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Wayside Technology Group, Inc. – ‘PRER14A’ on 5/2/97

As of: Friday, 5/2/97 · Accession #: 1005150-97-346 · File #: 0-26408

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/02/97  Wayside Technology Group, Inc.    PRER14A                1:100K                                   Rci Group Inc/FA

Revised Preliminary Proxy Solicitation Material — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRER14A     Revised Proxy Materials                               28    150K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Certain Transactions Employee Benefit Plans Employment Agreements Incentive Stock Options Minimum Tax Non-Qualified Options Options Stock Option Plans 1995 Stock Plan
1	1st Page - Filing Submission
8	Employee Benefit Plans
"	Stock Option Plans
"	1995 Stock Plan
9	Options
10	Employment Agreements
12	Certain Transactions
16	Incentive Stock Options
17	Non-Qualified Options
18	Minimum Tax

PRER14A 1st Page of 28 TOC ↑Top Previous Next ↓Bottom Just 1st
PROGRAMMER'S PARADISE, INC.
1163 Shrewsbury Avenue
Shrewsbury, New Jersey 07702

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD JUNE 23, 1997

To our Stockholders:

Notice is hereby given that the Annual Meeting of Stockholders of
Programmer's Paradise, Inc. (the "Company") will be held at the Molly Pitcher
Hotel, Red Bank, New Jersey, on June 23, 1997 at 9:00 a.m., 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 consider and vote upon a proposal to amend the Company's 1995 Stock
Plan to limit the maximum option grant which may be made to an
employee in any calendar year;

3. To ratify the appointment by the Board of Directors of Ernst & Young
LLP as the independent auditors of the Company to examine and report
on its financial statements for the fiscal year beginning January 1,
1997; and

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

The close of business on April 30, 1997 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Meeting. 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 sign, date and
return the enclosed proxy promptly in the accompanying envelope which requires
no postage if mailed in the United States.

By Order of the Board of Directors,

Roger Paradis,
Chairman and Chief Executive Officer

April 30, 1997

PRER14A 2nd Page of 28 TOC 1st Previous Next ↓Bottom Just 2nd
PROGRAMMER'S PARADISE, INC.
1163 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 to be held at the
Molly Pitcher Hotel, Red Bank, New Jersey, on June 23, 1997 at 9:00 a.m., local
time, and at any adjournment or adjournments thereof, for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders. Any stockholder
giving such a proxy may revoke it by written notice to the Secretary of the
Company at the above-stated address at any time before it is exercised.
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
30, 1997.

VOTING SECURITIES

Only holders of shares of Common Stock, $.01 par value per share (the
"Common Stock"), of record at the close of business on April 30, 1997 are
entitled to vote at the Meeting. On the record date, the Company had issued and
outstanding 4,789,423 shares of Common Stock. 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. The affirmative vote of a majority of shares present in person or
represented by proxy at the Meeting and entitled to vote is necessary to approve
the amendment to the Company's 1995 Stock Plan and to ratify the selection of
Ernst & Young LLP as the Company's independent auditors. Abstentions and broker
non-votes are counted for purposes of determining the presence or absence of a
quorum for the transaction of business. If a stockholder, present in person or
by proxy, abstains on any matter, the stockholder's Common Stock will not be
voted on such matter. Thus, an abstention for voting on any matter has the same
legal effect as a vote "against" the matter even though the stockholder may
interpret such action differently. 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 (i) FOR the election of the nominees set forth under the caption
"Election of Directors", (ii) FOR the amendment to the Company's 1995 Stock Plan
and (iii) FOR ratification of Ernst & Young LLP as the independent auditors of
the Company for fiscal 1997.

Your vote is important. Accordingly, you are urged to sign 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.

PRER14A 3rd Page of 28 TOC 1st Previous Next ↓Bottom Just 3rd
PRINCIPAL STOCKHOLDERS

The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's Common Stock as of March
31, 1997, based on information provided to the Company, by (i) each of the
Company's directors, (ii) the Named Executive Officers and (iii) all executive
officers and directors of the Company as a group.

BENEFICIAL OWNERSHIP (1)
------------------------------
BENEFICIAL OWNER NUMBER PERCENT
---------------- ------ -------
Roger Paradis (2) 243,159 4.98%
Edwin Morgens (3) 161,171 3.36%
Edward Glassmeyer (3) (4) 98,691 2.06%
Daniel Bricklin (5) 20,025 *
F. Duffield Meyercord (6) 20,025 *
William Willett 10,000 *
Peter Lorenz (7) 255,592 5.23%
Joseph Popolo (8) 88,198 1.81%
John Broderick (9) 38,915 *
Jeffrey Largiader (10) 54,775 1.13%
Kathleen Innacelli (11) 45,250 *
Peter Lindsey (9) 9,375 *
Massimo Freschi (9) 20,300 0.42%
All Directors and Officers as a Group (12) 1,065,476 20.63%

* Less than 1 percent.

(1) 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. The information as to beneficial
ownership is based on 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.

(2) Includes options to purchase 96,393 shares of Common Stock. Includes 7,500
shares of Common Stock owned by his children with respect to which Mr.
Paradis disclaims beneficial ownership.

(3) Includes options to purchase 7,875 shares of Common Stock. With respect to
Mr. Morgens, includes 36,439 shares of Common Stock held by a trust for the
benefit of Mr. Morgens' daughter, with respect to which Mr. Morgens
disclaims beneficial ownership.

(4) Includes 90,816 shares of common Stock owned by Oak Investment Partners
III, L.P. ("Oak III"); Mr. Glassmeyer is Managing Partner of Oak Investment
Partners, the General Partner of Oak III and deemed to beneficially own the
shares of Common Stock held by this entity. Mr. Glassmeyer disclaims
beneficial ownership of these shares, as well as all options held
personally by him as a director of the Company, which are being held for
the benefit of Oak III.

(5) Includes options to purchase 7,500 shares of Common Stock.

(6) Includes options to purchase 8,775 shares of Common Stock.

(7) Includes options to purchase 95,998 shares of Common Stock.

(8) Includes options to purchase 83,971 shares of Common Stock.

(9) Includes options to purchase Common Stock.

PRER14A 4th Page of 28 TOC 1st Previous Next ↓Bottom Just 4th
(10) Includes options to purchase 52,275 shares of Common Stock.

(11) Includes options to purchase 43,250 shares of Common Stock.

(12) See footnotes 1 through 11 above.

The following stockholders are known by the Company to own beneficially
more than 5% of the Company's Common Stock as of March 31, 1997:

Beneficial Owner Beneficial Ownership (1)
Number Percent
------ -------
The TCW Group, Inc.
865 South Figueroa Street
Loa Angeles, CA 90017 300,000 6.3%

Weiss, Peck & Greer
1 New York Plaza
New York, New York 10004 330,000 6.9%

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

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, unless the proxy
contains contrary instructions. 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.

PRER14A 5th Page of 28 TOC 1st Previous Next ↓Bottom Just 5th
Set forth below is certain information with respect to each nominee:

Name Age Position(s)
---- --- -----------
Roger Paradis 52 President, Chief Executive Officer and
Chairman of the Board
Daniel S. Bricklin 44 Director
F. Duffield Meyercord(1) 50 Director
Edwin H. Morgens(2) 55 Director
William Willett(2) 60 Director
Allan Weingarten(1) 59 Director

----------------
(1) Member of Audit Committee
(2) Member of Compensation Committee

ROGER PARADIS joined the Company in 1988 as President, Chief Executive
Officer and a Director. Mr. Paradis has over twenty years experience in business
planning, financial management and product marketing. Prior to joining the
Company, Mr. Paradis was President of Amerinex Corporation, a private venture
capital firm in Saddle Brook, New Jersey. Mr. Paradis graduated from the United
States Naval Academy at Annapolis and the Navy's Nuclear Power School and has an
M.B.A. degree from The Harvard Graduate School of Business Administration.

DANIEL S. BRICKLIN became a director of the Company in December 1991.
Mr. Bricklin is the founder and President of Software Garden, Inc., a software
development company he formed in 1985. He presently serves as the Chief
Technical Officer and founder of Trellix Corporation. Mr. Bricklin is also a
member of the Board of Trustees of the Massachusetts Software Council. Mr.
Bricklin is the author of a number of the Company's software products, including
PAGEGARDEN, DEMO II, and DEMO-IT!. Mr. Bricklin has a B.S. degree in Electrical
Engineering/Computer Science from M.I.T. and an M.B.A. degree from The Harvard
Graduate School of Business Administration.

F. DUFFIELD MEYERCORD has served as a director of the Company since
December 1991. Mr. Meyercord is the Managing Director and founder of Meyercord
Advisors, Inc. and a partner and founder of Venturtech Management Inc., an
affiliate of the Venturtech Group, both of which are management consulting
firms. Mr. Meyercord currently serves as a director of the Peapack Gladstone
Bank. Mr. Meyercord has a B.A. degree in accounting and economics from
Birmingham-Southern College.

EDWIN H. MORGENS was a founder of the Company and has served as a
director of the Company since 1982. Mr. Morgens is and has been the Chairman and
co-founder of Morgens, Waterfall, Vintiadis & Co. Inc., an investment firm in
New York, New York since 1968. Mr. Morgens currently serves as a director of two
other public companies: Sheffield Exploration Co. and Intrenet, Inc. Mr. Morgens
has a B.A. degree in English from Cornell University and an M.B.A. degree from
The Harvard Graduate School of Business Administration.

