control shall be deemed to have occurred if:

         (i)     Any "Person" (as such term is used in sections  13(d) and 14(d)
                 of the Exchange Act), other than:

                  (1)    Programmer's Paradise, Inc.,

                  (2)    any  Person  who on the date  hereof is a  director  or
                         officer of Programmer's Paradise, Inc., or

                  (3)    a trustee  or  fiduciary  holding  securities  under an
                         employee benefit plan of Programmer's  Paradise,  Inc.,
                         is or becomes  the  "beneficial  owner," (as defined in
                         Rule  13d-3  under  the  Exchange  Act),   directly  or
                         indirectly,  of  securities of  Programmer's  Paradise,
                         Inc.  representing more than 50% of the combined voting
                         power of Programmer's Paradise, Inc.'s then outstanding
                         securities; or

          (ii)    During any period of two consecutive  years during the term of
                  this Plan,  individuals  who at the  beginning  of such period
                  constitute  the Board of Directors of  Programmer's  Paradise,
                  Inc.  cease for any reason to  constitute  at least a majority
                  thereof,  unless the  election of each  director who was not a
                  director at the  beginning of such period has been approved in
                  advance by directors  representing at least  two-thirds of the
                  directors  then in office who were  directors at the beginning
                  of the period; or

          (iii)   The shareholders of Programmer's Paradise, Inc. approve: (A) a
                  plan of complete liquidation of Programmer's  Paradise,  Inc.;
                  or (B) an  agreement  for the  sale or  disposition  of all or
                  substantially all of

                                       27


                   Programmer's  Paradise,  Inc.'s  assets;  or  (C)  a  merger,
                   consolidation,  or reorganization  of Programmer's  Paradise,
                   Inc.  with or involving any other  corporation,  other than a
                   merger,  consolidation,  or reorganization  (collectively,  a
                   "Transaction"), that would result in the voting securities of
                   Programmer's  Paradise,  Inc.  outstanding  immediately prior
                   thereto   continuing   to  represent   (either  by  remaining
                   outstanding or by being  converted into voting  securities of
                   the surviving  entity),  at least 50% of the combined  voting
                   power of the voting securities of Programmer's Paradise, Inc.
                   (or the surviving  entity,  or an entity which as a result of
                   the Transaction owns  Programmer's  Paradise,  Inc. or all or
                   substantially  all of  Programmer's  Paradise,  Inc.'s assets
                   either   directly  or  through  one  or  more   subsidiaries)
                   outstanding immediately after the Transaction.

     (f) "Code" means the Internal Revenue Code of 1986, as amended. A reference
         to any provision of the Code shall  include  reference to any successor
         provision of the Code.

     (g) "Committee"  means the Compensation  Committee of the Board;  provided,
         however,  that the  Committee  shall  at all  times  have at least  two
         members, all of whom are "non-employee directors" within the meaning of
         Rule 16b-3  under the  Exchange  Act,  "outside  directors"  within the
         meaning  of  section  162(m) of the Code,  and  independent  within the
         meaning of any applicable stock exchange rule.

     (h) "Common Stock" means the common stock of Programmer's  Paradise,  Inc.,
         par value $0.25 per share.

     (i) "Company"  means  Programmer's  Paradise,   Inc.  and  any  "subsidiary
         corporation"  (as that term is defined  in Code  section  424(f))  with
         respect to Programmer's Paradise, Inc.

     (j) "Deferred  Stock" means an Award made under Section 7 to receive Common
         Stock at the end of a specified Deferral Period.

     (k) "Deferral  Period"  means the  period  during  which the  receipt  of a
         Deferred Stock Award under Section 7 will be deferred.

     (l) "Disability"  means a disability  described in section 422(c)(6) of the
         Code.

     (m) "Employee"  means  an  officer  or  salaried  employee  of the  Company
         providing key services to the Company, including a director who is such
         an employee. Employee shall also include individuals of the Company who
         are not  salaried  employees,  but who  receive  Awards  under the Plan
         conditioned on their becoming an Employee.

     (n) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     (o) "Fair  Market  Value"  of  Common  Stock  on any  given  date  shall be
         determined according to the following rules:

          (i)     If the  Common  Stock is at the time  listed  or  admitted  to
                  trading on any stock  exchange,  then the "Fair Market  Value"
                  shall be the mean between the highest and lowest prices of the
                  Common Stock on the date in question on the principal national
                  securities  exchange on which it is then listed or admitted to
                  trading.  If no reported  sale of Common  Stock takes place on
                  the  date in  question  on the  principal  exchange,  then the
                  reported  closing asked price of the Common Stock on such date
                  on the  principal  exchange  shall be  determinative  of "Fair
                  Market Value."

          (ii)    If the Common  Stock is not at the time  listed or admitted to
                  trading on a stock exchange,  the "Fair Market Value" shall be
                  the mean between the highest  reported  asked price and lowest
                  reported bid price of the Common Stock on the date in question
                  in the over-the-counter market, as such prices are reported in
                  a publication of general circulation selected by the Committee
                  and  regularly  reporting  the market price of Common Stock in
                  such market.

          (ii)    If the Common  Stock is not listed or  admitted  to trading on
                  any stock exchange or traded in the  over-the-counter  market,
                  the "Fair Market  Value" shall be as  determined in good faith
                  by the Committee.

     (p) "Incentive Stock Option" means an Option that meets the requirements of
         an incentive stock option as defined in section 422 of the Code.

     (q) "Option"  means the right granted  under  Section 6 to purchase  Common
         Stock for a specified  period of time at a stated price.  An Option may
         be an Incentive Stock Option or a Non-Qualified Stock Option.

     (r) "Non-Qualified Stock Option" means an Option that is not intended to be
         an Incentive Stock Option.

     (s) "Participant" means an Employee, director or consultant who is eligible
         to participate in the Plan in accordance  with Section 3 and to whom an
         Award is granted under the Plan.

