8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 8-K


                             CURRENT REPORT Pursuant
                          to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


        Date of report (Date of earliest event reported) January 25, 2006

                                  Neoware, Inc.
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             (Exact Name of Registrant as Specified in Its Charter)

                                    Delaware
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                 (State or Other Jurisdiction of Incorporation)


       000-21240                                          23-2705700
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(Commission File Number)                       (IRS Employer Identification No.)


     400 Feheley Drive, King of Prussia, Pennsylvania 19406
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  (Address of Principal Executive Offices)                 (Zip Code)

                                 (610) 277-8300
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              (Registrant's Telephone Number, Including Area Code)


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          (Former Name or Former Address, if Changed Since Last Report)

         Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

     |_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)

     |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)

     |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))

     |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))





Item 1.01         Entry into a Material Definitive Agreement.

Neoware Senior Officer Bonus Plan for fiscal year 2006.

         On January 25, 2006, the Board of Directors, upon the recommendation of
the Compensation and Stock Option Committee (the "Compensation Committee") of
the Board of Directors of Neoware, Inc. (the "Company"), approved the Neoware
Senior Officer Bonus Plan (the "Plan"), a senior officer compensation plan
designed to attract, retain and reward the Company's executive and other senior
officers based on the achievement of key business objectives while maintaining
alignment of the senior officers' interests with those of the Company's
stockholders. Participants eligible under the Plan are the executive and other
senior officers, as defined in the Plan.

         Under the Plan, bonuses are measured on the achievement of specific
performance targets established by the Compensation Committee based on one or
more of the following criteria chosen by the Committee: revenues; earnings per
share; operating income; earnings before interest, taxes, depreciation and
amortization; net income; working capital; and gross profit. A participant's
bonus is determined by multiplying the participant's base salary by his or her
annual bonus percentage. Each year, the Compensation Committee selects the
criteria upon which to base the bonus plan and the specific performance targets
for the selected performance criteria for the year based on the Company's
budget. A target bonus expressed as a percentage of each participant's base
salary is then established by the Compensation Committee based on the
participant's position. After the eligible bonus percentage has been established
for each participant, the Compensation Committee may, at its discretion, adjust
the participant's bonus based upon both the Company's financial performance and
the participant's individual performance. Each participant's bonus percentage
may be increased or decreased at the discretion of the Compensation Committee
based upon his or her individual performance and the achievement of individual,
functional area and departmental objectives.

         On January 25, 2006, the Compensation Committee established performance
targets for the performance criteria chosen for the year. The Committee selected
operating income as the performance criteria for determining fiscal year 2006
bonuses. The Compensation Committee also approved the 2006 target bonus
percentages for each executive officers, as follows: Michael Kantrowitz,
President and Chief Executive Officer, 75%; Eric Rubino, Chief Operating
Officer, 50%; Keith Schneck, Executive Vice President and Chief Financial
Officer, 50%; Roy Zatcoff, Executive Vice President, 50%; Peter Bolton,
Executive Vice President, 15%; and Wei Ching, Executive Vice President, 50%.

         In addition to the above potential bonuses for 2006, the Company's
executives are also eligible to receive additional bonuses based on the
achievement of increased performance targets for operating income, resulting in
additional bonuses equal to up to 100% of the executive's bonus, as determined
by the Compensation Committee. The grant of the additional bonuses will be based
upon the achievement of the increased operating income target, individual goals
for 2006 and the individual's contribution to the Company's financial
performance.

         Notwithstanding the Plan provisions described above, the Compensation
Committee, at its sole discretion, may modify or change the Plan at any time,
including, but not limited to, revising performance targets, bonus multipliers,
strategic goals and objectives and actual bonus payments. The Compensation
Committee has the sole discretion to determine (i) whether Company performance
targets have been achieved, (ii) whether individual goals and objectives have
been achieved and (iii) the amount of any adjustments to a participant's
assigned target percentage based on items (i) and (ii) above or such other
criteria deemed appropriate by the Compensation Committee.

         All summaries or descriptions of the Plan are qualified in their
entireties by the Plan filed as exhibit 10.1 filed herewith.

Item 9.01         Financial Statements and Exhibits.