WILLIAM WILLETT became a director of the Company in December 1996.
Since 1994, Mr. Willett has been the President and Chief Operating Officer as
well as a board member of Colorado Prime Foods located in New York. Mr. Willett
also serves on the board of directors of Concord Financial Services, Inc. Mr.
Willett has a B.A. degree in Marketing from the University of Bridgeport.

PRER14A 6th Page of 28 TOC 1st Previous Next ↓Bottom Just 6th
ALLAN D. WEINGARTEN was appointed to the Board in April 1997. Mr.
Weingarten is a former partner of Ernst & Young LLP, having served as the
engagement audit partner to the Company until his retirement in 1995. Mr
Weingarten currently serves on the board of The Ground Round Restaurants, Inc.
Mr. Weingarten holds a B.A. degree in Business Administration from Pace
University.

All directors hold office until the next annual meeting of stockholders
and until their successor are duly elected and qualified. Officers are elected
to serve, subject to the discretion of the Board of Directors, until their
successors are appointed. There are no family relationships among any of the
directors or executive officers of the Company.

The Board of Directors held three meetings during the last fiscal year.
None of the directors attended fewer than 75% of the number of meetings of the
Board of Directors or any committee of which he is a member, held during the
period in which he was a director or a committee member, as applicable.

The Compensation Committee, presently consisting of Messrs. Willett and
Morgens, reviews and recommends to the Board of Directors the compensation and
benefits of all officers of the Company, reviews general policy matters relating
to compensation and benefits of employees of the Company, and administers the
issuance of stock options to the Company's employees, directors and consultants.
The Compensation Committee held two meetings during the last fiscal year. The
Audit Committee, consisting of Messrs. Meyercord, Weingarten and Glassmeyer,
until his recent resignation from the board, meets with management and the
Company's independent auditors to determine the adequacy of internal controls
and other financial reporting matters. The Audit Committee held two meetings
during the last fiscal year. There is no nominating committee of the Board of
Directors.

The directors of the Company receive a fee of $1,000 per quarter and
$500 per meeting for their services and are reimbursed for reasonable expenses
incurred in connection with attendance at Board and committee meetings. In April
1995, the Company adopted the 1995 Non-Employee Director Plan pursuant to which
the Company's non-employee directors receive automatic grants of options to
purchase shares of Common Stock, and Messrs. Morgens, Glassmeyer, Bricklin and
Meyercord were each granted options to purchase 18,750 shares of Common Stock,
which vest 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%, and have an exercise price of $4.00 per
share. Messrs. Willett and Weingarten also received similar grants upon their
election to the board. See "Stock Option Plans."

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. Section 16(a) under
the Securities Exchange Act of 1934 (the "Exchange Act"), requires the Company's
officers and directors and holders of more than ten percent of the Company's
outstanding 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 believed that during 1996 all required events of its
officers, directors and 10% stockholders required to be so reported, have been
filed, except that Messrs. Bricklin, Meyercord and Paradis all failed to file a
timely Form 4 which was subsequently rectified by the filing of Form 5..

EXECUTIVE COMPENSATION

The following table sets forth, for the last three completed fiscal
years, the annual and long-term compensation for services in all capacities of
the Company's Chief Executive Officer and the four other most highly compensated
executive officers of the Company whose total salary and bonus exceeded $100,000
(the "Named Executive Officers").

PRER14A 7th Page of 28 TOC 1st Previous Next ↓Bottom Just 7th
[Enlarge/Download Table]

SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
SECURITIES
FISCAL UNDERLYING ALL OTHER
NAME AND POSITION YEAR ENDED SALARY BONUS OPTIONS(#) COMPENSATION (1)
----------------- ---------- ------ ----- ---------- ----------------

Roger Paradis, President and 1996 $187,750 $56,664 24,800 (3) $6,251
Chief Executive Officer 1995 175,000 120,145 37,500 (5) 6,778
1994 175,000 111,250 -- 5,434

Peter Lorenz, Executive Vice 1996 165,476 51,515 -- --
President
European Operations 1995 184,285 81,052 15,000 (6) --
1994 88,608 16,244 120,000 (6) --

Joseph Popolo, Executive Vice 1996 157,500 43,387 19,100 (3) 3,596
President Domestic Operations 1995 138,077 34,727 86,250 (7) 3,129
1994 -- -- -- --

John P. Broderick, Vice President 1996 127,500 35,252 27,500 (3)(4) 4,093
of Finance and Chief Financial 1995 86,846 30,097 37,500 (8) 2,844
Officer 1994 -- -- -- --

Jeffrey Largiader Vice President 1996 111,000 30,642 13,300 (3) 3,647
Marketing 1995 101,667 24,309 7,875 (5) 3,495
1994 93,333 23,750 7,500 (6) 3,245

Peter Lindsey, Vice President 1996 110,019 27,505 -- --
Pan-European Catalog Operations 1995 10,607 (10) 7,872 25,000 (9) --
1994 -- -- -- --

Kathleen Innacelli, Vice President 1996 89,550 24,622 10,900 (3) 6,605 (2)
Fulfillment Operations 1995 84,700 19,864 4,125 (5) 5,578 (2)
1994 78,250 20,625 -- 2,348

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

(2) Also includes $3,061 and $2,503 in tuition payments in 1996 and 1995
respectively.

(3) Non-qualified Options to purchase Common Stock with an exercise price of
$5.875 per share which are fully vested.

(4) Includes 11,000 Options to purchase Common Stock with an exercise price of
$5.625 per share, vesting in equal annual installments over a three year
period.

(5) Options to purchase Common Stock with an exercise price of $4.00 per share,
vest in equal annual installments over a five year period.

(6) Options to purchase Common Stock with an exercise price of $0.67 per share,
vest in equal monthly installments over a four year period

(7) Includes options to purchase 75,000 shares of Common Stock with an exercise
price of $1.00 per share, which vest in equal monthly installments over a
three year period and options to purchase 11,250 shares of Common Stock
with an exercise price of

PRER14A 8th Page of 28 TOC 1st Previous Next ↓Bottom Just 8th
$4.00 per share, which vest in equal annual installments over a five year
period.

(8) Options to purchase Common Stock have an exercise price of $4.00 per share
and vest in equal monthly installments over a four year period.

(9) Options to purchase Common Stock have an exercise price of $7.50 per share
and vest in equal quarterly installments over a five year period.

(10) Mr. Lindsey was hired by the Company in November 1995. Represents the
portion of his annual salary of $10,607 paid in 1995 since such date.

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 Internal Revenue Code of 1986, as amended (the "Code"),
for its 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 1996 were approximately
$59,000.

The Company maintains a performance bonus plan for its senior executive
which provides for a bonus of up to 25% of the executive's base salary in the
event certain performance targets, based upon revenue and operating
profitability, are achieved (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"). In 1996, such over target bonus was set at 12% of the
amount by which the Company's net income after taxes exceeds the performance
target. The Company paid aggregate cash bonuses of $182,272 to officers and
senior executives pursuant to this bonus plan for the 1996 fiscal year. Subject
to approval by its Board of Directors, the Company anticipates that this bonus
plan will continue in effect for the 1997 fiscal and subsequent years and that
bonuses under this plan in the 1997 fiscal year and thereafter will be based on
the Company's meeting or exceeding profitability targets established by the
Compensation Committee.

STOCK OPTION PLANS

1986 STOCK OPTION PLAN. The Company's 1986 Stock Option Plan (the "1986
Option Plan") expired in accordance with its terms in March 1996. Pursuant to
the 1986 Stock Option Plan "incentive stock options" ("ISO" or "ISOs") to
purchase shares of Common Stock were granted to officers and other key employees
(some of whom are also directors) of the Company. Additionally, the Directors of
the Company were granted non-qualified options pursuant to the 1986 Option Plan.
A total of 567,336 shares of Common Stock are subject to outstanding options and
have been reserved for issuance under the 1986 Option Plan, with exercise prices
ranging from $0.24 to $6.00 per share. Due to its expiration and termination, no
additional options may be granted under the 1986 Stock Option Plan.

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

PRER14A 9th Page of 28 TOC 1st Previous Next ↓Bottom Just 9th
conditions relating to ISOs necessary to comply with the provisions of Section
422 of the Code.

The 1995 Stock Plan currently authorizes the grant of Stock Rights to
acquire up to 462,500 shares of Common Stock. A total of 348,700 shares of
Common Stock are presently subject to outstanding Options under the 1995 Stock
Plan at exercise prices ranging from $4.00 to $10.50 per share. Unless sooner
terminated, the 1995 Stock Plan will terminate on April 21, 2005. 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 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 authorizes the grant of options for up to 112,500 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 joins the Board after April 1995
will automatically receive at that time, options to purchase 18,750 shares of
Common Stock. The 93,750 options granted to the current Outside Directors have
an exercise prices ranging from $4.00 to $7.50. All options granted to Outside
Directors have an exercise price equal to 100% of the fair market value on the
date of grant. There are currently 18,750 shares of Common Stock available for
grant under the 1995 Director Plan. 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%.

OPTIONS. The following tables set forth certain information with
respect to stock options granted to and exercised by the Named Executive
Officers during the fiscal year ended December 31, 1996.