     (t) "Performance Goal" means a goal that must be met by the end of a period
         specified by the Committee (but that is  substantially  uncertain to be
         met  before  the grant of the  Award)  based  on:  (i) the price of the
         Common  Stock;  (ii) the market  share of the Company (or any  business
         unit  thereof);  (iii)  sales  by the  Company  (or any  business  unit
         thereof);  (iv)  earnings  per share of  Common  Stock;  (v)  return on
         shareholder  equity of Programmer's  Paradise,  Inc.; (vi) costs of the
         Company (or any business unit thereof); (vii) cash flow of Programmer's
         Paradise,  Inc. (or any business unit thereof);  (viii) return on total
         assets of the Company (or any business  unit  thereof);  (ix) return on
         invested  capital of the Company (or any business  unit  thereof);  (x)
         return on net assets of the Company  (or any

                                       28


         business unit thereof);  (xi)  operating  income of the Company (or any
         business  unit  thereof);  or (xii) net income of the  Company  (or any
         business unit thereof).

     (u) "Restricted  Stock" means a share of Common Stock that is awarded under
         Section 8 and that is  subject  to the  restrictions  set forth in such
         Section.

     (v) "Restriction  Period" means the period during which Restricted Stock is
         subject to  forfeiture,  which,  if the  Committee  so provides may not
         expire until Retirement.

     (w) "Retirement"  means: (i) with respect to a Participant who is an active
         participant  in any qualified  pension plan  maintained by the Company,
         retirement with the Company under the provisions of such plan; and (ii)
         with respect to any other  Participant,  termination  of  employment or
         service  (with  respect to  directors,  but not  consultants)  with the
         Company under the procedures  established  by the Committee.  (x) "SAR"
         means a stock  appreciation  right awarded under Section 10 and subject
         to the terms and conditions contained therein.

     (y) "Programmer's  Paradise,  Inc." means  PROGRAMMER'S  PARADISE,  INC., a
         Delaware corporation, or any successor thereto.

     (z) "Stock Unit" means the right  granted  under Section 11 to receive cash
         equal to the Fair Market Value of a share of Common Stock multiplied by
         the  number  of  Stock  Units  awarded.  For  purposes  of  this  Plan,
         fractional  Stock Units,  measured to the nearest four decimal  places,
         may be credited.

     (aa) "Stock  Bonus"  means an award of a bonus  payable in shares of Common
         Stock under Section 9.

     (bb) "Ten Percent  Shareholder"  means a person who on any given date owns,
         either  directly or  indirectly  (taking into  account the  attribution
         rules contained in Code section 424(d)),  stock possessing more than 10
         percent of the total  combined  voting power of all classes of stock of
         the Company or any subsidiary corporation under Code section 424(f).

3.       Eligibility

Any  Employee,  non-Employee  director of the Company or key  consultant  to the
Company who is  designated by the  Committee as eligible to  participate  in the
Plan shall be  eligible  to receive an Award  under the Plan,  provided  that an
Incentive Stock Option may only be granted to an Employee of the Company.

4.       Administration and Implementation of the Plan

     (a) Subject  to  Section  4(b),  the  Plan  shall  be  administered  by the
         Committee,  which shall have full power to interpret and administer the
         Plan and full  authority to act in selecting the  Participants  to whom
         Awards will be granted,  in determining  the times at which Awards will
         be granted,  in determining the type and amount of Awards to be granted
         to each such  Participant,  the terms and  conditions of Awards granted
         under the Plan  (including  whether  Awards may be exchanged  for cash,
         made on a tandem basis, or deferrable or transferable by a Participant)
         and  the  terms  of   agreements   which  will  be  entered  into  with
         Participants. The Committee shall have the power to establish different
         terms and  conditions  with respect to (i) the various  types of Awards
         granted under the Plan,  (ii) the granting of the same type of Award to
         different Participants (regardless of whether the Awards are granted at
         the same time or at different  times),  and (iii) the  establishment of
         different Performance Goals for different Participants.

     (b) The  Committee  shall  not have the  power to make or grant  Awards  to
         non-Employee  directors of the Company.  The Company's  Nominating  and
         Corporate  Governance  Committee  shall  have  the  authority  to  make
         recommendations  to the full Board regarding Awards that should be made
         to  non-Employee  directors of the  Company.  The full Board shall have
         sole and absolute  authority to make Awards to  non-Employee  directors
         hereunder,  upon the  Nominating and Corporate  Governance  Committee's
         recommendation.  Awards made to non-Employee directors shall be subject
         to the other  provisions of the Plan and shall be  administered  by the
         Committee, unless the full Board provides otherwise.

     (c) The Committee  shall have the power to adopt  regulations  for carrying
         out the Plan  (including  regulations  regarding the form and timing of
         elections  and  notices  under the Plan)  and to make  changes  in such
         regulations  as it  shall,  from  time to  time,  deem  advisable.  Any
         interpretation by the Committee of the terms and provisions of the Plan
         (including  determinations of existence Cause and Disability hereunder)
         and the administration  thereof,  and all action taken by the Committee
         shall be final,  binding and  conclusive  for all purposes and upon all
         Participants.

                                       29



     (d) The Committee may condition the grant of any Award or the lapses of any
         Deferral or Restriction  Period (or any  combination  thereof) upon the
         Participant's  achievement of a Performance Goal that is established by
         the Committee  before the grant of the Award.  The Committee shall have
         the  discretion to determine the specific  targets with respect to each
         of these categories of Performance  Goals.  Before granting an Award or
         permitting  the  lapse  of any  Deferral  or  Restriction  Period,  the
         Committee shall certify that an individual has satisfied the applicable
         Performance Goal.

     (e) Except to the extent  prohibited  by applicable  law or the  applicable
         rules  of a stock  exchange,  the  Committee  may  allocate  all or any
         portion  of its  responsibilities  and powers to any one or more of its
         members and may  delegate all or any part of its  responsibilities  and
         powers to any person or persons  selected by it. Any such allocation or
         delegation  may be  revoked  by the  Committee  at any  time.  (f)  The
         Committee  may employ  attorneys,  consultants,  accountants  and other
         service  providers.  The  Committee,  the Board,  the  Company  and the
         Company's  officers  shall be  entitled  to rely  upon the  advice  and
         opinions of any such  person.  No member of the  Committee or the Board
         shall  be   personally   liable  for  any  action,   determination   or
         interpretation  made with  respect  to the Plan and all  members of the
         Committee  and the  Board  shall be  fully  protected  by  Programmer's
         Paradise,  Inc.  in  respect  of  any  such  action,  determination  or
         interpretation in the manner provided in Programmer's Paradise,  Inc.'s
         bylaws.

