8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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) July 12, 2006

Neoware, Inc.  

(Exact Name of Registrant as Specified in Its Charter)

Delaware	000-21240	23-2705700
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3200 Horizon Drive, King of Prussia, Pennsylvania	19406
(Address of Principal Executive Offices)	(Zip Code)

(610) 277-8300

(Registrant’s Telephone Number, Including Area Code)

(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.

On July 12, 2006, the Company entered into an employment offer letter with Klaus P. Besier, a member of the Company’s Board of Directors, defining the terms of his employment with the Company as President, reporting to the Chief Executive Officer. Mr. Besier will receive an annual base salary of $325,000 and will be eligible for an annual executive bonus of up to $162,500, based on quarterly and annual revenue and profitability goals and individual performance, upon the recommendation of the Chief Executive Officer. The bonus can be increased or decreased at the Compensation and Stock Option Committee’s discretion if the Company or Mr. Besier significantly exceeds or fails to achieve the goals. Goals will include the delivery of a minimum percentage of pro forma operating income calculated as a percentage of net revenues and other goals to be determined by the Committee upon the recommendation of the Chief Executive Officer. In addition, the Company has agreed to grant to Mr. Besier stock options to purchase 250,000 shares of the Company’s common stock, which will have a term of 10 years, will vest in four equal annual installments commencing one year after grant and will have an exercise price equal to the closing selling price of the common stock on the date of grant.

Under the terms of the letter, in the event of a “change in control” (as defined in the Company’s 2004 Equity Incentive Plan), if Mr. Besier is not offered a comparable position by the Company or the acquirer, or if he does not accept employment in any other capacity offered by the acquirer, the Company will continue to pay his base salary and the Company’s portion of his health care costs under COBRA for one year, pay an amount equal to the average of the annual bonus that he earned over the prior three years, and vest and accelerate exercisability of his outstanding stock options. In the event that Mr. Besier is offered a comparable position following a change in control, or he accepts employment in any other capacity offered by the acquirer, all of Mr. Besier’s outstanding stock options will vest and become exercisable one year after the change in control, provided that he is still working for the Company or the acquirer at that time. In the event that Mr. Besier’s employment is terminated by the Company during or at the end of his first year of employment for reasons other than cause, he will resign from his position on the Board and will receive severance payments for a period of six months, and any of his options that would have vested upon completion of his first year of employment will vest and become exercisable on his last day of employment.

The foregoing description of the material terms of Mr. Besier’s employment offer letter is qualified in its entirety by reference to the employment offer letter which is filed as Exhibit 10.1 hereto.

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

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On July 13, 2006, the Company announced that effective on July 12, 2006 it had appointed Klaus P. Besier as President of the Company responsible for worldwide sales, marketing, operations, engineering, human resources and administration. Mr. Besier has been a director of the Company since December 2005. Mr. Besier served as President and Chief Executive Officer of FirePond, Inc., a global provider of e-business solutions for managing multi-channel selling, from July 1997 until his retirement in December 2003 after the sale of the company. Prior to joining FirePond, he held various management positions, including the position of Chief Executive Officer of SAP America, Inc., a subsidiary of SAP AG, a provider of business application software. Mr. Besier is 55 years old and holds a bachelor's degree in business management and finance from the University of Economics in Berlin.

See Item 1.01 for a description of Mr. Besier’s employment offer letter, which is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits. The following documents are filed as exhibits to this report.

10.1      Employment offer letter dated July 12, 2006 from Neoware, Inc. to Klaus P. Besier.

99.1      Press Release dated June 13, 2006

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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 duly authorized.

	NEOWARE, INC.
Dated: July 13, 2006	By: /S/ Keith D. Schneck
	Keith D. Schneck, Executive Vice President and Chief Financial Officer

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EX-10.1

Exhibit 10.1

July 12, 2006

Mr. Klaus Besier
36 St Andrews Lane
Glenmoore, PA 19343

Dear Klaus:

I am pleased to offer you the position of President of Neoware, Inc. (the “Company”), responsible for worldwide Sales, Marketing, Operations, Engineering, HR and Administration, beginning on July 12, 2006.

In your capacity as President, you will be responsible for the overall operational success of the Company on a world wide basis. As President, you will report to the Chief Executive Officer (“CEO”). In this position, your place of employment will be the Philadelphia area during your tenure with the Company.

The base salary for your position is $12,500 payable every two weeks, and you will be eligible for 28 days of PTO annually, as described in the Neoware employee manual.

In addition to your base salary, you will be eligible for an executive bonus of up to 50% of your annual base salary based upon the Company meeting its quarterly and annual revenue and profitability goals, as well as your individual performance, as determined by the Company’s Compensation and Stock Option Committee (the “Committee”) upon the recommendation of the CEO. The annual executive bonus percentage can be increased or decreased at the option of the Committee should you or the Company significantly exceed or fail to achieve these goals. Goals will include the delivery of a minimum percentageof pro-forma operating income calculated as a percentage of revenues (GAAP operating income plus stock option expense and plus amortization of acquisition-related intangibles) each quarter, including the effect of bonus accruals included in operating expenses. Other goals will be added and these goals may be adjusted from time to time at the discretion of the Committee upon the recommendation of the CEO.To be eligible for this bonus you must be employed by the Company on the date the bonus is paid. The description of the terms of your bonus is subject to the terms of the Company’s Senior Officer Bonus Plan, a copy of which is attached hereto.

In connection with your employment, the Company intends to grant to you options to purchase 250,000 shares of common stock of the Company as detailed in your Award Agreement. These ten-year options will consist of a combination of ISO and non-qualified options vesting over four years, with twenty-five percent of the options vesting on each of the first four anniversaries subsequent to your start date.

You understand that this letter is not an employment agreement, and that you are an employee at will. This means that your employment can be terminated with or without cause, and with or without notice, at any time, at the option of either the Company or you, except as otherwise provided by law.

In the event of a “Change in Control,” should you not be offered a comparable position by the Company or the acquirer, or if you do not accept, in your sole discretion, employment in any other capacity offered by the acquirer, or the Company, the Company will agree to: 1) continue to pay your base salary for a period of one yearfrom the date of termination; 2) pay you an amount equal to the average of the annual bonus that you earned over the prior three years; 3) pay for the Company’s portion of your health care costs under COBRA for one year; and 4) vest and accelerate exercisability of any outstanding stock options granted to you. In the event that you are offered a comparable position following a Change in Control, or you accept, in your sole discretion, employment in any other capacity offered by the acquirer of the Company, the Company will vest and accelerate exercisability of your outstanding stock options one (1) year after the Change in Control, provided you are still working for the Company or the acquirer at that time. The mechanics of such vesting will be determined based on the structure of the Change in Control transaction. For the purposes of this offer letter, “Change in Control” shall have the meaning set forth in Section 2.4 of the Company's 2004 Equity Incentive Plan.

In the event that your employment is terminated by the Company during or upon the completion of the first year of your employment for reasons other than “cause,” you will agree to resign from the Board of Directors and will receive severance payments equal to your regular base salary for a period of six (6) months (payable in the same manner as your base salary) and any options that would have vested upon the completion of your initial year of employment will be immediately vested and become exercisable on the last day of your employment. For purposes of this offer letter, “cause” shall mean any act or omission included within the definition of “misconduct” as set forth in the Company’s 2004 Equity Incentive Plan.

In connection with this offer of employment, you agree to sign the Company’s standard non-disclosure and non-solicitation agreement at the time of your acceptance of this offer, which is attached.

I look forward to you joining Neoware and to your contributions to the Company’s success. Please feel free to contact with any questions.

Very truly yours,

/s/ Michael Kantrowitz

Michael Kantrowitz

Chairman and CEO

Neoware, Inc.

Accepted:

/s/ Klaus Besier

Klaus Besier

Date: July 12, 2006

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Neoware Names Former SAP Executive Klaus Besier President

KING OF PRUSSIA, Pa., July 13, 2006 – Neoware, Inc. (Nasdaq:NWRE), the leading supplier of thin client software and devices, today named Klaus Besier as president, reporting to Michael Kantrowitz, the Company’s chairman and CEO.

     Besier, a member of Neoware’s board of directors, had been president and chief executive officer of SAP America during the 1990s, leading the German software company’s rapid growth in the United States, Canada, Mexico, and Australia. During his tenure at SAP, the company’s revenues grew more than tenfold, from $56 million to $710 million.

     “From my experience working with large enterprises and serving on the Neoware board of directors, it’s clear that Neoware has a very significant opportunity, with more and more companies adopting thin client software and devices for the security, cost and manageability benefits they provide,” said Besier. “The challenges and opportunities for thin client computing are similar to those that I dealt with at SAP when enterprise application software was just beginning to take off. The benefits of Neoware’s thin client solutions are considerable and demand is growing rapidly, but there’s still a need to educate customers and then to develop operating processes to fulfill this growing demand profitably.”

     Besier was president and chief executive officer of FirePond, a global provider of e-business solutions for managing multi-channel selling, until the company was sold in 2003. From 1991 to 1996 he was president and chief executive officer of SAP America, a provider of business application software. Before joining SAP, Besier was general manager and corporate vice president of a subsidiary of Hoechst Celanese, a global chemicals and fiber conglomerate. He holds a bachelor's degree in business management and finance from the University of Economics in Berlin.

     “Neoware has grown revenues from $10 million to over $100 million, and now we are positioning ourselves for our next phase of growth,” commented Michael Kantrowitz, Neoware’s chairman and CEO. “Having worked closely with Klaus on the Neoware board, I am confident that he can help Neoware strategically and operationally, particularly as we expand our business globally. Neoware will benefit from Klaus’s experience in building a global organization, and from his in-depth software industry knowledge. We’re very pleased that we are able to attract an individual of Klaus’s caliber to help us capitalize on the opportunities in our market.”

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About Neoware

Neoware, Inc. (NasdaqNM:NWRE), provides enterprises throughout the world with thin client computing devices, software that turns PCs into thin clients, and services that adapt thin client technology to virtually any enterprise computing environment. Neoware’s software powers, manages and secures thin client devices and traditional personal computers, enabling them to run Windows^® and Web applications across a network, stream operating systems on demand, and connect to mainframes, mid-range, UNIX and Linux systems. Headquartered in King of Prussia, PA, USA, Neoware has offices in Australia, Austria, China, France, Germany, and the United Kingdom. Neoware’s products are available worldwide from select, knowledgeable resellers, as well as via its partnerships with IBM, Lenovo and ClearCube. Neoware can be reached by email at info@neoware.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding: the significant opportunity for Neoware; the increasing adoption of thin client software and devices; the rapidly growing demand for thin client solutions; our being positioned for the next phase of our growth; Mr. Besier’s ability to help us strategically and operationally; and the benefit to us from Mr. Besier’s experience as we expand globally. Factors that could cause actual results to differ materially from those predicted in such forward-looking statements include: our ability to retain Mr. Besier; our inability to manage our expanded organization; our inability to successfully integrate our recent acquisitions; the timing and receipt of future orders; our timely development and customers' acceptance of our products; pricing pressures; rapid technological changes in the industry; growth of overall thin client sales through the capture of a greater portion of the PC market, including sales to large enterprise customers; our ability to maintain our partnerships; our dependence on our suppliers and distributors; increased competition; our continued ability to sell our products through Lenovo to IBM's customers; our ability to attract and retain qualified personnel, including the former employees of the businesses we acquired; adverse changes in customer order patterns; our ability to identify and successfully consummate and integrate future acquisitions; adverse changes in general economic conditions in the U. S. and internationally; risks associated with foreign operations; and political and economic uncertainties associated with current world events. These and other risks are detailed from time to time in Neoware's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, our annual report on Form 10-K for the year ended June 30, 2005 and our quarterly reports on Forms 10-Q for the quarters ended September 30, 2005; December 31, 2005 and March 31, 2006.

Neoware is a trademark of Neoware, Inc. All other names, products and services are trademarks or registered trademarks of their respective holders.

Contact: Neoware, Inc.
Baker Egerton
(610) 277-8300 x1742
baker.egerton@neoware.com