[Enlarge/Download Table]

OPTION GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE AT
---------------------------------------------------------------------
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATE OF
SECURITIES OPTIONS EXERCISE STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO PRICE OPTION TERM (4)
----------------------------------
OPTIONS EMPLOYEES IN PER SHARE EXPIRATION
NAME GRANTED (#) FISCAL YEAR (1) ($/SH) (2) DATE (3) 5%($) 10%($)
---- ----------- --------------- ---------- -------- ----- ------

Roger Paradis 24,800 (5) 13.14% $5.88 1/22/06 $91,760 $232,376
Peter Lorenz 0 0.00% $0.00 $0 $0
Joseph Popolo 19,100 (5) 10.12% $5.88 1/22/06 $70,670 $178,967
John Broderick 16,500 (5) 8.74% $5.88 1/22/06 $61,050 $154,605
11,000 (6) 5.83% $5.63 3/29/06 $38,940 $98,670
Jeffrey Largiader 13,300 (5) 7.05% $5.88 1/22/06 $49,210 $124,621
Peter Lindsey 0 0.00% $0.00 $0 $0
Kathleen Innacelli 10,900 (5) 5.78% $5.88 1/22/06 $40,330 $102,133

(1) Based on a total of 188,701 options granted to employees and directors of
the Company in fiscal 1996, including the Named Executive Officers.

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(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, 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). 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.

(5) Non-Qualified Options to purchase Common Stock with an exercise price of
$5.875 per share which are fully vested.

(6) Options to purchase Common Stock with an exercise price of $5.625 per
share, vest in equal annual installments over a three year period.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUE TABLE

[Enlarge/Download Table]

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

Roger Paradis . . . . . . 11,250 $64,800 84,048 39,690 $ 414,978 $161,260
Peter Lorenz . . . . . .. -- -- 80,498 54,502 519,687 318,663
Joseph V. Popolo . . . .. -- -- 71,315 34,035 345,856 185,719
John P. Broderick . . . . -- -- 31,343 33,657 70,927 91,510
Jeffrey Largiader . . . . -- -- 48,150 11,400 254,181 54,033
Peter Lindsey . . . . . . -- -- 6,250 18,750 (1,563) (4,688)
Kathleen Innacelli . . . -- -- 41,750 4,650 227,273 19,608

(1) Calculated on the basis of the fair market value of the Common Stock of the
Company on December 31, 1996 of $7.25 per share as determined by the
closing price for the Company's Common Stock as reported on the NASDAQ
National Market.

EMPLOYMENT AGREEMENTS

Each of the Named Executive Officers has entered into an agreement that
includes a covenant not-to-compete and a confidentiality provision (a
"Confidentiality and Non-Compete Agreement"). 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.

The Company entered into an employment letter with Roger Paradis in May
1995 which provides for a base salary of $175,000 per year, with increases and
an annual bonus to be determined by the Board of Directors, the grant of certain
stock options, an automobile allowance, participation in the Company's benefit
plans and the right to designate a beneficiary to receive $500,000 of the $1.5
million key man insurance policy maintained by the Company. Mr. Paradis has the
right to terminate his employment at any time on not less than 60 days' prior
written notice. The Company has the right to terminate Mr. Paradis' employment
for "cause" (as defined in the employment letter), on 30

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days' prior written notice or without cause on 90 days' prior written notice. In
the event that Mr. Paradis' employment is terminated by the Company for any
reason, he is entitled to receive severance payments, including salary, benefits
and automobile allowance, for a period of four months from the date of
termination, with an automatic extension for an additional four months if Mr.
Paradis has not achieved employment in such time period. Additionally, in the
event that a change of control of the Company occurs (as described in the
employment letter) and Mr. Paradis elects to terminate his employment with the
Company within 18 months thereafter, Mr. Paradis is entitled to receive in a
lump-sum distribution, an amount equal to two-thirds (2/3) of his then current
annual salary, plus any bonus he may have earned for the most recently completed
full year of employment, plus his pro-rata bonus for the year of termination, at
such time as he gives the Company written notice of such election.

The Company's employment letter with Joseph V. Popolo provides for a
base salary of $150,000 per year and the grant of options to purchase 75,000
shares of Common Stock at an exercise price of $1.00 per share, vesting monthly
over a three-year period. Mr. Popolo is entitled to participate in the
Performance Bonus Plan and to receive the same employee benefits as the other
executive officers of the Company and up to six-months of severance payments,
which include his then current base salary and health insurance benefits. Mr.
Popolo has also entered into a Confidentiality and Non-Compete Agreement.

The Company's employment letter with John P. Broderick provides for a
base salary of $120,000 per year and the grant of options to purchase 37,500
shares of Common Stock at an exercise price of $4.00 per share, vesting over a
four-year period. Mr. Broderick is entitled to participate in the Performance
Bonus Plan and up to six-months of severance payments, which include his then
current base salary and health insurance benefits. Mr. Broderick has entered
into a Confidentiality and Non-Compete Agreement.

In June 1994, in connection with the acquisition by the Company of
ISP*D International Software Partners GmbH ("ISP*D"), the Company's German
subsidiary, Peter Lorenz entered into an Employment Agreement with the Company
and ISP*D, dated as of May 26, 1994, for a term of five years and providing for
a salary of DM 238,000 (approximately $173,000) per year. Additionally, Mr.
Lorenz was granted options to purchase shares of Common Stock and is entitled to
a performance bonus of up to DM 102,000 (approximately $71,000) per year
contingent upon reaching agreed-upon performance targets, the use of a luxury
automobile, and a direct pension insurance payment in an approximate amount of
DM 3,000 (approximately $2,000) per year. The Company may terminate Mr. Lorenz's
employment at any time after May 31, 1996 and in such event Mr. Lorenz is
entitled to receive severance benefits, which include salary (at a rate equal to
his then base salary for the first year and one-half of the base salary for the
second year), automobile reimbursement and health insurance benefits for a
two-year period (unless replacement employment is obtained prior to the
expiration of such period, in which case certain amounts are offset from the
amounts due thereunder). Mr. Lorenz's Employment Agreement also contains
provisions protecting the Company and ISP*D, including a covenant not-to-compete
and a confidentiality provision. The covenant not-to-compete prohibits Mr.
Lorenz for a period of two years 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. See "Certain Transactions."

PRER14A 12th Page of 28 TOC 1st Previous Next ↓Bottom Just 12th
CERTAIN TRANSACTIONS

In June 1994, the Company purchased 90% of the issued and outstanding
shares of ISP*D from ISE International S.A. ("ISE"), and was granted an option
to purchase at a future date the remaining 10% of the outstanding shares which
were owned by Mr. Peter Lorenz, the Managing Director of ISP*D. In connection
with the transaction, (i) the Company relieved ISE from DM 1,500,000 of loan
guarantees for ISP*D debt (approximately $938,000) by advancing DM 600,000
($375,000) to ISP*D and depositing DM 200,000 ($125,000) as collateral with and
issuing DM 300,000 ($187,500) in guarantees to ISP*D's bank and (ii) Mr. Lorenz
extended a personal guarantee to ISP*D's lending bank, entered into an
employment agreement with the Company and ISP*D, and was granted options to
purchase 120,000 shares of Common Stock, at an exercise price of $0.67 per
share, which options vest in equal installments over a four-year period. See
"Employment Agreements." The Company exercised its option and in January 1995
purchased the remaining 10% of the shares of ISP*D from Mr. Lorenz for a total
consideration of 165,000 shares of Common Stock and DM 450,000 (approximately
$273,000) in cash. Subsequent to such time, final adjustment to the purchase
price payable to Mr. Lorenz was made, and the Company confirmed the grant to him
of options to purchase an additional 15,000 shares of Common Stock, at an
exercise price of $0.67 per share, which options vest in equal installments over
a four-year period, issued to him an additional 30,000 shares of Common Stock
and paid him DM 66,000 (approximately $40,000) in cash.

Daniel S. Bricklin, individually and through Software Garden, Inc.
("SGI"), a company wholly-owned by Mr. Bricklin, receives royalties from the
Company in connection with the Company's exclusive license with SGI for DAN
BRICKLIN'S DEMO-IT! software. Under the terms of the Agreement, dated as of
December 29, 1994, between Lifeboat Publishing and SGI and the license for
trademark "Dan Bricklin", dated as of December 29, 1994, between the Company and
Mr. Bricklin (collectively, the "DEMO-IT! Agreements"), the Company is obligated
to pay a royalty equal to 13% and 2%, respectively, of net sales of DEMO-IT! by
the Company. Such royalty is payable quarterly and subject to certain minimum
payment thresholds. The Company paid royalty advances to SGI in the amount of
$250,000 in 1994, as an advance against certain future royalty amounts payable
until the royalty advance is fully recovered. In April, 1995, the Company, SGI
and Mr. Bricklin amended the DEMO-IT! Agreements to provide for the continued
development of DEMO-IT!. In late 1995, the Company entered into a trademark
license agreement with Mr. Bricklin in connection with its TIMELOCK software
(the "TIMELOCK Agreement"), pursuant to which Mr. Bricklin is to be paid a
royalty equal to 4% of net sales thereof. No royalties were paid pursuant to the
TIMELOCK Agreement in 1995. In 1991, the Company purchased from an unrelated
third party certain software products originally authored by, and certain
trademarks originally owned by, Mr. Bricklin, and as a result thereof, Mr.
Bricklin receives nominal royalties from the Company in respect of sales of such
software products. Aggregate royalty payments made by the Company to SGI or Mr.
Bricklin in respect of all of the above-referenced agreements for the years
ended December 31, 1994, 1995 and 1996 (including royalty advances paid as
described above) were $250,000, $200,037 and $74,596, respectively.