5.       Shares Subject to the Plan

     (a) Subject to the following provisions of this Section, the maximum number
         of shares that may be delivered  to  Participants  (or, if  applicable,
         their heirs,  legatees or permitted  transferees)  under the Plan shall
         not exceed 800,000 shares of Common Stock.  Any shares issued under the
         Plan may  consist,  in whole or in part,  of  authorized  and  unissued
         shares or treasury shares.

     (b) Any shares of Common  Stock  issued  under the Plan that are  forfeited
         because of the failure to meet an Award  contingency or condition shall
         again be available  for delivery  pursuant to new Awards  granted under
         the Plan.  To the extent any shares of Common Stock covered by an Award
         are not  delivered  to a  Participant  (or,  if  applicable,  his heir,
         legatee or  permitted  transferee)  because the Award is  forfeited  or
         canceled,  or the shares are not delivered because the Award is settled
         in cash,  such shares  shall not be deemed to have been  delivered  for
         purposes of  determining  the maximum  number of shares of Common Stock
         available for delivery under the Plan.

     (c) If the Exercise Price of any Option granted under the Plan is satisfied
         by tendering shares of Common Stock to Programmer's Paradise,  Inc. (by
         either actual  delivery or by  attestation),  only the number of shares
         issued  net of the  shares of  Common  Stock  tendered  shall be deemed
         delivered for purposes of  determining  the maximum number of shares of
         Common Stock available for delivery under the Plan.

     (d) Shares  of  Common  Stock  delivered  under  the  Plan  in  settlement,
         assumption or  substitution  of outstanding  awards (or  obligations to
         grant future awards) under the plans or  arrangements of another entity
         shall not reduce the maximum number of shares of Common Stock available
         for  delivery  under  the Plan,  to the  extent  that such  settlement,
         assumption or substitution is a result of the Company acquiring another
         entity (or an interest in another entity).

     (e) Subject  to  the  other  provisions  of  this  Section,  the  following
         additional maximums are imposed under the Plan.

          (i)     The  maximum  number of shares  of  Common  Stock  that may be
                  covered by Awards granted to any one individual under Sections
                  2 and 10  (relating  to  Options  and SARs)  shall be  300,000
                  shares during any calendar year.

          (ii)    The maximum payment that can be made for Awards granted to any
                  one  individual  under  Sections  7,  8,  and 9  (relating  to
                  Deferred Stock, Restricted Stock, Stock Bonus and Stock Units)
                  shall be  $1,500,000  for any single or  combined  performance
                  goals established for any performance period, as determined by
                  reference to the Fair Market Value on the date of grant of the
                  Award.

6.       Options

The Committee may grant Options under the Plan.  Options shall be evidenced by a
written Award Agreement. Such Award Agreements shall conform to the requirements
of the Plan, and may contain such other  provisions as the Committee  shall deem
advisable.  The  grant  of  Options  shall  comply  with and be  subject  to the
following terms and

                                       30



conditions:

     (a) Identification of Options.  Each Option granted under the Plan shall be
         clearly  identified  in the  applicable  Award  Agreement  as either an
         Incentive  Stock  Option or as a  Non-Qualified  Stock  Option.  In the
         absence  of such  identification,  an  Option  shall be  deemed to be a
         Non-Qualified Stock Option.

     (b) Number of Options.  Subject to Section  5(e),  the Award  Agreement for
         each Option  award shall  specify the number of shares of Common  Stock
         that a  Participant  may  receive  with  respect  to the  Participant's
         option.

     (c) Exercise  Price.  The  price  per  share at which  Common  Stock may be
         purchased  upon  exercise  of an  Option  shall  be  determined  by the
         Committee,  but shall be not less than the Fair Market Value of a share
         of  Common  Stock on the date of  grant.  In the case of any  Incentive
         Stock Option granted to a Ten Percent Shareholder, the option price per
         share shall not be less than 110% of the Fair  Market  Value of a share
         of Common Stock on the date of grant.

     (d) Term and Exercise of Options.

          (i)     An  Award  Agreement  shall  specify  when  an  Option  may be
                  exercisable and the terms and conditions  applicable  thereto.
                  The term of an Option  shall in no event be  greater  than ten
                  years.

          (ii)    An Option may be  exercised  only for a whole number of shares
                  of Common Stock.  The Committee  shall  establish the time and
                  the  manner in which an Option  may be  exercised.  The option
                  price of the shares of Common Stock received upon the exercise
                  of an Option  shall be paid  within  three days of the date of
                  exercise:  (i) in  cash  or,  (ii)  in  cash  received  from a
                  broker-dealer  whom the Participant has authorized to sell all
                  or a portion of the Common  Stock  covered by the  Option,  or
                  (iii) with the consent of the  Committee,  in whole or in part
                  in shares of Common Stock held by the Participant for at least
                  six months and valued at their Fair  Market  Value on the date
                  of exercise.  With the consent of the Committee,  payment upon
                  the exercise of a Non-Qualified Option may be made in whole or
                  in  part  by  Restricted  Stock  which  has  been  held by the
                  Participant  for at least six months (based on the Fair Market
                  Value  of the  Restricted  Stock on the  date  the  Option  is
                  exercised,  as determined by the Committee).  In such case the
                  Common Stock to which the Option  relates  shall be subject to
                  the same  forfeiture  restrictions  originally  imposed on the
                  Restricted Stock exchanged therefor.

     (e) Limitations on Grants of Incentive Stock Options.

          (i)     Each provision of the Plan and each Award  Agreement  relating
                  to an  Incentive  Stock Option shall be construed so that each
                  Incentive  Stock Option shall be an incentive  stock option as
                  defined in section 422 of the Code,  and any provisions of the
                  Option Agreement  thereof that cannot be so construed shall be
                  disregarded.  Only an  Employee  may be granted  an  Incentive
                  Stock  Option.  In no event may a  Participant  be  granted an
                  Incentive  Stock  Option which does not comply with such grant
                  and vesting limitations as may be prescribed by section 422(b)
                  of the Code.  Without  limiting the  foregoing,  the aggregate
                  Fair  Market  Value  (determined  as of the time the Option is
                  granted)  of  the  Common  Stock  with  respect  to  which  an
                  Incentive  Stock  Option  may first  become  exercisable  by a
                  Participant  in any one calendar year under the Plan shall not
                  exceed $100,000.