Exhibit 10.1      Neoware Senior Officer Bonus Plan





                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Dated:  January 31, 2006                    Neoware, Inc.
                                            ------------
                                            (Registrant)


                                            /s/ Keith D. Schneck
                                            ------------------------------------
                                            Keith D. Schneck
                                            Executive Vice President and
                                            Chief Financial Officer

EX-10

                        NEOWARE SENIOR OFFICER BONUS PLAN

PURPOSE OF THE PLAN

         The Senior Officer Bonus Plan (the "Plan") of Neoware, Inc. ("Neoware",
or the "Company") is designed to motivate and reward the senior officers of the
Company for their contribution to the achievement of key business objectives by
Neoware and to support Neoware's efforts in attracting, retaining and rewarding
senior officers, while aligning the interests of the senior officers with
shareholder expectations.

ELIGIBILITY; PARTIAL YEAR PAYMENT

         The Chief Executive Officer and the Senior Officers (as defined below)
of Neoware ("Participants") are eligible to participate in the Plan. Employees
who are hired by Neoware or are promoted or reclassified as a Senior Officer
during a Plan year will be eligible for a pro-rated bonus. In order to be
eligible to receive a bonus, the individual must be employed by Neoware at the
time of payment. For purposes of the Plan, a Senior Officer is defined as any
employee who is deemed by the Board of Directors to be an "executive officer"
under Item 401(b) of Regulation S-K of the Securities Exchange Act of 1934, as
well as other senior officers determined by the Chief Executive Officer and
approved by the Compensation and Stock Option Committee of the Board of
Directors (the "Compensation Committee").

BONUS PERIOD

         The Plan will be effective from July 1, 2005 to June 30, 2006 and will
automatically renew upon the anniversary date of the Plan unless terminated by
the Compensation Committee or the Board of Directors of Neoware. Bonuses are
based upon Neoware's financial performance and employee individual performance,
as set forth herein, during the applicable bonus period.

EXECUTIVE BONUS PLAN PAYMENT

         Although every effort will be made to process payments on a timely
basis, there is no guaranteed payment date associated with this Plan. Payments
will be made only after financial results have been reported and recommendations
have been submitted to and approved by the Compensation Committee.

PERFORMANCE AND INDIVIDUAL TARGETS

         Participants will be eligible for an annual cash incentive bonus based
on the achievement of predetermined goals and also based upon individual
performance, as set forth below. For the achievement of predetermined goals,
participants will have an assigned target equal to a specific percentage of
salary earned during the Plan year. The annual target is based on the
Participant's position in the Company. The target percentages can be increased
or decreased at the discretion of the Compensation Committee based upon the
individual Participant's performance, as set forth herein. The achievement of
individual Participant achievement goals can result in the individual's target
percentage being increased or decreased, as discussed below.


FINANCIAL PERFORMANCE

         All bonuses will be measured upon the achievement of specific
performance targets based on one or more of the following criteria:

         o Revenues

         o Earnings per share

         o Operating income

         o Earnings before interest, taxes, depreciation and amortization

         o Net income

         o Working capital

         o Gross profit

         Financial results higher or lower than the performance targets will
result in an adjustment up or down of the performance target based on evaluation
by the Compensation Committee. The performance target is then multiplied by the
Participant's assigned target percentage to determine the eligible bonus
percentage.

INDIVIDUAL PARTICIPANT ACHIEVEMENT

         Once the target percentage has been assigned to a Participant, the
Compensation Committee will have discretion to adjust the bonus for individual
Participants up or down based upon job performance and achievement of
individual, functional area and departmental objectives.

APPROVALS

         The actual bonus payment for all participants will be reviewed and
approved by the Compensation Committee.

ADMINISTRATION OF THE PLAN

         Notwithstanding the above, the Compensation Committee may modify or
change this Plan or its implementation at any time, including, but not limited
to, revising performance targets, bonus multipliers, strategic goals and
objectives and actual bonus payments. The Compensation Committee shall have the
sole discretion to determine (i) whether performance targets have been achieved,
(ii) whether individual goals and objectives have been achieved, and (iii) the
amount of any adjustments to a Participant's assigned target percentage based on
items (i) and (ii) above and such other criteria deemed appropriate by the
Compensation Committee. As a condition to participation, each Participant will
acknowledge that he or she has reviewed and understood this Plan, that the
bonuses under the Plan are discretionary and that no bonus will be payable
unless and until the actual amount of the bonus payment is approved by the
Compensation Committee.