During 1996, the Company paid consulting fees of approximately $57,900
to Meyercord Advisors, Inc. F. Duffield Meyercord, a director of the Company, is
the principal of Meyercord Advisors, Inc. Mr. Meyercord and his firm were
contracted to advise, consult and provide outplacement services in conjunction
with the acquisition of the assets of The Software Developer's Company, acquired
in June 1996. This consulting agreement terminated with the finalization of the
purchase contract.

The Company has adopted a policy whereby all transactions between the
Company and its principal officer, directors and affiliates must be on terms no
less favorable to the Company than could be obtained from unrelated third
parties and will be approved by a majority of the disinterested members of the
Company's board of directors.

During 1996 options with respect to 125,500 shares were granted to
employees of the Company pursuant to the 1995 Stock Plan in accordance with Rule
701 promulgated under the Exchange Act.

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Edward F. Glassmeyer, F. Duffield Meyercord and Edwin H. Morgens served
as members of the Compensation Committee during the last completed fiscal year.
None of Messrs. Glassmeyer, Meyercord or Morgens (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 registrant 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 which has not been already
disclosed. See "Certain Transactions" for an arrangement with Mr. Meyercord.

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

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 executive which provides for
a bonus of up to 25% 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,
and amounts paid in respect of the 1996 fiscal year, 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. In 1996, in accordance with the above criteria, the executive officers
received stock options which are exercisable ratably over a five-year period as
well as certain non-qualified grants which are exercisable immediately.

The compensation of the Company's Chief Executive Officer in 1996
consisted of base salary, performance-based cash bonuses and stock option
grants. Of the total cash bonus earned, 93% was based upon reaching preset
domestic net income targets (i.e. the Performance Bonus Plan). Stock option
grants to the Chief Executive Officer were made in line with those granted to
other executive officers primarily considering responsibilities and relative
position to other members of the senior management team. Base salary level was
established considering base salaries of peer Chief Executive Officers with
similar executive responsibilities.

The Compensation Committee
--------------------------
William Willett
Edwin H. Morgens

STOCK PRICE PERFORMANCE GRAPH

The following graph and table illustrates a comparison of cumulative
shareholder return among the Company, the Standard & Poor's Midcap 400 Index and
an index of peer companies selected by the Company (the "Custom Peer Group
Index"). The members of the peer group are as follows: Creative Computers, Inc.,
Egghead Inc., Merisel, Inc., Microwarehouse, Inc. and Software Spectrum, Inc.
For the purpose of calculating the peer group average, the returns of each
company have been weighted according to its market capitalization. The
measurements assume that on July 18,1995 (the effective date of the Company's
Registration Statement on Form S-1), $100 was invested, alternatively, in

PRER14A 14th Page of 28 TOC 1st Previous Next ↓Bottom Just 14th
the Company's Common Stock, the Standard & Poor's Midcap 400 Index and the
Custom Peer Group Index.

[GRAPHIC OMITTED]

[Enlarge/Download Table]

Base
Period Return Return Return Return Return Return
7/18/95 9/31/95 12/31/95 3/31/96 6/30/96 9/30/96 12/31/96
-------------------------------------------------------------------------------------

PROGRAMMERS PARADISE INC $ 100.00 $ 105.00 $ 67.50 $ 56.25 $ 61.25 $ 65.00 $ 72.50
S&P MIDCAP 400 INDEX $ 100.00 $ 104.40 $ 105.89 $ 112.41 $ 115.65 $ 119.02 $ 126.23
PEER GROUP $ 100.00 $ 90.54 $ 78.52 $ 71.94 $ 45.96 $ 49.68 $ 29.09

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PROPOSAL 2
AMENDMENT TO THE 1995 STOCK PLAN
--------------------------------

In April 1997, the Board of Directors of the Company, subject to
stockholder approval, adopted an amendment to the 1995 Stock Plan of the Company
to limit the maximum option grant which may be made to an employee in any
calendar year to 200,000 shares (subject to adjustment for capital changes).
Such amendment is to enable the 1995 Stock Plan to satisfy a requirement of
Section 162(m) of the Internal Revenue Code of 1986 ("Section 162(m)") relating
to performance-based compensation which is not subject to a $1,000,000
deductibility limit.

Section 162(m) limits to $1,000,000 the deduction that a publicly-held
corporation may take for federal income tax purposes for compensation paid in
any year to each of its five highest paid officers. Regulations promulgated in
1995 designate certain compensation expenses which are exempt from this
$1,000,000 deductibility limitation, including certain employee stock options
and certain performance-based compensation meeting the requirements of Section
162(m).

The amendment to the 1995 Stock Plan is being proposed in response to
the definitive regulations adopted by the Internal Revenue Service with respect
to Section 162(m), including the transition rule which expires with this
upcoming meeting of the stockholders of the Company. Stockholder approval of the
amendment will preserve the tax deductibility under Section 162(m) of
compensation paid upon the exercise of certain options granted under the 1995
Stock Plan if total compensation for one of the five highest paid named
individuals exceeds $1,000,000. All compensation paid to all other employees is
not subject to Section 162(m) and stockholder approval is not necessary to
continue tax deductibility of such expenses. Should stockholders fail to approve
the proposed amendment to the 1995 Stock Plan, the 1995 Stock Plan would remain
in full force and effect, but all options under the 1995 Stock Plan of the named
individuals would be subject to the annual deductibility limitation of Section
162(m).

The complete text of the 1995 Stock Plan is attached as Exhibit A
hereto and the following description is qualified in its entirety by the full
text of the 1995 Stock Plan.

DESCRIPTION OF THE 1995 STOCK PLAN. The purpose of 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 parent or subsidiary (collectively, "Related
Corporations") are provided with the opportunity to purchase shares of Common
Stock of the Company pursuant to options which may qualify as "incentive stock
options" ("ISOs"), as defined in Section 422(b) of the Internal Revenue Code of
1986, as amended (the "Code"), 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."

A total of 462,500 shares of Common Stock are reserved for issuance
upon the exercise of options or in connection with awards or direct purchases of
stock under the 1995 Stock Plan (subject to adjustment for capital changes).
Shares subject to Options which for any reason expire or are terminated
unexercised may again be available for grant under the 1995 Stock Plan. Unless
sooner terminated, the 1995 Stock Plan will terminate on April 21, 2005.

The 1995 Stock Plan is administered by the Compensation Committee (the
"Compensation Committee") of the Board of Directors of the Company which,
subject to the terms of the 1995 Stock Plan, has the authority to determine to
whom Stock Rights shall be granted (subject to certain eligibility requirements
for grants of ISOs), the number of shares covered by each such grant, the
exercise or purchase price per share, the time or times at which Stock Rights
shall be granted, and other terms and provisions governing the Stock Rights, as
well as the restrictions, if any, applicable to shares of Common Stock issuable
upon exercise of Stock Rights. The Compensation

PRER14A 16th Page of 28 TOC 1st Previous Next ↓Bottom Just 16th
Committee may, from time to time, adopt amendments, certain of which are subject
to stockholder approval, and may terminate the 1995 Stock Plan at any time
(although such action shall not affect Stock Rights previously granted). Holders
of Stock Rights are protected against dilution in the event of a stock dividend,
recapitalization, stock split, merger or similar transaction. 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 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 Related Corporation,
the ISO expires no more than five years from its date of grant.

Exercise of any Stock Right, in whole or in part, under the 1995 Stock
Plan is effected by a written notice of exercise delivered to the Company at its
principal office together with payment for the Common Stock in full, or, at the
discretion of the Compensation Committee, (i) by the delivery of shares of
Common Stock of the Company, valued at fair market value, a promissory note, or
any combination thereof, or (ii) through an exercise notice payment procedure.
The 1995 Stock Plan contains terms providing for the exercise of Stock Rights by
or on behalf of former and deceased employees. ISOs granted pursuant to the 1995
Stock Plan are not assignable or transferable other than by will or by the laws
of descent and distribution and are exercisable during the optionee's lifetime
only by the optionee.

FEDERAL INCOME TAX CONSEQUENCES.

INCENTIVE STOCK OPTIONS. The following general rules are applicable for
Federal income tax purposes under existing law to employees who receive and
exercise ISOs granted under the 1995 Stock Plan:

Generally, no taxable income results to the optionee upon the grant of
an ISO or upon the issuance of shares to the optionee upon exercise of the ISO.
If shares acquired upon exercise of an ISO are disposed of after the later of
(i) two years following the date the Option was granted, or (ii) one year
following the date the shares are transferred to the optionee pursuant to the
exercise of the Option, the difference between the amount realized on such
disposition of the shares and the exercise price will be treated as long-term
capital gain or loss to the optionee.