          (ii)    No Incentive Stock Option shall be transferable otherwise than
                  by will or the laws of descent and  distribution  and,  during
                  the lifetime of the Participant,  shall be exercisable only by
                  the Participant.  Upon the death of a Participant,  the person
                  to whom  the  rights  have  passed  by will or by the  laws of
                  descent  and  distribution  may  exercise an  Incentive  Stock
                  Option only in accordance with this Section.

7.       Deferred Stock

The Committee may award Deferred Stock under the Plan,  which shall be evidenced
by an Award  Agreement  in such form as the  Committee  shall  from time to time
approve. Deferred Stock Awards shall comply with and be subject to the following
terms and conditions:

     (a) Crediting of Deferred Stock. Upon determination of the number of shares
         of Deferred Stock to be awarded to a Participant,  the Committee  shall
         direct that the same be credited  to the  Participant's  account on the
         books of the Company but that  issuance  and delivery of the same shall
         be deferred until the date or dates provided in Section 7(e).

     (b) Deferral Period and Performance Goals.

          (i)     The  Committee may condition the grant of an Award of Deferred
                  Stock  or the  expiration  of the  Deferral  Period  upon  the
                  Participant's  achievement of one or more Performance  Goal(s)
                  specified in the Award

                                       31



                  Agreement.  If the Participant  fails to achieve the specified
                  Performance   Goal(s),  the  Committee  shall  not  grant  the
                  Deferred Stock Award to the  Participant,  or the  Participant
                  shall   forfeit  the  Award  and  no  Common  Stock  shall  be
                  transferred to him pursuant to the Deferred Stock Award.

          (ii)    The Award Agreement shall specify the duration of the Deferral
                  Period  taking  into  account  termination  of  employment  or
                  service on account of death, Disability,  Retirement or Cause.
                  The Deferral  Period may consist of one or more  installments.
                  At the end of the Deferral Period or any  installment  thereof
                  the shares of Deferred  Stock  applicable to such  installment
                  credited to the account of a  Participant  shall be issued and
                  delivered to the  Participant  (or, if  applicable,  his heir,
                  legatee or permitted  transferee) in accordance with the terms
                  of the Award  Agreement.  Notwithstanding  the Deferral Period
                  provided in an Award  Agreement,  the Committee may accelerate
                  the  delivery of all or any part of a Deferred  Stock Award or
                  waive  the  deferral  limitations  for  all or any  part  of a
                  Deferred Stock Award.

     (c) Voting Rights and Dividends.

          (i)     Prior to issuance and delivery,  the Participant shall have no
                  rights as a shareholder with respect to any shares of Deferred
                  Stock credited to the Participant's account.

          (ii)    Amounts  equal to any dividends  declared  during the Deferral
                  Period  with  respect  to the  number of shares  covered  by a
                  Deferred   Stock  Award  will  be  paid  to  the   Participant
                  currently,   or  deferred  and  deemed  to  be  reinvested  in
                  additional  Deferred  Stock,  or otherwise  reinvested on such
                  terms as are determined at the time of the Award and specified
                  in the Award Agreement.

8.       Restricted Stock

The  Committee  may award shares of  Restricted  Stock.  Each grant of shares of
Restricted  Stock  shall be  evidenced  by  Award  Agreements  in such  form and
containing  such  terms  and  conditions  and  subject  to  such  agreements  or
understandings  as the Committee shall from time to time approve.  Each grant of
shares of  Restricted  Stock shall  comply with and be subject to the  following
terms and conditions:

     (a) Terms  of  Restricted  Stock.  The  Award  Agreement  for  a  grant  of
         Restricted  Stock shall conform to the  requirements  of the Plan,  and
         shall  specify (i) the number of shares of Common Stock  subject to the
         Award, (ii) the Restriction  Period applicable to the Award,  (iii) the
         events that will give rise to a forfeiture  of the Award,  and (iv) the
         Performance  Goals,  if any,  that  must be  achieved  in order for the
         restriction  to be removed from the Award.  The  agreement  may contain
         such other  provisions not  inconsistent  with the terms of the Plan as
         the Committee shall deem advisable.

     (b) Issuance of Certificates. The Committee shall direct that a certificate
         or  certificates  representing  the number of shares of Common Stock be
         issued  to the  Participant  with  the  Participant  designated  as the
         registered owner. The certificate(s)  representing such shares shall be
         legended as to restrictions on the sale, transfer,  assignment,  pledge
         or other  encumbrances  during the Restriction  Period and deposited by
         the  Participant,  together with a stock power endorsed in blank,  with
         the Company.

     (c) Satisfaction of the Restriction  Period.  At the end of the Restriction
         Period,  the  Committee  shall  determine,  in light of the  terms  and
         conditions  set forth in the Award  Agreement,  the number of shares of
         Restricted  Stock  with  respect  to  which  the  restrictions  imposed
         hereunder have lapsed.  The Restricted  Stock with respect to which the
         restrictions  shall lapse shall be  converted  to  unrestricted  Common
         Stock by the removal of the  restrictive  legends  from the  Restricted
         Stock.  Thereafter,  Common  Stock equal to the number of shares of the
         Restricted Stock with respect to which the restrictions hereunder shall
         lapse shall be delivered to the Participant (or, where appropriate, the
         Participant's legal representative).

     (d) Voting Rights and Dividends.

          (i)     Unless  otherwise  determined  by the  Committee,  during  the
                  Restriction  Period  the  Participant  shall have the right to
                  vote all shares of Restricted Stock.

          (ii)    Dividends will be authorized by Programmer's Paradise, Inc. to
                  be paid to the  Participant  during the period the restriction
                  is  enforced,   subject  to  the  same   restrictions  as  the
                  underlying shares upon which the restriction is declared.