If shares acquired upon exercise of an ISO are disposed of before the
expiration of one or both of the requisite holding periods (a "disqualifying
disposition"), then in most cases any excess of the fair market value of the
shares at the time of exercise of the Option over the exercise price, or, if
less, the actual gain on disposition, will be treated as compensation to the
optionee and will be taxed as ordinary income in the year of such disqualifying
disposition. Any excess of the amount realized by the optionee as the result of
a disqualifying disposition over the sum of (i) the exercise price and (ii) the
amount of ordinary income recognized under the above rules will be treated as
either long-term or short-term capital gain, depending upon the time elapsed
between receipt and disposition of such shares. In addition the special rules
applicable to ISOs will not apply if the optionee is not employed by the Company
at all times during the period from the date the Option is granted through the
date three months before the date the Option is exercised (one year in the case
of permanent disability). Failure to satisfy this requirement will result in the
Option being treated as a Non-Qualified Option. See the discussion of
Non-Qualified Options below.

In general, no tax deduction is allowed to the Company upon either
grant or exercise of an ISO under the 1995 Stock Plan. However, in any year that
an optionee recognizes compensation income on a disqualifying disposition of
shares acquired by exercising an ISO, the Company will generally be entitled to
a corresponding deduction for income tax purposes.

An optionee may be entitled to exercise an ISO by delivering shares of
the Company's Common Stock ("old stock") to the Company in exchange for the
Common Stock received upon exercise of the ISO ("option stock"), if the
optionee's ISO agreement so provides. In general, if an optionee exchanges old
stock for option stock instead of, or in addition to, paying part or all of the
exercise price in cash, no gain or loss will be recognized with respect to the
exchange of the old stock, and shares acquired upon exercise of the ISO will not
be subject to tax as explained above until the shares are sold. However, an
exception exists to this rule when the old stock is "statutory

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option stock" (as defined below) that has been held for a period less than the
applicable holding periods under the Code. In that event, the optionee will
realize ordinary compensation income with respect to the old stock in an amount
equal to the lesser of (i) the excess of the fair market value of the option
stock on the date of exercise of the ISO over the basis of the old stock, or
(ii) the fair market value of the old stock on the date it was originally
exercised over the original option exercise price. "Statutory option stock"
consists of stock acquired through the exercise of a "qualified stock option,"
"incentive stock option," an option acquired under an "employee stock purchase
plan" or a "restricted stock option," as these terms are defined in the Code.
Further, if the old stock used to exercise an ISO is Restricted Stock (as
defined below), exercise of the ISO with such Restricted Stock may be treated as
the lapse of the restrictions imposed on such Restricted Stock under the rules
discussed below, and the optionee may recognize income as a result.

NON-QUALIFIED OPTIONS. The following general rules are applicable for
Federal income tax purposes under existing law to holders of Non-Qualified
Options and to the Company.

The optionee does not realize any taxable income upon the grant of a
Non-Qualified Option, and the Company is not allowed a deduction by reason of
such grant. The optionee will recognize ordinary compensation income at the time
of exercise of a Non-Qualified Option in an amount equal to the excess, if any,
of the fair market value of the shares on the date of exercise over the exercise
price. In accordance with the regulations under the Code and applicable state
law, the Company will require the optionee to pay to the Company an amount
sufficient to satisfy withholding taxes in respect of such compensation income
at the time of the exercise of the Option. If the Company withholds shares
instead of cash to satisfy this withholding tax obligation, the optionee
nonetheless will be required to include in income the compensation income
attributable to the shares withheld. When the optionee sells the shares, such
optionee will recognize a capital gain or loss in an amount equal to the
difference between the amount realized upon the sale of the shares and such
optionee's basis in the shares (i.e., the exercise price plus the amount taxed
to the optionee as compensation income). If the optionee holds the shares for
longer than the statutory holding period, this gain or loss will be a long-term
capital gain or loss. The present statutory holding period is one year. In
general, the Company will be entitled to a tax deduction in the year in which
compensation income attributed to the Non-Qualified Options is recognized by the
optionee. The foregoing rules are based upon the assumptions that (i) the
Options do not have a readily ascertainable fair market value at the date of
grant and (ii) the Common Stock acquired by exercising the Non-Qualified Option
is either transferable or not subject to a "substantial risk of forfeiture" (as
such terms are defined in regulations under Section 83 of the Code).

An optionee may be entitled to exercise a Non-Qualified Option by
delivering shares of old stock to the Company in exchange for the Common Stock
received upon exercise of the option ("Non-Qualified Option stock"), if the
optionee's Non-Qualified Option agreement so provides. In general, if an
optionee exchanges old stock for Non-Qualified Option stock instead of, or in
addition to, paying part or all of the exercise price in cash, no gain or loss
will be recognized with respect to the exchange of the old stock. However, if
the fair market value of the Non-Qualified Option stock received exceeds the
fair market value of the old stock (at the time of exercise) delivered to
acquire the Non-Qualified Option stock, the transaction will be separated into
two parts for tax purposes. In the first part, the number of shares of old stock
delivered will be deemed exchanged, tax-free, for a like number of shares of the
Non-Qualified Option stock received, and the basis of the shares so received
will be the same as the basis of the shares of old stock delivered. In the
second part of the transaction, the balance of the shares of Non-Qualified
Option stock received will be treated as ordinary compensation income, and the
fair market value of these shares will constitute both the amount of
compensation income with respect to, and the basis for, such shares. Further, if
the old stock used to exercise a Non-Qualified Option is Restricted Stock (as
defined below), and the Common Stock acquired on exercise of the Non-Qualified
Option is not subject to restrictions substantially similar to those imposed on
such Restricted Stock, exercise of the Non-Qualified Option with such Restricted
Stock will be treated as the lapse of the restrictions imposed on such
Restricted Stock under the rules discussed below, and the optionee may recognize
income as a result.

SPECIAL RULES FOR RESTRICTED STOCK. Common Stock that is subject to
restrictions on transfer and also to a substantial risk of forfeiture (as
defined in regulations under Section 83 of the Code), referred to herein as

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"Restricted Stock," is subject to special tax rules. If the Common Stock
acquired on the exercise of a Non-Qualified Option or pursuant to an Award or
Purchase is Restricted Stock, the amount of income recognized by the optionee
generally will be determined as of the time the restrictions lapse, and will be
equal to the difference between the amount paid for the Restricted Stock and the
fair market value of the Restricted Stock at that time. In that case, the
payment to the Company of withholding taxes will be required as the income
arises, i.e., at the time the transfer restrictions on the stock lapse or the
substantial risk of forfeiture no longer exists.

Due to certain securities law restrictions, the Common Stock acquired
by officers and directors of the Company who exercise Non-Qualified Options will
be treated for tax purposes as Restricted Stock. Similarly, the Common Stock
acquired by officers and directors of the Company who exercise ISOs will be
treated for alternative minimum tax purposes (but not regular tax purposes) as
Restricted Stock.

If an optionee transfers Restricted Stock to the Company to exercise an
ISO, the restrictions on such Restricted Stock will be deemed to have lapsed on
the date of transfer, and the optionee may recognize income at that time.
Similarly, if the optionee transfers Restricted Stock to the Company to exercise
a Non-Qualified Option, and the stock received by the optionee on exercise is
not subject to restrictions substantially similar to those imposed on such
Restricted Stock, the restrictions on that Restricted Stock will be deemed to
have lapsed on the date of transfer, and the optionee may recognize income at
that time.

Under Section 83(b) of the Code, an election is available to the
optionee to include in gross income, in the taxable year that Restricted Stock
is first transferred to the optionee, the amount of any excess of the fair
market value (as determined under Section 83) of the Restricted Stock over the
amount (if any) paid for such stock. If this election is made and the optionee
pays the tax in year such election is made, no further tax liability will arise
at the time the transfer restrictions on the Restricted Stock lapse or the
substantial risk of forfeiture no longer exists. However, if shares of
Restricted Stock for which a Section 83(b) election is in effect are forfeited
while such shares are both nontransferable and subject to a substantial risk of
forfeiture, the loss realized by the optionee on the forfeiture, for federal
income tax purposes, is limited to the amount paid for such shares (not
including any compensation income recognized by the optionee at the time of
transfer) less any amount realized by the optionee on such forfeiture.
Restricted Stock acquired by exercising an ISO generally is not subject to the
rules of Section 83, but rather the rules discussed above under Incentive Stock
Options.

MINIMUM TAX. In addition to the tax consequences described above, the
exercise of ISOs granted under the 1995 Stock Plan may result in a further
"minimum tax" under the Code. The Code provides that an "alternative minimum
tax" will be applied against a taxable base which is equal to regular taxable
income, adjusted for certain limited deductions and losses, increased by items
of tax preference, and reduced by a statutory exemption. The statutory exemption
is phased out for certain higher income taxpayers. The bargain element at the
time of exercise of an ISO, i.e., the amount by which the value of the Common
Stock received upon exercise of the ISO exceeds the exercise price, is included
in the optionee's alternative minimum taxable income for purposes of the minimum
tax, subject to the rules applicable to Restricted Stock.

Thus, if upon exercise of an ISO an optionee receives stock which is
not Restricted Stock, the bargain element is included in the optionee's
alternative minimum taxable income in the year of exercise. If the optionee
receives Restricted Stock on exercise of an ISO, the bargain element is measured
and included in alternative minimum taxable income in the year(s) that the
restrictions on the stock lapse(s), unless the optionee files a Section 83(b)
election under the Code with the Internal Revenue Service within 30 days of the
date of exercise of the ISO and thereby elects to include the bargain element in
alternative minimum taxable income in the year of exercise. For purposes of
determining alternative minimum taxable income (but not regular taxable income)
for any subsequent year in which the taxpayer sells the stock acquired by
exercise of the ISO, the basis of such stock will be its fair market value at
the time the ISO was exercised. A taxpayer is required to pay the higher of his
regular tax liability or the alternative minimum tax. A taxpayer who pays
alternative minimum tax attributable to the exercise of an ISO may be entitled
to a tax credit against regular tax liability in later years.