9.       Stock Bonus

The Committee may grant Stock Bonuses in such amounts as it shall determine from
time to time. A Stock Bonus shall be paid at such time  (including a future date
selected by the Committee at the time of grant) and subject to such conditions

                                       32




as the Committee  shall  determine at the time of the grant of such Stock Bonus,
including,  if  applicable,  Section  14.  By way of  example  and not by way of
limitation,  the Committee may require, as a condition to the payment of a Stock
Bonus, that the Participant or the Company achieve such performance  criteria as
the Committee may specify at the time of the grant. Prior to the date on which a
Stock  Bonus  awarded  hereunder  is  required  to be  paid,  such  Award  shall
constitute an unfunded,  unsecured  promise by the Company to distribute  Common
Stock in the future.

10.      Stock Appreciation Rights

The Committee  may grant SARs under the Plan,  which shall be evidenced by Award
Agreements in such form as the Committee  shall from time to time approve.  SARs
shall comply with and be subject to the following terms and conditions:

     (a) Benefits Upon Exercise.

          (i)     An SAR shall  entitle the recipient to receive a payment equal
                  to the excess of the Fair Market Value of the shares of Common
                  Stock covered by the SAR on the date of exercise over the base
                  price of the SAR.  Such  payment may be in cash,  in shares of
                  Common  Stock,  in  shares  of  Deferred  Stock,  in shares of
                  Restricted  Stock or any  combination,  as the Committee shall
                  determine.  An SAR may be  granted  in  tandem  with  all or a
                  portion of a related Option under the Plan ("Tandem  SAR"), or
                  may be granted separately  ("Freestanding  SAR"). A Tandem SAR
                  may be  granted  either at the time of the grant of the Option
                  or at any time  thereafter  during  the term of the Option and
                  shall be  exercisable  only to the  extent  that  the  related
                  Option is exercisable.

          (ii)    Upon  exercise of a Tandem SAR as to some or all of the shares
                  of Common Stock covered by the grant, the related Option shall
                  be  canceled  automatically  to the  extent  of the  number of
                  shares of Common  Stock  covered  by such  exercise,  and such
                  shares  shall no longer be available  for  purchase  under the
                  Option.  Conversely,  if the related Option is exercised as to
                  some or all of the  shares  of  Common  Stock  covered  by the
                  grant,  the  related  Tandem  SAR,  if any,  shall be canceled
                  automatically  to the extent of the number of shares of Common
                  Stock covered by the Option exercise.

     (b) Exercise  Price.  The base  price of a Tandem  SAR shall be the  option
         price under the related  Option.  The base price of a Freestanding  SAR
         shall be  determined  by the Committee at the time of the grant of such
         SAR but  shall be not less than  100% of the Fair  Market  Value of the
         Common Stock on the date of grant of the Freestanding SAR.

     (c) Other Restrictions.  SARs shall generally be subject to the same terms,
         conditions and limitations applicable to Options granted under Section
         6.

11.      Stock Units

     (a) Grant of Stock  Units.  Subject  to the other  terms of the  Plan,  the
         Committee  shall,  in its  discretion  as reflected by the terms of the
         applicable Award  Agreement:  (i) authorize the granting of Stock Units
         to  Participants  and (ii) determine or impose other  conditions to the
         grant of Stock Units under the Plan as it may deem appropriate.

     (b) Term.  The  Committee  may  provide  in an  Award  Agreement  that  any
         particular  Stock Unit shall expire at the end of a specified  term not
         to exceed 10 years.

     (c) Vesting.

          (i)     Stock Units shall vest and first become exercisable  according
                  to the terms and conditions set forth in the Award  Agreement,
                  as  determined  by the  Committee at the time of grant.  Stock
                  Units may be payable upon termination of employment or service
                  or  upon  other  future  event  (including   attainment  of  a
                  Performance Goal).

          (ii)    Unless otherwise  provided in the Award Agreement  (except due
                  to a  termination  for  Cause),  if a  Participant  terminates
                  employment  or service  with the  Company,  any and all of the
                  Participant's Stock Units which have not vested prior to or as
                  of such  termination  shall  thereupon,  and  with no  further
                  action, be forfeited and cease to be outstanding.

          (iii)   If a  Participant  terminates  employment  or service with the
                  Company  for  Cause,  any and all of the  Participant's  Stock
                  Units which have not vested prior to or as of such termination
                  shall thereupon,  and with no further action, be forfeited and
                  cease to be outstanding.

     (d) Settlement of Stock Units.

          (i)     Each vested and outstanding Stock Unit shall be settled by the
                  payment to the  Participant  of cash equal to the Fair  Market
                  Value of the Common  Stock  times the number of Stock Units to
                  be settled.  The Fair  Market  Value

                                       33

                  shall be determined by reference to the date of termination or
                  other future event as specified in the Award Agreement.

          (ii)    Unless otherwise  provided in an Award  Agreement,  each Stock
                  Unit  shall  be  settled  with  a  single-sum  payment  by the
                  Company.

          (iii)   Unless otherwise provided in an Award Agreement and subject to
                  Section 14, if applicable, the settlement date with respect to
                  a  Participant  is the first  day of the  month to follow  the
                  Participant's termination of employment or service.

     (e) Nature  of Stock  Units.  Stock  Units  are  solely  a  device  for the
         measurement  and   determination  of  the  amounts  to  be  paid  to  a
         Participant under the Plan. Each Participant's right in the Stock Units
         is limited to the right to receive  payment,  if any,  as may herein be
         provided.  The Stock Units do not constitute Common Stock and shall not
         be treated as (or as giving rise to) property or as a trust fund of any
         kind;  provided,  however,  that  the  Company  may  establish  a  mere
         bookkeeping  reserve to meet its  obligations  hereunder  or a trust or
         other funding  vehicle that would not cause the Plan to be deemed to be
         funded for tax  purposes  or for  purposes  of Title I of the  Employee
         Retirement  Income  Security Act of 1974, as amended.  The right of any
         Participant   of  Stock   Units  to  receive   payments  by  virtue  of
         participation  in the Plan  shall be no  greater  than the right of any
         unsecured  general  creditor of the Company.  Nothing  contained in the
         Plan shall be construed to give any Participant any rights with respect
         to Shares or any ownership  interest in the Company.  Without  limiting
         Section 8, no provision of the Plan shall be  interpreted to confer any
         voting,  dividend or derivative or other similar rights with respect to
         any Stock Units.

12.      Other Equity-Based Awards

The Committee may grant other types of  equity-based  Awards in such amounts and
subject  to such  terms  and  conditions,  as the  Committee  shall  in its sole
discretion  determine,  subject to the provisions of the Plan. Awards may entail
the  transfer of actual  shares of Common Stock to  Participants,  or payment in
cash or otherwise of amounts based on the value of shares of Common Stock.

13.      Effect of Termination of Employment or Service on Awards

     (a) Options and SARs.

          (i)     Unless otherwise provided in an applicable Award Agreement and
                  subject to Section 6(e),  in the event that the  employment or
                  service of a Participant  with the Company shall terminate for
                  any reason other than Retirement,  Cause,  Disability or death
                  (i) Options or SARs or SARs  granted to such  Participant,  to
                  the extent  that they were  exercisable  on the  Participant's
                  termination   date,   shall  remain   exercisable   until  the
                  expiration  of 90 days after such  termination  date, on which
                  date  they  shall  expire,  and (ii)  Options  or SARs or SARs
                  granted to such Participant,  to the extent that they were not
                  exercisable on his termination date, shall expire at the close
                  of business on such date; provided, however, that no Option or
                  SAR shall be exercisable after the expiration of its term.

          (ii)    Unless otherwise provided in an applicable Award Agreement and
                  subject to Section 6(e),  in the event that the  employment or
                  service of a Participant  with the Company shall  terminate on
                  account of the death of the  Participant,  all Options or SARs
                  or SARs granted to such  Participant,  to the extent that they
                  were exercisable on the Participant's  termination date, shall
                  remain exercisable until the expiration of one year after such
                  date, on which date they shall expire.

          (iii)   Unless otherwise provided in an applicable Award Agreement and
                  subject to Section 6(e),  in the event that the  employment or
                  service of a Participant  with the Company shall  terminate on
                  account of the  Disability or  Retirement of the  Participant,
                  all Options or SARs or SARs  granted to such  Participant,  to
                  the extent  that they were  exercisable  on the  Participant's
                  termination  date (or,  in the case of  Retirement  such later
                  date  determined by the Committee),  shall remain  exercisable
                  until the expiration of the term specified in their applicable
                  Award Agreement, on which date they shall expire.

          (iv)    In the event of the termination of a Participant's  employment
                  or service for Cause, all outstanding  Options or SARs or SARs
                  granted to such  Participant  shall expire at the commencement
                  of business on the  Participant's  termination date (or deemed
                  termination under Section 2(e)).

     (b) Restricted Stock and Deferred Stock.

          (i)     In the event that the  employment  or service of a Participant
                  with the Company shall  terminate for any reason (other than a
                  termination  that is for Cause) prior to the expiration of the

                                       34


                  Restriction  Period or Deferral  Period  with  respect to such
                  shares of Restricted Stock or Deferred Stock, unless otherwise
                  provided  by  the  Committee  in  its  sole  discretion,  such
                  termination shall cause the immediate forfeiture of all shares
                  of Restricted  Stock,  Deferred Stock or Stock Bonus that have
                  not vested as of the Participant's termination date.

          (ii)    In the event a  Participant's  employment  or service is or is
                  deemed  to have  been  terminated  for  Cause,  all  shares of
                  Restricted Stock still subject to a Restriction Period and all
                  shares of Deferred Stock still subject to a Deferral Period as
                  of his termination date immediately shall be forfeited.

14.      Deferral Election

Notwithstanding  any provision of the Plan to the contrary,  any Participant may
elect,  with the  concurrence of the Committee and consistent with any rules and
regulations  established  by the  Committee,  to defer to a  specified  date the
receipt of  unrestricted  Common  Stock (or a cash payment  hereunder)  that the
Participant  would otherwise be entitled to receive  pursuant to an Award.  Such
deferral may be, at the Committee's sole discretion,  be made in accordance with
the  terms of a  non-qualified  deferred  compensation  plan  maintained  by the
Company.  Notwithstanding  such an election,  the Committee may  distribute  the
unrestricted  Common  Stock (or cash  payment,  if  applicable)  deferred by any
Participant under this Section if the Committee  determines,  in its discretion,
that the continued  deferral of Common Stock  hereunder is no longer in the best
interest of the Company or that such deferred Award would be immediately taxable
to the Participant.

15.      Adjustments upon Changes in Capitalization

In the  event of a  reorganization,  recapitalization,  stock  split,  spin-off,
split-off,  split-up, stock dividend,  issuance of stock rights,  combination of
shares, merger,  consolidation or any other change in the corporate structure of
Programmer's  Paradise,   Inc.  affecting  Common  Stock,  any  distribution  to
shareholders  other  than  a  cash  dividend,  or any  change  in the  corporate
structure of the Company (or any sub-unit of the Company), the Committee, in its
discretion,  shall make appropriate  adjustment in the number and kind of shares
authorized by the Plan and any other  adjustments  to  outstanding  Awards as it
determines  appropriate.  No  fractional  shares of Common Stock shall be issued
pursuant to such an adjustment.  The Fair Market Value of any fractional  shares
resulting from adjustments under this Section shall, where appropriate,  be paid
in cash to the  Participant.  The  determinations  and  adjustments  made by the
Committee under this Section shall be conclusive.

16.      Effect of a Change in Control

Unless  otherwise  provided by the  Committee in an Award  Agreement,  any Award
granted  hereunder  that has not been  vested  hereunder,  or been  canceled  or
forfeited  under any provision of the Plan,  shall become fully  exercisable and
vest immediately upon a Change in Control.  Any Awards deferred under Section 14
shall be paid prior to or as soon as practicable  following a Change in Control,
as determined by the Committee in its sole discretion.

17.      Tax Withholding

Whenever  the Company  proposes  or is  required to issue or transfer  shares of
Common  Stock under the Plan,  the  Company  shall have the right to require the
recipient to remit to the Company an amount  sufficient  to satisfy any Federal,
state  or local  withholding  tax  requirements  prior  to the  delivery  of any
certificate for such shares, or in the discretion of the Committee,  the Company
may withhold from the shares to be delivered shares sufficient to satisfy all or
a portion of such tax withholding requirements. Whenever under the Plan payments
are to be made in cash,  such  payments  may be net of an amount  sufficient  to
satisfy any Federal, state and local tax withholding requirements.