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ERISA. The 1995 Stock Plan is not an employee benefit plan which is
subject to the provisions of the Employee Retirement Income Security Act of
1974, and the provisions of Section 401(a) of the Code are not applicable to the
1995 Stock Plan.

OPTIONS GRANTED UNDER THE 1995 STOCK PLAN. The chart below indicates
the number of Options that have been granted as of March 31, 1997 pursuant to
the 1995 Stock Plan to (i) the Named Executive Officers, (ii) all current
executive officers (other than the Named Executive Officers), as a group, (iii)
all current directors who are not executive officers, as a group and (iii) all
employees, including all current officers who are not executive officers, as a
group.

Number of
Grantee Options Granted
------- ---------------
Roger Paradis 74,800
Peter W. Lorenz 20,000
Joseph V. Popolo 30,100
Jeffrey Largiader 27,300
John P. Broderick 27,500
Kathleen Innacelli 15,900
Peter Lindsey 31,000
All other executive officers as a group 23,750
All non-employee directors as a group 0
All other employees as a group 98,350

The number of Stock Rights to be granted in the future pursuant to the
1995 Stock Plan is not currently determinable.

PROPOSAL 3
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
---------------------------------------------

The Board of Directors of the Company has designated Ernst & Young LLP
as the Company's independent auditors for the current fiscal year and recommends
ratification of their appointment. Representatives of Ernst & Young LLP are
expected to be present at the annual meeting of stockholders and will be
available to respond to appropriate questions and will be given the opportunity
to make a statement if they so desire.

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 voting them.

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, telecopier or telegraph. The Company does
not expect to pay any compensation for the solicitation of proxies.

PRER14A 20th Page of 28 TOC 1st Previous Next ↓Bottom Just 20th
The Annual Report of the Company on Form 10-K for the fiscal year ended
December 31, 1996 (the "Annual Report") has been forwarded to all stockholders.
The Annual Report, which includes audited financial statements, does not form
any part of the material for the solicitation of proxies.

The Company will furnish without charge to each person whose proxy is
being solicited, upon written request of any such person, a copy of the Annual
Report as filed with the Securities and Exchange Commission, including the
financial statements and schedules. Requests for copies of such report should be
directed to Roger Paradis, President, Programmer's Paradise, Inc, 1163
Shrewsbury Avenue, Shrewsbury New Jersey 07702.

STOCKHOLDER PROPOSALS

The Annual Meeting of Stockholders for the fiscal year ending December
31, 1997 is expected to be held on or about June 15 ,1998, with the mailing of
proxy materials for such meeting to be made on or about April 30, 1997. All
proposals of stockholders intended to be presented at the Company's next Annual
Meeting of Stockholders must be received at the Company's executive office no
later than November 30, 1997 in order to be consulted for inclusion in the proxy
statement and form of proxy related to that meeting.

By Order of the Board of Directors,

Roger Paradis, Chairman
and Chief Executive Officer

April 30, 1997

PRER14A 21st Page of 28 TOC 1st Previous Next ↓Bottom Just 21st
Exhibit A

PROGRAMMER'S PARADISE, INC.
1995 STOCK PLAN*1

[AMENDMENT IS SET FORTH IN BOLD]

1. PURPOSE. The 1995 Stock Plan (the "Plan") is intended to provide
incentives: (a) to the officers and other employees of Programmer's Paradise,
Inc. (the "Company") and any present or future subsidiaries of the Company
(collectively, "Related Corporations") by providing them with opportunities to
purchase stock in the Company pursuant to options granted hereunder which
qualify as "incentive stock options" ("ISO" or "ISOs") under Section 422(b) of
the Internal Revenue Code of 1986, as amended (the "Code"); (b) to directors,
officers, employees and consultants of the Company and Related Corporations by
providing them with opportunities to purchase stock in the Company pursuant to
options granted hereunder which do not qualify as ISOs ("Non-Qualified Option"
or "Non-Qualified Options"); (c) to directors, officers, employees and
consultants of the Company and Related Corporations by providing them with
awards of stock in the Company ("Awards"); and (d) to directors, officers,
employees and consultants of the Company and Related Corporations by providing
them with 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
authorizations to make Purchases are referred to hereafter collectively as
"Stock Rights". As used herein, the terms "parent" and "subsidiary" mean "parent
corporation" and "subsidiary corporation", respectively, as those terms are
defined in Section 425 of the Code.

2. ADMINISTRATION OF THE PLAN.

(a) BOARD OR COMMITTEE ADMINISTRATION. The Plan shall be administered
by the Board of Directors of the Company (the "Board"). The Board may appoint a
Compensation Committee (the "Committee") of three or more of its members to
administer this Plan. To the extent required by Rule 16b-3 or any successor
provision ("Rule 16b-3") of the Securities Exchange Act of 1934, with respect to
specific grants of Stock Rights, the Plan shall be administered by a
disinterested administrator or administrators within the meaning of Rule 16b-3.
Subject to ratification of the grant or authorization of each Stock Right by the
Board (if so required by applicable state law), and subject to the terms of the
Plan, the Committee shall have the authority to (i) determine the employees of
the Company and Related Corporations (from among the class of employees eligible
under paragraph 3 to receive ISOs) to whom ISOs may be granted, and to determine
(from among the class of individuals and entities eligible under paragraph 3 to
receive Non-Qualified Options and Awards and to make Purchases) to whom
Non-Qualified Options, Awards and authorizations to make Purchases may be
granted; (ii) determine the time or times at which Options or Awards may be
granted or Purchases made; (iii) determine the option price of shares subject to
each Option, which price shall not be less than the minimum price specified in
paragraph 6, and the purchase price of shares subject to each Purchase; (iv)
determine whether each Option granted shall be an ISO or a Non-Qualified Option;
(v) determine (subject to paragraph 7) the time or times when each option shall
become exercisable and the duration of the exercise period; (vi) determine
whether restrictions such as repurchase options are to be imposed on shares
subject to Options, Awards and Purchases and the nature of such restrictions, if
any, and (vii) interpret the Plan and prescribe and rescind rules and
regulations relating to it. If the Committee determines to issue a Non-Qualified
Option, it shall take whatever actions it deems necessary, under Section 422 of
the Code and the regulations promulgated thereunder, to ensure that such Option
is not treated as an ISO. The interpretation and construction by the Committee
of any provisions of the Plan or of any Stock Right granted under it shall be
final unless otherwise determined by the Board. The Committee may from time to
time adopt such rules and regulations for carrying out the Plan as it may deem
best. No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Stock Right
granted under it.

(b) COMMITTEE ACTION. The Committee may select one of its members as
its chairman, and shall hold

----------
* All numbers of shares of Common Stock set forth herein have been adjusted
to account for the four-for-three reverse stock split effected on May 25,
1995.

PRER14A 22nd Page of 28 TOC 1st Previous Next ↓Bottom Just 22nd
meetings at such time and places as it may determine. Acts by a majority of the
Committee, or acts reduced to or approved in writing by a majority of the
members of the Committee, shall be the valid acts of the Committee. All
references in this Plan to the Committee shall mean the Board if no Committee
has been appointed. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies
however caused, or remove all members of the Committee and thereafter directly
administer the Plan.

(c) GRANT OF STOCK RIGHTS TO BOARD MEMBERS. Stock Rights may be granted
to members of the Board consistent with the provisions of the third sentence of
paragraph 2(a) above, if applicable. All grants of Stock Rights to members of
the Board shall in all other respects be made in accordance with the provisions
of this Plan applicable to other eligible persons. Consistent with the
provisions of the third sentence of paragraph 2(a) above, members of the Board
who are either (i) eligible for Stock Rights pursuant to the Plan or (ii) have
been granted Stock Rights may vote on any matters affecting the administration
of the Plan or the grant of any Stock Rights pursuant to the Plan, except that
no such member shall act upon the granting to himself of Stock Rights, but any
such member may be counted in determining the existence of a quorum at any
meeting of the Board during which action is taken with respect to the granting
to him of Stock Rights.

3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted to any employee
of the Company or any Related Corporation. Those officers and directors of the
Company who are not employees may not be granted ISOs under the Plan.
Non-Qualified Options, Awards and authorizations to make Purchases may be
granted to any director (whether or not an employee), officer, employee or
consultant of the Company or any Related Corporation. The Committee may take
into consideration a recipient's individual circumstances in determining whether
to grant an ISO, a Non-Qualified Option or an authorization to make a Purchase.
Granting of any Stock Right to any individual or entity shall neither entitle
that individual or entity to, nor disqualify him from, participation in any
other grant of Stock Rights.