18.      Award Forfeiture Provision

Notwithstanding any other provision of this Plan to the contrary,  the Committee
may provide for the forfeiture of Awards under the Plan and the benefits derived
therefrom,  in the event a Participant (or, if applicable,  his heir, legatee or
permitted  transferee) engages in conduct deemed to be harmful to, or not in the
best interests of, the Company or if the  Participant  (or, if  applicable,  his
heir, legatee or permitted transferee) fails to comply with any of the terms and
conditions of the Plan or the  agreement  executed by such  Participant  (or, if
applicable,  his heir,  legatee or permitted  transferee)  evidencing  an Award,
unless such failure is remedied by within ten days after having been notified of
such

                                       35


failure  by the  Committee.  Such  provisions  shall be  included  in the  Award
Agreements  approved from time to time by the Committee and may be waived by the
Committee,  or its duly appointed  agent, as determined in the Committee's  sole
discretion.

19.      Transferability

     (a) Except as  specifically  provided  in Section  19(b),  no Awards may be
         transferred by the  Participant  otherwise than by will, by the laws of
         descent  and  distribution,  and during the  Participant's  lifetime an
         Option may be exercised only by him. During the  Restriction  Period or
         Deferral  Period,  if  applicable,  immediately  upon  any  attempt  to
         transfer any rights under or to a share of Restricted Stock or Deferred
         Stock,  such share,  and all of the rights  related  thereto,  shall be
         forfeited by the  Participant  and the transfer shall be of no force or
         effect. Upon the death of a Participant,  outstanding Awards granted to
         such  Participant may be exercised (if applicable) only by those person
         or persons  who shall have  acquired  such right to exercise by will or
         the laws of descent and  distribution.  Such Awards shall be subject to
         the  restrictions,  conditions and limitations  that were applicable to
         such  Award  at the time of the  Participant's  death  and  such  other
         restrictions,  conditions  and  limitations  that the  Committee  shall
         determine in its sole discretion upon the death of the Participant.

     (b) The Committee,  in its  discretion,  may allow for  transferability  of
         Non-Qualified  Options by the  Participant to children,  grandchildren,
         spouse or common law spouse,  siblings or parents of the Participant or
         to bona fide trusts,  partnerships or other entities  controlled by and
         of  which  the  beneficiaries  are  Immediate  Family  Members  of  the
         Participant   ("Immediate   Family  Members").   Any  Awards  that  are
         transferable  are further  conditioned on the Participant and Immediate
         Family Members agreeing to abide by the Company's then current transfer
         guidelines applicable to such types of Award.

20.      Effective Date, Termination and Amendment

     (a) Subject to the approval of the  shareholders of Programmer's  Paradise,
         Inc.  at   Programmer's   Paradise,   Inc.'s  2006  annual  meeting  of
         shareholders,  the Plan  shall be  effective  as of July 5,  2006  (the
         "Effective Date"). The Plan shall remain in full force and effect until
         the earlier of ten years from the date of shareholder  approval, or the
         date it is terminated  by the Board.  The Board shall have the power to
         amend, suspend or terminate the Plan at any time, provided that no such
         amendment shall be made without shareholder approval to the extent such
         approval is required  under section 422 of the Code,  section 162(m) of
         the Code,  the rules of a stock exchange or any other  applicable  law.
         Termination  of the Plan under  this  Section  shall not affect  Awards
         outstanding under the Plan at the time of termination.

     (b) The Committee shall have the power unilaterally and without approval of
         a  Participant  to amend an  existing  Award in order to carry  out the
         purposes  of the Plan so long as such an  amendment  does not take away
         any benefit  granted to a  Participant  by the Award and as long as the
         amended Award comports with the terms of the Plan;  provided,  however,
         that  prior to a  Change  in  Control,  if and to the  extent  that the
         Committee  determines   Programmer's   Paradise,   Inc.'s  federal  tax
         deduction  in respect of an Award may be limited as a result of section
         162(m) of the Code, the Committee may take any and all actions it deems
         necessary,  in its sole and  absolute  discretion  with  respect to any
         Award  (including the amendment,  delay or  cancellation of an Award to
         the detriment of a Participant)  hereunder to eliminate or minimize the
         non-deductible  portion of any Award. Nothing herein shall restrict the
         Committee's ability to exercise its discretionary authority pursuant to
         Section 4, which discretion may be exercised  without  amendment to the
         Plan or an Award.

21.      Limitation of Implied Rights

     (a) Neither a  Participant  nor any other  person  shall,  by reason of the
         Plan, acquire any right in or title to any assets, funds or property of
         the Company whatsoever,  including,  without  limitation,  any specific
         funds,  assets,  or other  property  which the  Company,  in their sole
         discretion,  may set aside in  anticipation  of a  liability  under the
         Plan. A Participant shall have only a contractual right to the stock or
         amounts, if any, payable under the Plan, unsecured by any assets of the
         Company.  Nothing  contained  in the Plan shall  constitute a guarantee
         that  the  assets  of such  companies  shall be  sufficient  to pay any
         benefits to any person.

     (b) Nothing  contained  in the  Plan or any  Award  shall  confer  upon any
         Participant  any  right  with  respect  to  the   continuation  of  his
         employment  or service by the Company or  interfere in any way with the
         right of the Company, subject to the terms of any separate agreement to
         the contrary, at any time to terminate such employment or service

                                       36



         or to increase or decrease the compensation of the Participant from the
         rate in existence at the time of the grant of an Award.

     (c) No person shall have any claim or right to receive an Award  hereunder.
         The Committee's granting of an Award to a Participant at any time shall
         neither require the Committee to grant an Award to such  Participant or
         any other  Participant  or other  person at any time nor  preclude  the
         Committee  from making  subsequent  grants to such  Participant  or any
         other Participant or other person.

     (d) No person  shall have any rights as a  shareholder  with respect to any
         shares of Common  Stock  covered by or  relating  to any Award  granted
         under  this  Plan  until  the date  that the  Participant  becomes  the
         registered owner of such shares. Except as otherwise expressly provided
         in an Award  Agreement,  no  adjustment  to any Award shall be made for
         dividends or other rights for which the record date occurs prior to the
         date such stock certificate is issued.