4. STOCK. The stock subject to Options, Awards and Purchases shall be
authorized but unissued shares of Common Stock of the Company, par value $.01
per share (the "Common Stock"), or shares of Common Stock re-acquired by the
Company in any manner. The aggregate number of shares which may be issued
pursuant to the Plan is 462,500 shares, subject to adjustment as provided in
paragraph 13. Any such shares may be issued as ISOs, Non-Qualified Options or
Awards, or to persons or entities making Purchases, so long as the number of
shares so issued does not exceed such number, as adjusted or amended from time
to time by a vote of stockholders or otherwise pursuant to paragraph 13. If any
Option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable in
whole or in part, the unpurchased shares subject to such Options shall again be
available for grants of Stock Rights under the Plan.

5. GRANTING OF STOCK RIGHTS. Stock Rights may be granted under the Plan
at any time on or after April 21, 1995 and prior to April 21, 2005. The date of
grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant. The Committee shall have the right, with the consent of the optionee, to
convert an ISO granted under the Plan to a Non-Qualified Option pursuant to
paragraph 16.

6. MINIMUM OPTION PRICE; ISO LIMITATIONS.

(a) PRICE FOR NON-QUALIFIED OPTIONS. The exercise price per share
specified in the agreement relating to each Non-Qualified Option granted under
the Plan shall in no event be less than the lesser of (i) the book value per
share of Common Stock as of the end of the fiscal year of the Company
immediately preceding the date of such grant, or (ii) fifty (50%) percent of the
fair market value per share of Common Stock on the date of such grant.

(b) PRICE FOR ISOS. The exercise price per share specified in the
agreement relating to each ISO granted under the Plan shall not be less than the
fair market value per share of Common Stock on the date of such grant. In the
case of an ISO to be granted to an employee owning stock possessing more than
ten percent (10%) of the

PRER14A 23rd Page of 28 TOC 1st Previous Next ↓Bottom Just 23rd
total combined voting power of all classes of stock of the Company or any
Related Corporation, the price per share specified in the agreement relating to
such ISO shall not be less than one hundred ten percent (110%) of the fair
market value per share of Common Stock on the date of grant.

(c) $100,000 ANNUAL LIMITATION ON ISOS. Each eligible employee may be
granted ISOs only to he extent that, in the aggregate under this Plan and all
incentive stock option plans of the Company and any Related Corporation, such
ISOs do not become exercisable for the first time by such employee during any
calendar year in a manner which would entitle the employee to purchase more than
$100,000 in fair market value (determined at the time the ISOs were granted) of
Common Stock in that year. Any options granted to an employee in excess of such
amount will be granted as Non-Qualified Options.

(d) DETERMINATION OF FAIR MARKET VALUE. If, at the time an Option is
granted under the Plan, the Company's Common Stock is publicly traded, "fair
market value" shall be determined as of the last business day for which the
prices or quotes discussed in this sentence are available prior to the date such
Option is granted and shall mean (i) the average (on that date) of the high and
low prices of the Common Stock on the principal national securities exchange on
which the Common Stock is traded, if the Common Stock is then traded on a
national securities exchange; or (ii) the last reported sale price (on that
date) of the Common Stock on the NASDAQ National Market List, if the Common
Stock is not then traded on a national securities exchange; or (iii) the average
of the closing bid and asked prices last quoted (on that date) by an established
quotation service for over-the-counter securities, if the Common Stock is not
reported on the NASDAQ National Market List. However, if the Common Stock is not
publicly traded at the time an option is granted under the Plan, "fair market
value" shall be deemed to be the fair value of the Common Stock as determined by
the Committee after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and offer prices of the
Common Stock in private transactions negotiated at arm's length.

(E) MAXIMUM OPTION GRANT. THE MAXIMUM OPTION GRANT WHICH MAY BE MADE TO
AN EMPLOYEE OF THE COMPANY IN ANY CALENDAR YEAR SHALL NOT COVER MORE THAN
200,000 SHARES, SUBJECT TO ADJUSTMENT AS PROVIDED IN PARAGRAPH 13.

7. OPTION DURATION. Subject to earlier termination as provided in
paragraphs 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than (i) ten years and one day from the date of grant in
the case of Non-Qualified Options, (ii) ten years from the date of grant in the
case of ISOs generally, and (iii) five years from the date of grant in the case
of ISOs granted to an employee owning stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any Related Corporation. Subject to earlier termination as provided in
paragraphs 9 and 10, the term of each ISO shall be the term set forth in the
original instrument granting such ISO, except with respect to any part of such
ISO that is converted into a Non-Qualified Option pursuant to paragraph 16.

8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9
through 12, each option granted under the Plan shall be exercisable as follows:

(a) FULL VESTING OR PARTIAL VESTING. The Option shall either be fully
exercisable on the date of grant or shall become exercisable thereafter in such
installments as the Committee may specify.

(b) FULL VESTING OF INSTALLMENTS. Once an installment becomes
exercisable it shall remain exercisable until expiration or termination of the
Option, unless otherwise specified by the Committee.

(c) PARTIAL EXERCISE. Each Option or installment may be exercised at
any time or from time to time, in whole or in part, for up to the total number
of shares with respect to which it is then exercisable.

PRER14A 24th Page of 28 TOC 1st Previous Next ↓Bottom Just 24th
(d) ACCELERATION OF VESTING. The Committee shall have the right to
accelerate the date of exercise of any installment of any Option; provided that
the Committee shall not accelerate the exercise date of any installment of any
Option granted to any employee as an ISO (and not previously converted into a
Non-Qualified Option pursuant to paragraph 16) if such acceleration would
violate the annual vesting limitation contained in Section 422(b)(7) of the
Code, as described in paragraph 6(c).

9. TERMINATION OF EMPLOYMENT. If an ISO optionee ceases to be employed
by the Company and all Related Corporations other than by reason of death or
disability as defined in paragraph 10, no further installments of his ISOs shall
become exercisable, and his ISOs shall terminate after the passage of sixty (60)
days from the date of termination of his employment, but in no event later than
on their specified expiration dates, except to the extent that such ISOs (or
unexercised installments thereof) have been converted into Non-Qualified Options
pursuant to paragraph 16. Employment shall be considered as continuing
uninterrupted during any bona fide leave of absence (such as those attributable
to illness, military obligations or governmental service) provided that the
period of such leave does not exceed ninety (90) days or, if longer, any period
during which such optionee's right to reemployment is guaranteed by statute. A
bona fide leave of absence with the written approval of the Committee shall not
be considered an interruption of employment under the Plan, provided that such
written approval contractually obligates the Company or any Related Corporation
to continue the employment of the optionee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any grantee of any Stock Right the right to
be retained in employment or other service by the Company or any Related
Corporation for any period of time.

10. DEATH; DISABILITY.

(a) DEATH. If an ISO optionee ceases to be employed by the Company and
all Related Corporations by reason of his death, any ISO of his may be
exercised, to the extent of the number of shares with respect to which he could
have exercised it on the date of his death, by his estate, personal
representative or beneficiary who has acquired the ISO by will or by the laws of
descent and distribution, at any time prior to the earlier of the specified
expiration date of the ISO or 180 days from the date of the optionee's death.

(b) DISABILITY. If an ISO optionee ceases to be employed by the Company
and all Related Corporations by reason of his disability, he shall have the
right to exercise any ISO held by him on the date of termination of employment,
to the extent of the number of shares with respect to which he could have
exercised it on that date, at any time prior to the earlier of the specified
expiration date of the ISO or 180 days from the date of the termination of the
optionee's employment. For the purposes of the Plan, the term "disability" shall
mean "permanent and total disability" as defined in Section 22(e)(3) of the Code
or successor statute.

11. ASSIGNABILITY. No Option shall be assignable or transferable by the
grantee except by will or by the laws of descent and distribution, and during
the lifetime of the grantee each option shall be exercisable only by him.

12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. In granting any Non-Qualified Option, the
Committee may specify that such Non-Qualified Option shall be subject to the
restrictions set forth herein with respect to ISOs, or to such other termination
and cancellation provisions as the Committee may determine. The Committee may
from time to time confer authority and responsibility on one or more of its own
members and/or one or more officers of the Company to execute and deliver such
instruments. The proper officers of the Company are authorized and directed to
take any and all action

PRER14A 25th Page of 28 TOC 1st Previous Next ↓Bottom Just 25th
necessary or advisable from time to time to carry out the terms of such
instruments.

13. ADJUSTMENTS. Upon the occurrence of any of the following events, an
optionee's rights with respect to options granted to him hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
written agreement between the optionee and the Company relating to such Option:

(a) STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of Options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.

(b) CONSOLIDATIONS OR MERGERS. If the Company is to be consolidated
with or acquired by another entity in a merger, sale of all or substantially all
of the Company's assets or otherwise (an "Acquisition"), the Committee or the
board of directors of any entity assuming the obligations of the Company
hereunder (the "Successor Board"), shall, as to outstanding Options, take one or
more of the following actions: (a) make appropriate provision for the
continuation of such Options by substituting on an equitable basis for the
shares then subject to such Options, or make provision for the exchange of such
Options, the consideration payable with respect to the outstanding shares of
Common Stock in connection with the Acquisition (less the exercise price thereof
not paid); or (b) make appropriate provision for the continuation of such
Options by substituting on an equitable basis for the shares then subject to
such Options any equity securities of the successor corporation; or (c) upon
written notice to the optionees, provide that all Options must be exercised, to
the extent then exercisable, within a specified number of days of the date of
such notice, at the end of which period the Options shall terminate; or (d)
terminate all Options in exchange for a cash payment equal to the excess of the
fair market value of the shares subject to such Options (to the extent then
exercisable) over the exercise price thereof; or (e) accelerate the date of
exercise of such options or of any installment of any such Options; or (f)
terminate all options in exchange for the right to participate in any stock
option or other employee benefit plan of any successor corporation.

(c) RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in subparagraph (b) above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, an optionee upon exercising an option shall be entitled to receive
for the purchase price paid upon such exercise the securities he would have
received if he had exercised his Option prior to such recapitalization or
reorganization.

(d) MODIFICATION OF ISOS. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs (a), (b) or (c) with respect to ISOs
shall be made only after the Committee, after consulting with counsel for the
Company, determines whether such adjustments would constitute a "modification"
of such ISOs (as that term is defined in Section 425 of the Code) or would cause
any adverse tax consequences for the holders of such ISOs. If the Committee
determines that such adjustments made with respect to ISOs would constitute a
modification of such ISOs, it may refrain from making such adjustments.

(e) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution of the Company, each option will terminate immediately prior to the
consummation of such proposed action or at such other time and subject to such
other conditions as shall be determined by the Committee.

(f) ISSUANCES OF SECURITIES. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to Options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.

PRER14A 26th Page of 28 TOC 1st Previous Next ↓Bottom Just 26th
(g) FRACTIONAL SHARES. No fractional shares shall be issued under the
Plan and the optionee shall receive from the Company cash in lieu of such
fractional shares.

(h) ADJUSTMENTS. Upon the happening of any of the foregoing events
described in subparagraphs (a), (b) or (c) above, the class and aggregate number
of shares set forth in paragraph 4 hereof that are subject to Stock Rights which
previously have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments to
be made under this paragraph 13 and, subject to paragraph 2, its determination
shall be conclusive. If any person or entity owning restricted Common Stock
obtained by exercise of a Stock Right made hereunder receives shares or
securities or cash in connection with a corporate transaction described in
subparagraphs (a), (b) or (c) above as a result of owning such restricted Common
Stock, such shares or securities or cash shall be subject to all of the
conditions and restrictions applicable to the restricted Common Stock with
respect to which such shares or securities or cash were issued, unless otherwise
determined by the Committee or the Successor Board.

14. MEANS OF EXERCISING STOCK RIGHTS. A Stock Right (or any part or
installment thereof) shall be exercised by giving written notice to the Company
at its principal office address. Such notice shall identify the Stock Right
being exercised and specify the number of shares as to which such Stock Right is
being exercised, accompanied by full payment of the purchase price therefor
either (a) in United States dollars in cash or by check, or (b) at the
discretion of the Committee, through delivery of shares of Common Stock having a
fair market value equal as of the date of the exercise to the cash exercise
price of the Stock Right, or (c) at the discretion of the Committee, by delivery
of the grantee's personal recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable Federal rate, as defined
in Section 1274(d) of the Code, or (d) in the discretion of the Committee, by
delivery (including by telecopier) to the Company or its designated agent of an
executed irrevocable option exercise form together with irrevocable instructions
to a broker-dealer to sell (or margin) a sufficient portion of the shares and
deliver the sale (or margin loan) proceeds directly to the Company to pay for
the exercise price, or (e) at the discretion of the Committee, by any
combination of (a), (b), (c) or (d) above. If the Committee exercises its
discretion to permit payment of the exercise price of an ISO by means of the
methods set forth in clauses (b), (c), (d) or (e) of the preceding sentence,
such discretion shall be exercised in writing at the time of the grant of the
ISO in question. The holder of a Stock Right shall not have the rights of a
shareholder with respect to the shares covered by his Stock Right until the date
of issuance of a stock certificate to him for such shares. Except as expressly
provided above in paragraph 13 with respect to changes in capitalization and
stock dividends, no adjustment shall be made for dividends or similar rights for
which the record date is before the date such stock certificate is issued.

15. TERM AND AMENDMENT OF PLAN. The Plan shall expire on April 21, 2005
(except as to Options outstanding on that date). The Board may terminate or
amend the Plan in any respect at any time, except that, without the approval of
the stockholders obtained within 12 months before or after the Board adopts a
resolution authorizing any of the following actions: (a) the total number of
shares that may be issued under the Plan may not be increased (except by
adjustment pursuant to paragraph 13); (b) the provisions of paragraph 3
regarding eligibility for grants of ISOs may not be modified; (c) the provisions
of paragraph 6(b) regarding the exercise price at which shares may be offered
pursuant to ISOs may not be modified (except by adjustment pursuant to paragraph
13); and (d) the expiration date of the Plan may not be extended. Except as
otherwise provided in this paragraph 15, in no event may action of the Board or
stockholders alter or impair the rights of a grantee, without his consent, under
any Stock Right previously granted to him.

16. CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOS.
The Committee, at the written request of any optionee, may in its discretion
take such actions as may be necessary to convert such optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an employee of
the Company or a Related Corporation at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such Options. At
the time of such conversion, the Committee (with the consent of the optionee)
may impose such conditions

PRER14A 27th Page of 28 TOC 1st Previous Next ↓Bottom Just 27th
on the exercise of the resulting Non-Qualified Options as the Committee in its
discretion may determine, provided that such conditions shall not be
inconsistent with the Plan. Nothing in the Plan shall be deemed to give any
optionee the right to have such optionee's ISOs converted into Non-Qualified
Options, and no such conversion shall occur until and unless the Committee takes
appropriate action. The Committee, with the consent of the optionee, may also
terminate any portion of any ISO that has not been exercised at the time of such
termination.

17. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.

18. GOVERNMENTAL REGULATION. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance or sale of such shares.

19. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, the grant of an Award, the making of a Purchase of Common
Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 20) or the vesting of restricted Common
Stock acquired on the exercise of a Stock Right hereunder, the Company, in
accordance with Section 3402(a) of the Code, may require the optionee, Award
recipient or purchaser to pay additional withholding taxes in respect of the
amount that is considered compensation includable in such person's gross income.
The Committee in its discretion may condition (i) the exercise of an Option,
(ii) the grant of an Award, (iii) the making of a Purchase of Common Stock for
less than its fair market value, or (iv) the vesting of restricted Common Stock
acquired by exercising a Stock Right, on the grantee's payment of such
additional withholding taxes.

20. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. Each employee who
receives an ISO must agree to notify the Company in writing immediately after
the employee makes a Disqualifying Disposition of any Common Stock acquired
pursuant to the exercise of an ISO. A Disqualifying Disposition is any
disposition (including any sale) of such Common Stock before the later of (a)
two years after the date the employee was granted the ISO, or (b) one year after
the date the employee acquired Common Stock by exercising the ISO. If the
employee has died before such stock is sold, these holding period requirements
do not apply and no Disqualifying Disposition can occur thereafter.

21. GOVERNING LAW; CONSTRUCTION. The validity and construction of the
Plan and the instruments evidencing Stock Rights shall be governed by the laws
of the State of Delaware or the laws of any jurisdiction in which the Company or
its successors in interest may be organized. In construing this Plan, the
singular shall include the plural and the masculine gender shall include the
feminine and neuter, unless the context otherwise requires. I.

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ATTACHMENT I

PROGRAMMER'S PARADISE, INC.
1163 SHREWSBURY AVENUE
SHREWSBURY, NEW JERSEY 07702

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints ROGER PARADIS and JOHN P. BRODERICK
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., held of record by the undersigned on April 30, 1997, at the Annual Meeting
of Stockholders to be held on June 23, 1997 at 9:00 A.M. local time at the Molly
Pitcher Hotel, Red Bank, New Jersey, 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 WITHHOLD AUTHORITY to vote for nominees
all nominees listed below 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)

ROGER PARADIS, DANIEL S. BRICKLIN, F. DUFFIELD MEYERCORD, EDWIN H. MORGENS,
WILLIAM WILLETT and ALLAN WEINGARTEN

2. PROPOSAL TO APPROVE the amendment to the Company's 1995 Stock Plan to limit
the maximum option grant which may be made to an employee in any calendar
year.

[ ] For [ ] Against [ ] Abstain

3. PROPOSAL TO RATIFY AND APPROVE the appointment of Ernst & Young LLP as the
Company's independent accountants for the fiscal year ending December 31,
1997.

[ ] For [ ] Against [ ] Abstain

4. In their discretion the Proxies are authorized to vote upon such other
business as may properly be brought before the Meeting.

(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 PROPOSALS 1, 2 AND 3.

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: , 1996

_______________________________________
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

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘PRER14A’ Filing	Date	First	Last	Other Filings

	4/21/05	9	26	4
	12/31/97	20	28	10-K
	11/30/97	20
	6/23/97	1	28	PRE 14A
Filed on:	5/2/97
	4/30/97	1	28	PRE 14A
	3/31/97	3	19	10-K, 10-Q
	1/1/97	1
	12/31/96	9	20	10-K
	5/31/96	11
	12/31/95	12
	5/25/95	21
	4/21/95	22
	12/31/94	12
	12/29/94	12
	5/26/94	11
				List all Filings

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Filing Submission 0001005150-97-000346 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Wayside Technology Group, Inc. – ‘PRER14A’ on 5/2/97

As of: Friday, 5/2/97 · Accession #: 1005150-97-346 · File #: 0-26408

Revised Preliminary Proxy Solicitation Material — Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Revised Preliminary Proxy Solicitation Material — Schedule 14A
Filing Table of Contents