22.      Securities Law Matters

The Company shall be under no obligation to effect the registration  pursuant to
the  Securities  Act of 1933,  as amended,  of any  interests in the Plan or any
shares of Common Stock to be issued  hereunder or to effect  similar  compliance
under  any  state  laws.   Notwithstanding  anything  herein  to  the  contrary,
Programmer's  Paradise,  Inc.  shall not be  obligated  to cause to be issued or
delivered  any  certificates  evidencing  shares of Common  Stock under the Plan
unless and until Programmer's Paradise,  Inc. is advised by its counsel that the
issuance and delivery of such  certificates is in compliance with all applicable
laws,  regulations  of  governmental  authority  and  the  requirements  of  any
securities  exchange on which shares of Common Stock are traded.  The  Committee
may  require,  as a condition  of the  issuance  and  delivery  of  certificates
evidencing shares of Common Stock under the terms hereof,  that the recipient of
such shares make such covenants,  agreements and representations,  and that such
certificates bear such legends, as the Committee, in its sole discretion,  deems
necessary or desirable.

     (a) The exercise of any Option granted hereunder shall be effective only at
         such  time  as  counsel  to  Programmer's  Paradise,  Inc.  shall  have
         determined  that the  issuance  and  delivery of shares of Common Stock
         pursuant to such exercise is in compliance  with all  applicable  laws,
         regulations  of  governmental  authority  and the  requirements  of any
         securities  exchange on which  shares of Common  Stock are traded.  The
         Committee  may,  in  its  sole  discretion,   and  in  accordance  with
         procedures established by the Committee, defer the effectiveness of any
         exercise of an Option granted  hereunder in order to allow the issuance
         of shares of Common  Stock  pursuant  thereto  to be made  pursuant  to
         registration  or an exemption  from  registration  or other methods for
         compliance available under federal or state securities laws.

     (b) It is intended that the Plan be applied and  administered in compliance
         with Rule 16b-3 of the Exchange  Act, as amended from time to time.  If
         any  provision  of the Plan  would  be in  violation  of Rule  16b-3 if
         applied as written, such provision shall not have effect as written and
         shall be given effect so as to comply with Rule 16b-3, as determined be
         the  Committee and such  provision may be amended or Award  modified as
         determined in the sole discretion of the Committee.

23.      Severability of Provisions

If any provision of this Plan is held to be invalid or unenforceable,  the other
provisions  of the Plan  shall not be  affected  but shall be  applied as if the
invalid or unenforceable provision had not been included in the Plan.

24.      Applicable Law

Except to the extent  preempted by any applicable  federal law, the Plan will be
construed and  administered in accordance  with the laws of the  Commonwealth of
Delaware, without reference to the principles of conflicts of law.

                                       37



                                                                      PROXY CARD
                                                                      ----------

                           PROGRAMMER'S PARADISE, INC.
                             1157 Shrewsbury Avenue
                          Shrewsbury, New Jersey 07702

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

         The undersigned  hereby appoints WILLIAM H. WILLETT and SIMON F. NYNENS
with the power to  appoint  their  substitutes,  and hereby  authorizes  them to
represent  and to vote on behalf  of the  undersigned  all the  shares of common
stock, par value $.01 per share (the "Common Stock"), of Programmer's  Paradise,
Inc.,  that the undersigned  would be entitled to vote if personally  present at
the Annual  Meeting of  Stockholders  to be held at the  offices of  Programmers
Paradise Inc. (the "Company"),  1157 Shrewsbury Ave, Shrewsbury,  New Jersey, on
June  14,  2006 at 10:00  AM,  local  time or any  adjournment  or  adjournments
thereof,  hereby  revoking  all proxies  heretofore  given with  respect to such
shares,  upon the following  proposals more fully described in the notice of and
proxy statement for the Meeting (receipt whereof is hereby acknowledged).

1.    ELECTION OF DIRECTORS

FOR all nominees listed below |_| WITHHOLD AUTHORITY to vote for nominees listed
below |_|

(except as marked to the contrary below)

(INSTRUCTION:  To withhold  authority to vote for any  individual  nominee write
that nominee's name on the space provided below)

--------------------------------------------------------------------------------

WILLIAM H. WILLETT,  SIMON F. NYNENS, F. DUFFIELD  MEYERCORD,  EDWIN H. MORGENS,
ALLAN WEINGARTEN AND MARK T. BOYER




-----------------------------------------------------------------------------------       For          Against     Abstain
                                                                                                            

Vote on Proposals
2.      Approve Amendment to the Company's Amended and Restated Certificate of            |_|            |_|         |_|
        Incorporation
3.      Approve 2006 Stock Incentive Plan                                                 |_|            |_|         |_|
4.      To ratify Amper, Politziner and Mattia P.C as the
        Company's independent registered public accounting firm                           |_|            |_|         |_|
                                                                    (continued, and to be executed, on the reverse side)



THIS PROXY WHEN PROPERLY  EXECUTED,  WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE  UNDERSIGNED  STOCKHOLDER.  IF NO DIRECTION  IS MADE,  THIS PROXY WILL BE
VOTED  FOR EACH OF THE  NOMINEES  IN ITEM 1 AND FOR  PROPOSAL  2, 3 AND 4 AS THE
PROXIES  DEEM  ADVISABLE ON SUCH OTHER  MATTERS AS MAY PROPERLY  COME BEFORE THE
MEETING.

    Please sign exactly as the name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian,  please give full title as such. If a  corporation,  please
sign in full  corporate  name by President  or other  authorized  officer.  If a
partnership, please sign in partnership name by authorized person.

       I will |_|     will not |_|     attend this Meeting.

                         Dated:                                          , 2006
                               ------------------------------------------

                         ------------------------------------------------------
                         SIGNATURE

                         ------------------------------------------------------
                         SIGNATURE IF HELD JOINTLY.


    PLEASE  MARK,  SIGN,  DATE AND  RETURN  THE PROXY  CARD  PROMPTLY  USING THE
ENCLOSED ENVELOPE

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS