Systemax Inc.
11 Harbor Park Drive
Port Washington, New York 11050

_________________

PROXY STATEMENT

_________________

Introduction

          This proxy statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors of Systemax Inc., a Delaware corporation (the "Company"), for the 20052006 Annual Meeting of Stockholders of the Company to be held on December 29, 2005. It replaces the proxy statement previously distributed under cover of a notice dated May 2, 2005.October 11, 2006. The Notice of Annual Meeting, this proxy statement, and the accompanying proxy and the annual report of the Company for the year ended December 31, 2005 are first being mailed on or about December 13, 2005September 15, 2006 to stockholders of record as of the close of business on December 8, 2005.August 25, 2006. You can ensure that your shares are voted at the meeting by signing, dating and promptly returning the enclosed proxy in the envelope provided. Sending in a signed proxy will not affect your right to attend the meeting and vote in person. You may revoke your proxy at any time before it is voted by notifying the Company's Transfer Agent, American Stock Transfer & Trust Company, 59 Maiden Lane, New York, NY 10038 Attention: Proxy Department, in writing, or by executing a subsequent proxy, which revokes your previously executed proxy. The Company's principal executive offices are located at 11 Harbor Park Drive, Port Washington, New York 11050.

Voting of Proxies

          Proxies will be voted as specified by the stockholders. Where specific choices are not indicated, proxies will be voted for proposals 1, 2 and 3. Under the Delaware General Corporation Law and the Company's Amended and Restated Certificate of Incorporation and the Company's By-Laws, (1) the affirmative vote of a pluralitymajority of the outstanding shares of Common Stock entitled to vote and present, in person or by properly executed proxy, at a meeting at which a quorum is present will be required (1) to elect the nominated Directors (Proposal 1) and, (2) the affirmative vote of the holders of at least a majority of the shares of Common Stock entitled to vote and present, in person or by properly executed proxy, at a meeting at which a quorum is present will be required in order to (a) approve the RestrictedCompany's 2006 Stock Agreement, dated October 12, 2004, between the Company and Gilbert FiorentinoIncentive Plan for Non-Employee Directors (Proposal 2) and (b) approve(3) to ratify the appointment of Ernst & Young LLP as the Company's 2005 Employee Stock Purchase Planindependent registered public accountants (Proposal 3).

          A quorum is representation in person or by proxy at the Annual Meeting of at least a majority of the outstanding shares of common stock of the Company. Abstentions will be treated as votes cast on particular matters as well as shares present and represented for purposes of establishing a quorum, with the result that an abstention has the same effect as a negative vote. Where nominee record holders do not vote on specific issues because they did not receive specific instructions on such issues from the beneficial owners, such broker non-votes will not be treated as votes cast on a particular matter, and will therefore have no effect on the vote, but will be treated as shares present or represented for purposes of establishing a quorum.

          If shares are held through a broker, nominee, fiduciary or other custodian, you must provide voting instructions to the record holder in accordance with the record holder's requirements in order to ensure the shares are properly voted. Under the rules of the New York Stock Exchange, member brokers who do not receive instructions from beneficial owners will be allowed to vote on the election of Directors and on the ratification of the independent accountants but not on the proposed approval of the RestrictedCompany's 2006 Stock Agreement and the 2005 Employee Stock Purchase Plan.Incentive Plan for Non-Employee Directors. If you want your shares to be voted on these issues, you must instruct your broker if your shares are held in street name.

          A list of stockholders of the Company satisfying the requirements of Section 219 of the Delaware General Corporation Law shall be available for inspection for any purpose germane to the meeting during normal business hours at the offices of the Company at least ten days prior to the Annual Meeting.

          On December 8, 2005,August 25, 2006, there were outstanding and entitled to vote 34,713,88235,021,391 shares of common stock of the Company entitled to one vote per share. Stockholders will not be entitled to appraisal rights in connection with any of the matters to be voted on at the Annual Meeting.

1.     Election of Directors

          At the meeting, seven Directors are to be elected to serve until their successors have been elected and qualified. Information regarding such nominees is set forth below.

          The accompanying proxy will be voted for the election of the Board's nominees unless contrary instructions are given. If any Board nominee is unable to serve, which is not anticipated, the persons named as proxies intend to vote for the other Board nominees and, unless the number of nominees is reduced by the Board of Directors, for such other person or persons as the Board of Directors may designate.

          Each of the nominees has served as a director during the fiscal year ended December 31, 2004.2005. If voting by proxy with respect to the election of directors,Directors, stockholders may vote in favor of all nominees, withhold their votes as to all nominees or withhold their votes for specific nominees.

Nominees

          Richard Leeds, age 46, has served as Chairman and Chief Executive Officer of the Company since April 1995. From April 1995 to February 1996 Mr. Leeds also served as Chief Financial Officer of the Company. Mr. Leeds joined the Company in 1982 and since 1984 has served in various executive capacities. Mr. Leeds graduated from New York University in 1982 with a B.S. in Finance. Richard Leeds is the brother of Bruce and Robert Leeds.

          Bruce Leeds, age 51, has served as Vice Chairman since April 1995. Mr. Leeds served as President of International Operations from 1990 until March 2005. Mr. Leeds joined the Company after graduating from Tufts University in 1977 with a B.A. in Economics and since 1982 has served in various executive capacities.

          Robert Leeds, age 51, has served as Vice Chairman since April 1995. Mr. Leeds served as President of Domestic Operations from April 1995 until March 2005. Since 1982 Mr. Leeds has served in various executive capacities with the Company. Mr. Leeds graduated from Tufts University in 1977 with a B.S. in Computer Applications Engineering and joined the Company in the same year.

          Gilbert Fiorentino, age 46, has served as a Director of the Company since May 25, 2004. Mr. Fiorentino is President and Chief Executive Officer of Tiger Direct, Inc., a company he founded in 1988. Tiger Direct became a wholly owned subsidiary of the Company in 1996. Mr. Fiorentino graduated with honors in 1981 from the University of Miami with a BS degree in Economics and graduated in 1984 from the University of Miami Law School. He was an adjunct professor of Business Law at the University of Miami from 1985 through 1994.

          Robert D. Rosenthal, age 57, has served as a Director of the Company since July 1995. Mr. Rosenthal is Chairman and Chief Executive Officer of First Long Island Investors Inc.,LLC, which he co-founded in 1983. From July 1971 until September 1983, Mr. Rosenthal held increasingly responsible positions at Entenmann's Inc., eventually becoming Executive Vice President and Chief Operating Officer. Mr. Rosenthal is a 1971cum laude graduate of Boston University and a 1974 graduate of Hofstra University Law School.

          Stacy S. Dick, age 49, has served as a Director of the Company since November 1995. Mr. Dick became a Managing Director of Rothschild Inc. in January 2004 and since March 2001, has also served as Chief Executive Officeran executive of Continuation Investments NV, another entityother entities controlled by Rothschild family interests.interests since March 2001. From August 1998 to March 2001, Mr. Dick was a principal of Evercore Partners, an investment banking firm. From 19921996 until July 1998, Mr. Dick held increasingly responsible positions at Tenneco Inc., eventually becomingwas Executive Vice President of Tenneco Inc. Prior to joining Tenneco Inc. he was a Managing Director of The First Boston Corporation, a position he held beginning in 1989. Mr. Dick graduated from Harvard University with an AB degreemagna cum laude in 1978 and received a Ph.D. in Business Economics from Harvard in 1983. He has served as an adjunct professor of finance at the Stern School of Business (NYU) since 2004.

          Ann R. Leven, age 65, has served as a Director of the Company since May 2001. Ms. Leven served as Treasurer and Chief Fiscal Officer of the National Gallery of Art in Washington D.C. from December 1990 to October 1999. From August 1984 to December 1990 she was Chief Financial Officer of the Smithsonian Institution. Ms. Leven has been a Director of the Delaware Investment's Family of Mutual Funds since September 1989. From December 1999 to May 2003 Ms. Leven was a Director of Recoton Corporation. From 1975 to 1993 Ms. Leven taught business strategy and administration at the Columbia University Graduate School of Business. She received an M.B.A. degree from Harvard University in 1964.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF ALL THE DIRECTOR NOMINEES, WHICH IS DESIGNATEDASDESIGNATED AS PROPOSAL NO. 1 ON THE ENCLOSED PROXY CARD.

Independence of Directors

          In the judgment of the Board of Directors, each of the following Directors of the Company meets the standards for independence required by the New York Stock Exchange and the Securities Exchange Act of 1934: Robert D. Rosenthal, Stacy S. Dick and Ann R. Leven. The Board made this determination based on (a) the absence of any of the express disqualifying criteria relating to director independence set forth in Section 303A of the Corporate Governance Rules of the New York Stock Exchange and (b) the criteria for independence required of audit committee directors by Section 10A(m)(3) of Securities Exchange Act of 1934. As a "controlled company", the Company is exempt from the New York Stock Exchange requirements (a) that listed companies have a majority of independent directors, and (b) that the members of the Compensation and Nominating/Corporate Governance Committees of listed companies be composed entirely of independent directors. A "controlled company" is defined by the New York Stock Exchange as a company of which more than 50% of the voting power is held by an individual, group or other company. The Company is a "controlled company" in that more than 50% of the voting stock of the Company, in the aggregate, is owned by certain members of the Leeds family (including Richard Leeds, Robert Leeds and Bruce Leeds, each of whom is an officer and Director of the Company) and certain Leeds' family trusts (collectively, the "Leeds Group"). The Leeds Group has entered into a Stockholders Agreement with respect to certain shares of Company stock it owns. See "Certain Relationships and Related Transactions" below.

Corporate Ethics Policy

          The Company has adopted a Corporate Ethics Policy (revised as of March 30, 2005) that applies to all employees of the Company including the Company's Chief Executive Officer, Chief Financial Officer and Controller, its principal accounting officer. The Corporate Ethics Policy is designed to deter wrongdoing and to promote honest and ethical conduct, compliance with applicable laws and regulations, full and accurate disclosure of information requiring public disclosure and the prompt reporting of Policy violations. The Company's Corporate Ethics Policy (as amended), annexed as an exhibit to the Company's report on Form 8-K datedlast amended March 30, 2005,2005) is available on the Company's website ((www.systemax.com)www.systemax.com) and. A copy can also be obtained by writing to Systemax Inc., Attention: Board of Directors (Corporate Governance), 11 Harbor Park Drive, Port Washington, NY 11050.

Stockholder Communications with Directors

          Stockholders of the Company who wish to communicate with the Board or any individual Director can write to Systemax Inc., Attention: Investor Relations, 11 Harbor Park Drive, Port Washington, NY 11050. Your letter should indicate that you are a stockholder of the Company. Depending on the subject matter of your inquiry, management will forward the communication to the Director or Directors to whom it is addressed; attempt to handle the inquiry directly, as might be the case if you request information about the Company or it is a stockholder related matter; or not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.

At each Board meeting, a member of management presents a summary of all communications received since the last meeting that were not forwarded and makemakes those communications available to any requesting Director.

Director Attendance at Annual Meetings

          The Company expects each Director to attend its Annual Stockholders Meeting, unless he or she has a valid excuse such as illness or a conflict in schedules. The Company usually schedules a separate Board meeting in conjunction with the Stockholders meeting, to elect officers and discuss other Company matters. Last year, because the Annual Meeting, originally scheduled for May 24, 2005, had to be rescheduled to December 29, 2005, only one of the Company's Directors was able to attend the meeting. The Company expects all of theits Directors attended theto attend this year's Annual Stockholders Meeting.

Board Meetings

          During the year 20042005 the Board of Directors held fourtwo meetings, the Audit Committee held ten15 meetings, the Compensation Committee held two meetings, the Nominating/Corporate Governance Committee held one meeting and the Executive Committee held one meeting.no meetings. All of the Directors attended at least 75% of all of the meetings of the Board and the respective committees of the Board of which they were members.

Settlement of Shareholder Derivative Suits/Corporate Governance Changes

          On May 16, 2006, the Company, its directors and Chief Financial Officer entered into a stipulation of settlement with all of the plaintiffs who had filed federal and state court derivative complaints in 2005 alleging misconduct in connection with the Company's restatement of its 2004 financial results. By order dated July 6, 2006 the United States District Court for the Eastern District of New York approved the settlement and dismissed the federal complaint with prejudice. Pursuant to such settlement the Company has adopted certain changes to its corporate governance policies. As part of the settlement, the Company paid $300,000 for the plaintiffs' legal fees.

          This settlement resulted in a release of all claims against the defendants and the dismissal with prejudice of the derivative complaint filed on May 25, 2005 in federal district court and derivative complaints filed on June 3, 2005 and June 6, 2005 in New York state court. The plaintiffs were directed by the U.S. District Court to move to dismiss the state court actions.

          The governance changes detailed in the settlement agreement include the following:

          The Company's by-laws, committee charters and Corporate Governance Principles and Guidelines were amended in August 2006 to effect the terms of the settlement agreement.

Committees of the Board

          The Board of Directors has the following standing committees:

          Audit Committee

          The Audit Committee is appointed by the Board of Directors to assist the Board with oversight of (i) the integrity of the financial statements of the Company, (ii) the Company's compliance with legal and regulatoryrequirements, (iii) the independence and qualifications of the Company's external auditors, and (iv) the performance of the Company's internal audit function and external auditors. It is the Audit Committee's responsibility to retain or terminate the external auditors and to prepare the Audit Committee report that the Securities and Exchange Commission requires to be included in the Company's Annual Proxy Statement. (See "Report of the Audit Committee" below.) As part of its activities, the Audit Committee meets with the Company's external auditors at least annually to review the scope and results of the annual audit and quarterly to discuss the review of the quarterly financial results. In addition, the Audit Committee receives and considers the external auditors' comments and recommendations as to internal controls, accounting staff, management performance and auditing procedures. The Audit Committee is also responsible for establishing procedures for (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls and auditing matters and (ii) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

          The Board of Directors adopted an Audit Committee Charter in June 2000 and a Revised Audit Committee Charter in February 2003. The rulesAudit Committee Charter was revised again in August 2006 as required by the terms of the Securities and Exchange Commission require that the Company attach a copyStipulation of such charterSettlement relating to the proxy statement at least once every three years.shareholder derivative suits filed in 2005. A copy of the Revised Audit Committee Charter was annexed to the Company's Proxy Statement for the 2003 Annual Meeting of Stockholders and is available on the Company's website,www.systemax.com. , or can be obtained by writing to Systemax Inc., Attention: Board of Directors (Corporate Governance), 11 Harbor Park Drive, Port Washington, NY 11050.

          The members of the Committee are Stacy S. Dick, Robert D. Rosenthal and Ann R. Leven. Mr. Dick is the current Chairman of the Committee. All the members of the Audit Committee are non-management directors (i.e. they are neither officers nor employees of the Company). The Committee meets regularly both with and without management participation.In the judgment of the Board of Directors, each of the members of the Audit Committee meets the standards for independence required by the rules of the Securities and Exchange Commission and New York Stock Exchange. In addition, the Board of Directors has determined that each of the members of the Audit Committee is an "audit committee financial expert" as defined by regulations of the Securities and Exchange Commission.

Interested parties who wishwishing to communicate directly with the Chairman of the Audit Committee or the Audit Committee as a group can writeshould address their inquires by mail to Systemax Inc., Attention:the attention of Audit Committee at the Company's principal executive office located at 11 Harbor Park Drive, Port Washington, NY 11050. All communications will be promptly relayed to the appropriate recipient(s).

          Nominating/Corporate Governance CommitteeMeetings of Non-Management Directors

          In February 2003,          The New York Stock Exchange requires the "non-management directors" of a NYSE-listed company to meet at regularly scheduled executive sessions without management and to disclose in their annual proxy statements (1) the name of the non-management director who is chosen to preside at all regularly-scheduled executive sessions of the non-management members of the board of directors and (2) a method for interested parties to communicate directly with the presiding director or with the non-management directors as a group.

As all of the non-management members of the Board of Directors formed(all of whom are independent) constitute the Audit Committee, such executive sessions were previously held as part of regularly scheduled meetings of the Audit Committee chaired by the Audit Committee chairman. As described at "Settlement of Shareholder Derivative Suits/Corporate Governance Changes" above, the Company has agreed that the Board's independent directors shall meet separately in executive sessions, chaired by the Lead Independent Director, at least quarterly.

          Interested parties wishing to communicate directly with the Lead Independent Director or the non-management members of the Board of Directors as a group should address their inquires by mail sent to the attention of Robert Rosenthal, Lead Independent Director at the Company's principal executive office located at 11 Harbor Park Drive, Port Washington, NY 11050. All communications will be promptly relayed to the appropriate recipient(s).

Nominating/Corporate Governance Committee.Committee

          The Nominating/Corporate Governance Committee's responsibilities of the committee include, among other things (i) identifying individuals qualified to become Board members and recommending to the Board nominees to stand for election at any meeting of stockholders, (ii) identifying and recommending nominees to fill any vacancy, however created, in the Board, (iii) developing and recommending to the Board a code of business conduct and ethics and a set of corporate governance principles (including director qualification standards, responsibilities and compensation) and periodically reviewing the code and principles. The current members of the Nominating/Corporate Governance Committee are Messrs. Richard Leeds (Chairman), Rosenthal and Dick and Ms. Leven. (As described in "Settlement of Shareholder Derivative Suits/Corporate Governance Changes," Mr. Leeds will be resigning from the committee by the end of 2006.) In nominating candidates to become Board members, the Committee shall take into consideration such factors as it deems appropriate, including the experience, skill, integrity and background of the candidates. The Committee may consider candidates proposed by management or stockholders but is not required to do so. The Committee does not have any formal policy with regard to the consideration of any Director candidates recommended by the security holders or any minimum qualifications or specific procedure for identifying and evaluating nominees for Director as the Board does not believe that such a formalistic approach is necessary or appropriate at this time. Stockholders and other Company security holders may propose candidates for Board membership by writing to Systemax Inc., Attention: Nominating/Corporate Governance Committee, 11 Harbor Park Drive, Port Washington, NY 11050 so that the nomination is received by the Company by March 31, 20052007 to be considered for the 20062007 Annual Meeting. Nominees proposed by stockholders will receive the same consideration as will other nominees. The Charter for the Nominating/Corporate Governance Committee was amended in August 2006 to comply with the terms of the Stipulation of Settlement relating to the shareholder derivative suits filed in 2005.The Charter for the Nominating/Corporate Governance Committee is available on the Company's website (www.systemax.com) or can be obtained by writing to Systemax Inc., Attention: Board of Directors (Corporate Governance), 11 Harbor Park Drive, Port Washington, NY 11050.

          Compensation Committee

          The Compensation Committee's responsibility is to review and approve corporate goals relevant to the compensation of the Chief Executive Officer and, after an evaluation of the Chief Executive Officer's performance in light of such goals, to set the compensation of the Chief Executive Officer. The Compensation Committee also approves (a) the annual compensation of the other executive officers of the Company, (b) the annual compensation of certain subsidiary managers, and (c) all individual stock-based incentive grants. Stock incentive grants to persons subject to Section 16 of the Securities Exchange Act of 1934 (primarily executive officers, Directors and 10% stockholders) must also be approved by a subcommittee consisting solely of two or more non-employee Directors or the full Board of Directors. The Committee is also responsible for reviewing and making periodic recommendations to the Board with respect to the general compensation, benefits and perquisite policies and practices of the Company including the Company's incentive-based and equity-based compensation plans. The Compensation Committee also prepares an annual report on executive compensation for inclusion in the Annual Proxy Statement.annual proxy statement. (See "Compensation Committee Report to Stockholder" below.) The charter for the Compensation Committee was amended in August 2006 to comply with the terms of the Stipulation of Settlement relating to the shareholder derivative suits filed in 2005. The charter for the Compensation Committee is available on the Company's website (www.systemax.com) or can be obtained by writing to Systemax Inc., Attention: Board of Directors (Corporate Governance), 11 Harbor Park Drive, Port Washington, NY 11050. The current members of the Compensation Committee are Messrs. Robert Leeds (Chairman), Rosenthal and Dick. (As described in "Settlement of Shareholder Derivative Suits/Corporate Governance Changes," Mr. Leeds will be resigning from the committee by the end of 2006.)

Executive Committee

          The Board of Directors formed an Executive Committee on March 2, 2004 consistingconsists of the Chairman of the Board and any Vice Chairman and such other directors as may be named thereto by the Board of Directors. The current members of the Executive Committee are Messrs. Richard Leeds, Robert Leeds, Bruce Leeds and Bruce Leeds.Robert Rosenthal (the recently elected Lead Independent Director). Among other duties (asas may be assigned by the Board from time to time),time, the Executive Committee is authorized to oversee the operations of the Company, supervise the executive officers of the Company, review and make recommendations to the Board of Directors regarding the strategic direction of the Company and review and make recommendations to the Board of Directors regarding all possible acquisitions or other significant business transactions. It is also authorized to manage the affairs of the Corporation between meetings of the Board of Directors and the Committee has all of the powers of the Board of Directors not inconsistent with any provisions of the Delaware General Corporation Law, the Company's By-Laws or other resolutions adopted by the Board but does not generally exercise such authority.

Compensation of Directors

          The Company's policy is not to pay compensation to Directors who are also employees of the Company. Each non-employee Director is currently paid a fee of $25,000 per year and $2,000 for each meeting of the Board of Directors and each committee meeting in which the Director participates. In addition, the Chairman of the Audit Committee of the Board receives an additional $5,000 per year. The non-employee Directors of the Company also currently receive,received annually, following the annual stockholders meeting, an option to purchase 2,000 shares of Common Stock pursuant to the Company's 1995 Stock Option Plan for Non-Employee Directors. During 2004, Mr. Dick, Mr. Rosenthal and Ms. Leven each receivedThe options to purchase 2,000 shares of Common Stock pursuant to this plan.plan for 2005 were received by each of the non-employee Directors in early 2006 as a result of the postponement of the 2005 Annual Meeting of Shareholders until the end of December 2005.

          The Company plans to increase the compensation paid to non-employee directors effective as of the date immediately following the 2006 Annual Stockholders' Meeting such that each non-employee director will receive annual compensation as follows: $50,000 per year as base compensation, $5,000 per year for each committee of which such director is a non-chair member, $10,000 per year for each committee chair, and a grant each year of shares of Company stock (restricted for sale for two years) in an amount equal to $25,000 divided by the fair market value of such stock on the date of grant. In addition the Company plans to grant to each non-employee director a one-time stock option for 5,000 shares of Company stock. The restricted stock and stock option grants will be subject to stockholder approval of the Company's 2006 Stock Incentive Plan for Non-Employee Directors, annexed as Annex A hereto, at the 2006 Annual Stockholders' Meeting. A summary of this plan is set forth below as Proposal 2.

REPORT OF THE AUDIT COMMITTEE *

          The Audit Committee of the Board of Directors of the Company operates under its charter, which was originally adopted by the Board of Directors in 2000 and revised in February 2003.2003 and August 2006. Management is responsible for the Company's internal accounting and financial controls, the financial reporting process, the internal audit function and compliance with the Company's policies and legal requirements. The Company's independent auditorsregistered public accountants are responsible for performing an independent audit of the Company's consolidated financial statements in accordance with generally accepted auditing standards and for issuance of a report thereon; they also perform limited reviews of the Company's unaudited quarterly financial statements.

          The Audit Committee's responsibility is to engage the independent auditors,registered public accountants, monitor and oversee these accounting, financial and audit processes and report its findings to the full board. It also investigates matters related to the Company's financial statements and controls as it deems appropriate. In the performance of theirthese oversight functions, the members of the Audit Committee rely upon the information, opinions, reports and statements presented to them by Company management and by the independent auditors, as well as by other experts that the Committee hires. The Committee is currently in the process of reviewing accountants to replace Deloitte & Touche LLP as the Company's independent auditors, which resigned in November 2005.

          The Committee reviewed and discussed the audited financial statements of the Company for the year ended December 31, 20042005 with representatives of management, in both their original and amended forms, who represented that the Company's consolidated financial statements for fiscal 20042005 were prepared in accordance with generally accepted accounting principles. It also discussed with DeloitteErnst & ToucheYoung LLP, the Company's independent registered public accountants for fiscal 2004,2005, those matters required to be reviewed pursuant to Statement of Accounting Standards No. 61 ("Communication with Audit Committees"). The Committee has also received from DeloitteErnst & Touche LLPYoung written independence disclosures and the letter required by Independence Standards Board Standard No. 1 ("Independence Discussions with Audit Committees") and had a discussion with them regarding their independence.

          Based on the review of the representations of management, the discussions with management and the independent accountants and the review of the report of the independent accountants to the Committee, the Audit Committee recommended to the Board of Directors that the financial statements of the Company for the year ended December 31, 20042005 as audited by Deloitte & ToucheErnst &Young LLP be included in the Company's Annual Report on Form 10-K as amended by Form 10-K/A (amendment no. 1) filed with the Securities and Exchange Commission.

       Name                      Age          Office
       ----                      ---          ------

       Richard Leeds              45          Chairman and Chief Executive Officer; Director

       Bruce Leeds                50          Vice Chairman; Director

       Robert Leeds               50          Vice Chairman; Director

       Steven M. Goldschein       59          Senior Vice President and Chief Financial Officer

       Gilbert Fiorentino         45          President and Chief Executive Officer of Tiger
                                              Direct, Inc.; Director

       Michael J. Speiller        51          Vice President and Controller

       Curt S. Rush               51          General Counsel and Secretary

                                                   Amount and Nature of
       Director and Executive Officers             Beneficial Ownership       Percent of Class
       -------------------------------             --------------------       ----------------
       Richard Leeds(2)                                   10,503,236               30. 3%

       Bruce Leeds(3)                                     15,320,096               44.1%

       Robert Leeds(4)                                     2,010,212                5.8%

       Gilbert Fiorentino(5)                                 235,000                0.7%

       Stacy S. Dick(6)                                       12,500                 *

       Robert D. Rosenthal(7)                                 37,000                 *

       Ann R. Leven(8)                                         7,000                 *

       Steven M. Goldschein(9)                               142,667                 *

       All current  Directors and executive  officers
       of the Company (10 persons)                        25,057,494                72.2%

       __________________________
       * less than 1%

Summary Compensation Table


                                                                                                         Long-term
                                                                     Annual Compensation                 Compensation
                                                           -----------------------------------------     -------------

                                                                                                         Securities
                                                                                       Other Annual      Underlying
         Name and Principal Position             Year            Salary    Bonus    Compensation (1)     Options (#)
         ---------------------------             ----            ------    -----    ----------------     -----------

Richard Leeds                                    2004           $403,348   $250,000            $2,796       None
Chairman and Chief Executive Officer             2003            378,101     75,000             2,867       None
                                                 2002            367,500     75,000             2,720       None

Bruce Leeds                                      2004            403,348     -                  9,917       None
Vice Chairman and President of                   2003            378,101     75,000             2,398       None
 International Operations                        2002            367,500     75,000             2,377       None

Robert Leeds                                     2004            403,348     -                  2,328       None
Vice Chairman and President of                   2003            378,101     75,000             2,340       None
 Domestic Operations                             2002            367,500     75,000             2,340       None

Gilbert Fiorentino                               2004            400,000    250,000             8,050     166,667
President and CEO of                             2003            -           -                     -         -
 Tiger Direct, Inc. (2)                          2002            -           -                     -         -

Steven M. Goldschein                             2004            396,193     40,000             1,999       None
Senior Vice President and Chief                  2003            371,157     30,000             2,527      40,000
 Financial Officer                               2002            357,666     20,000             2,573      37,500

Option Grants in Last Fiscal Year

                                                  Individual Grants
                              ---------------------------------------------------------
                                               Percent
          No options were granted in 2005 to any of Potential Realizable
                              Number of          Total                                           Value at
                             Securities         Options                                       Assumed Annual
                             Underlying        Granted to    Exercise or                      Rates of Stock
                               Options         Employees     Base Price    Expiration       Price Appreciation
                             Granted (#)       In Fiscal      ($/Share)       Date            For Option Term
           Name              ----------           Year       -----------   -----------        5%($)   10%($)
           ----                                                                               -----   ------

  Richard Leeds                  --                --             --            --           --           --

  Bruce Leeds                    --                --             --            --           --           --

  Robert Leeds                   --                --             --            --           --           --

  Gilbert Fiorentino           166,667           21.4%          $5.65       10/11/2014    $592,000    $1,501,000

  Steven M.                      --                --             --            --            --          --

  Goldschein

the Named Executive Officers
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values

                                                            Number of
                                                            Securities           Value of
                                                            Underlying          Unexercised
                                                           Unexercised         In-the-Money
                                Shares                      Options at          Options at
                               Acquired                 December 31, 2004    December 31, 2004
                                  on         Value       (#)Exercisable/       Exercisable/
   Name                      Exercise(#)   Realized($)    Unexercisable        Unexercisable
   ----                      -----------   -----------  -----------------     --------------

   Richard Leeds                  -            -                -                    -

   Bruce Leeds                    -            -                -                    -

   Robert Leeds                   -            -                -                    -

   Gilbert Fiorentino             -            -          223,292/466,041    $430,000/$68,000

   Steven  M. Goldschein          -            -          118,958/36,042     $314,000/$51,000

The following table sets forth certain information regarding option exercises and year-end option values for the Named Executive Officers:

Compensation Committee Report to Stockholders^*

          The Compensation Committee's responsibility is to review and approve corporate goals relevant to the compensation of the Chief Executive Officer and, after an evaluation of the Chief Executive Officer's performance in light of such goals, to set the compensation of the Chief Executive Officer. The Compensation Committee or a subcommittee thereof also approves (a) the annual compensation of the other executive officers of the Company, (b) the annual compensation of certain subsidiary managers, and (c) all individual stock incentive grants. The Committee is also responsible for reviewing and making periodic recommendations to the Board with respect to the general compensation, benefits and perquisite policies and practices of the Company including the Company's incentive-based and equity-based compensation plans.

          In establishing compensation and benefit levels for executive officers, the Committee seeks to (1) attract and retain individuals of superior ability and managerial talent, (2) motivate executive officers to increase Company performance primarily for the benefit of its stockholders but also for the benefit of its customers and other constituencies and (3) reward executives for superior individual contributions to the achievement of the Company's business objectives. To these ends, the Company's executive compensation package may consist of a base salary, annual cash bonus compensation and stock-based long-term incentive awards.

          Salary levels generally are determined based on the Committee's subjective assessment of prevailing levels among the Company's competitors. At higher levels, however, individual and Company performance will be given greater weight, along with competitive considerations.

          In establishing annual bonuses, the Committee considers such factors relating to the Company's overall performance as it, in its discretion, deems appropriate and assigns such weight to each such factor, as it deems appropriate. The Committee may also consider its assessment of each individual's contribution to the improvement of operating results, growth, profitability and efficient operation of the Company.

          Stock-based incentives, at the present time consisting of (a) stock options granted at 100% or more of the stock's fair market value on the grant date and/or (b) restricted stock units granted subject to certain performance conditions, constitute the long-term portion of the Company's executive compensation package. Stock options provide an incentive for executives to increase the Company's stock price and, therefore, the return to the Company's stockholders. The vesting of certain executive stock options may be accelerated based upon the achievement of certain financial objectives by certain divisions of the Company. The number and timing of stock option grants are decided by the Committee based on its subjective assessment, with the advice of independent consultants, of prevailing levels of similar compensation among the Company's competitors. Stock option and restricted stock unit grants to officers and Directors must be approved by the Board of Directors. The Compensation

          In determining the compensation of Company's executive officers, including the Chief Executive Officer, for the year 2005 the Committee has also recommendedconsidered, among other factors, the establishment of an employee stock purchase plan (the terms of which are described elsewhereincrease in this proxy statement) for which stockholder approval is being sought. In addition, a subcommittee (composed solely of non-employee members)Company revenues from the prior year (9.7%), the increase in income from operations from the prior year (83.2%) and the successful restructuring of the CompensationCompany's European Operations. The Committee approvedalso considered the Restricted Stock Agreement betweenneed to restate the CompanyCompany's 2004 financial statements and Gilbert Fiorentino (the termspreviously disclosed material weaknesses in the Company's internal controls over financial reporting as of which are described elsewhere in this proxy statement),December 31, 2005 (see Part II,Item 9A Controls and Procedures inthe Company's Annual Report on Form 10-K for which stockholder approval is also being sought.the fiscal year ended December 31, 2005.)

__________________________________________

^*This report shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.

Compensation Committee Interlocks and Insider Participation

          The members of the Company's Compensation Committee for fiscal year 20042005 were Robert Leeds, Robert D. Rosenthal and Stacy S. Dick. Other than Robert Leeds, no member of the Compensation Committee is employed by the Company. No Director of the Company served during the last completed fiscal year as an executive officer of any entity whose compensation committee (or other comparable committee, or the Board, as appropriate) included an executive officer of the Company. There are no "interlocks" as defined by the Securities and Exchange Commission.

Stock Price Performance Graph^*

          The graph below compares cumulative total return of the Company, the S & P 500 and the S & P Retail Index for the period beginning December 31, 19992000 through December 31, 2004.2005. The stock price performance shown on the graph below is not necessarily indicative of future price performance. The graph and chart assumes that the value of the investment in the Company's Common Stock and for each index was $100 on December 31, 19992000 and reflects reinvestment of dividends and market capitalization weighing.

_______________________________

^* This section shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.

Equity Compensation Plans

          The following table sets forth information as of December 1,31, 2005 regarding the Company's existing compensation plans and individual compensation arrangements pursuant to which its equity securities are authorized for issuance to employees and non-employees (such as Directors, consultants, advisors, vendors, customers, suppliers or lenders) in exchange for consideration in the form of goods or services. In addition, the Company is seeking stockholder approval for a stock purchase plan that is not included in the following table:

                                            (a)                          (b)                          (c)
                                                                                             Number of securities
                                                                                             remaining for future
                                Number of securities to be    Weighted-average exercise      issuance under equity
                                  issued upon exercise of       price of outstanding          compensation plans
                                   outstanding options,        options, warrants and         (excluding securities
        Plan category               warrants and rights                rights               reflected in column (a))
        -------------           ---------------------------   --------------------------    ------------------------

Equity compensation plans
   approved by security
   holders                               3,846,652                      $2.94                      2,223,798

Equity compensation plans not
   approved by security                         -                         -                             -
   holders                              -------------                                            -------------

Total                                    3,846,652                      $2.94                      2,223,798
                                         =========                                                 =========

2.     Proposal to Approve Restrictedthe Company's 2006 Stock Unit Agreement between the Company and Gilbert FiorentinoIncentive Plan For Non-Employee Directors

          On October 12, 2004, following approval by a subcommittee of the Compensation Committee composed solely of non-employee Directors, the Company entered into a Restricted Stock Unit Agreement with Gilbert Fiorentino (the "Restricted Stock Unit Agreement"), the President and Chief Executive Officer of its subsidiary Tiger Direct, Inc. A copy of the Restricted Stock Unit Agreement is annexed as Exhibit A to this proxy statement. The following is a summary of the principal provisions of this Restricted Stock Unit Agreement.

           Pursuant to the Restricted Stock Unit Agreement, Mr. Fiorentino was awarded 1,000,000 restricted stock units, subject, however, to stockholder approval at the 2005 Annual Meeting of Stockholders and to the satisfaction of a condition subsequent of either (a) the Company having positive earnings before interest, taxes, depreciation and amortization ("EBITDA") for the three months ended December 31, 2004 and the EBITDA of all computer divisions in North America for the same three months being not less than 105% of the EBITDA of such divisions for the three months ended December 31, 2003 or (b) the Company having positive EBITDA for calendar 2005. (The conditions set forth in (a) above with respect to the three months ended December 31, 2004 have been satisfied.) Such restricted stock units generally vest at the rate of 20% on May 31, 2005 and 10% per year thereafter on April 1 of each year until the units are fully vested on April 1, 2013. The restricted stock units do not reflect actual issued shares of Systemax common stock; shares are only to be distributed to Mr. Fiorentino within 30 days after a Distribution Event. A Distribution Event is defined as the earliest of the date that Mr. Fiorentino is no longer employed by the Company or Tiger Direct, the date of a change of control (as defined) or January 1,August 29, 2006, for the units that vest in 2005 or the date on which any subsequent units vest for units that vest after 2005.

          If Mr. Fiorentino is terminated by the Company without cause (as defined in Mr. Fiorentino's employment agreement with the Company), under most circumstances he would become vested in at least half of the restricted stock units that were awarded to him (or all of such units under certain circumstances if a "Qualified Change of Control" had occurred, as defined in the agreement), subject to the Company's right to redeem such units.

Vote Required for Approval

           Approval of the Restricted Stock Unit Agreement will require the affirmative vote of the holders of a majority of the votes cast on this issue. Pursuant to a Voting Agreement and Irrevocable Proxy, dated as of October 12, 2004, between Richard Leeds, Robert Leeds, Bruce Leeds (collectively, the "Shareholders") and the Company, the Shareholders have agreed to vote in favor of the Restricted Stock Unit Agreement and have appointed the Company, and any individual designated in writing by it, as their proxy and attorney-in-fact to vote their shares in favor of the Restricted Stock Unit Agreement.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE TO APPROVE THE RESTRICTED STOCK UNIT AGREEMENT, WHICH IS DESIGNATED AS PROPOSAL NO. 2 ON THE ENCLOSED PROXY CARD.

3. Proposal to Approve the Company's 2005 Employee Stock Purchase Plan

          On March 30, 2005, the Board of Directors approved the terms of the Company's 20052006 Stock PurchaseIncentive Plan For Non-Employee Directors, subject to stockholder approval. A copy of the plan is attached as Exhibit A to this proxy statement. The Company adopted the plan so that it could offer employees (including executive officers)directors of the Company and designated subsidiarieswho are not employees of the Company or of any entity in which the Company has more than a 50% equity interest ("independent directors") an opportunity to participate in the ownership of the Company by purchasingreceiving options to purchase shares of common stock at a discounted price through payroll deductions, andequal to provide an incentive for continued employment. We are asking the stockholders to approvefair market value at the plan so that we can provide this benefit to new and current employees.

          Two million shares have been approved and reserved for this purpose. The shares reserved under the plan have a valuedate of $6.40 per share based on the closing pricegrant of the Company's commonoption and restricted stock as reported on the New York Stock Exchange on December 6, 2005. The plan is intended to constitute an "employee stock purchase plan" within the meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended (the "Code"). The plan will become effective on January 1, 2006 subject to approval by the Company's stockholders.awards.

A copy of the Company's 2005 Employee Stock Purchase Plan is annexed as Exhibit B to this proxy statement.          The following is a summary of the principal provisions of the plan; the following summary is qualified in its entirety by reference to the textplan.

Purposes

          The purposes of the plan:

Summary of Principal Provisions

           ELIGIBILITY. All employeesplan are to promote the interests of the Company and designated subsidiaries who on the first day of an offering period (a) have been an employee for at least one yearits stockholders by (i) attracting and (b) are customarily employed for more than 20 hours a week (other than persons who are deemed under Section 423(b)retaining exceptional directors to serve as independent directors of the Code to own 5% or moreCompany; (ii) increasing the proprietary interest of independent directors in the growth and performance of the Company's voting stock) are eligibleCompany and motivating such directors by means of performance-related incentives to achieve longer-range performance goals; and (iii) enabling such directors to participate in the plan.long-term growth and financial success of the Company.

Types of Awards to be Granted

          The awards under the plan include an automatic grant to each independent director of the Company of 5,000 options on a one-time basis and $25,000 worth of restricted stock on an annual basis.

Options. Effective October 11, 2006, subject to approval of the plan by the stockholders of the Company, each independent director will be granted an option to purchase 5,000 shares of common stock of the Company. Subject to approval of the plan by the stockholders of the Company, each person who first becomes an independent director after October 11, 2006 will be granted, on the date that such person is elected, an option to purchase 5,000 shares.

Restricted Stock. If the plan is approved at this annual stockholders meeting, then immediately following this and each succeeding annual stockholders meeting (but only after the issuance of common stock has been registered with the SEC), each person who is an independent director immediately following such meeting will be granted a restricted stock award with respect to such number of employees potentially eligibleshares (the "restricted shares") as is determined by dividing (i) $25,000, by (ii) the average of the per share closing prices as reported on the principal exchange on which the shares are listed for the date in question (or if there were no sales on such date, on the first date prior thereto on which the shares were so traded) during the 20 trading days preceding the date of such meeting (rounded up to participatethe nearest whole number of shares).

Shares Available Under the Plan

          Subject to adjustment as provided in the plan, is currently approximately 2800 persons.

           ADMINISTRATION. The plan willthe aggregate number of shares of common stock with respect to which awards may be administered by the individual or committee designated by the Board of Directors, which will initially be the Compensation Committee. The plan provides for four "offering periods" each year, commencing on each January 1, April 1, July 1 and October 1 and continuing through the end of the calendar quarter. The first offering period will commence on January 1, 2006. Eligible employees may elect to become participants in the plan by enrolling prior to each quarterly offering period. Shares are purchased through the accumulation of payroll deductions of not less than l% nor more than 10% (in whole percentage increments) of each participant's compensation (as defined in the plan). No interest is paid on such deductions. A participant may discontinue his or her participation in the plan at any time but, except as may otherwise be determined by the plan administrator in advance of an offering period, may not decrease or increase the rate of payroll deductions for any offering period during such offering period. The employee may, however, increase or decrease the rate of payroll deductions for the next commencing offering period by filing with the Company a new authorization for payroll deductions at least one week (or such other deadline as set by the plan administrator) prior to the next offering period. All payroll deductions made for a participant are credited to his or her accountgranted under the plan and are deposited withis 200,000. If any option granted under the general funds of the Company to be usedplan is terminated for any corporate purpose. The amount by which an employee's payroll deductions exceed the amount required to purchasereason without having been exercised, or without delivery of shares in connection with such termination, or if any restricted shares are forfeited, the shares subject to, but not delivered under, such option, willor such forfeited shares, shall again be refunded toavailable for issuance under the employee with no interest thereon. Amounts attributable to fractional share interests are rolled over into the next offering period.plan.

          NUMBER OF SHARES PURCHASABLE AND PURCHASE PRICE. The number of shares to be purchased is determined by dividing the participant's balance inCurrently, no stock options or restricted stock awards have been granted. Had the plan account onbeen in effect during the last daycompleted fiscal year of the offering period by the purchase price per share for theCompany, shares subject to stock unlessoptions and restricted stock grants would have been granted or issued under the plan administrator has established in advanceto date as follows:

_________________

On August 25, 2006 the closing price of the offering period a lower maximum. The purchase price per share will be 95% of the lesser of the fair market value of the common stock as of the beginning or ending date of the quarterly offering period of shares for the participant's account. The plan administrator, however, has the ability to increase the discount (but in no event greater than 15% of the fair market value) and to determine the fair market value solely as of the beginning or ending date if such determination is made prior to an offering period. The fair market value of common stock isof the closing price as reportedCompany on the New York Stock Exchange (or such other exchange or quotation service as may be applicable) for that date.was $8.06.

Administration

          The maximum numberplan is administered by the Company's Board of shares of common stock that can be purchased under the plan during any one calendar year by any participant is that number having a fair market value of $25,000 on the first day of the offering period pursuant to which the shares are purchased.

          At the beginning of an offering period, each participant is granted an option to purchase up to that number of shares equalDirectors. Subject to the participant's accumulated payroll deductions for the offering period divided by 95% of the lesser of the fair market value of a share of the Company's common stock at the beginning or the end of the offering period, subject to the abilityprovisions of the plan, administratorthe Board of Directors shall be authorized to adjustinterpret the discountplan, to establish, amend, and valuation date, as discussed above. The shares that a participant electsrescind any rules and regulations relating to purchase will be purchased on the last dayplan and to make all other determinations necessary or advisable for the administration of the quarterly offering period.plan. The plan administrator has the right to impose an overall limit on the number of shares issued in any offering period. The Compensation Committee has currently set that limit at 100,000 shares per offering period; however, the Compensation Committee may increase or decrease that limit in the future.

           Unless an employee withdraws his or her participation in the plan or is no longer employed at the end of the offering period, the maximum number of full shares that are purchasable with the accumulated payroll deductions in the employee's account will be purchased for such employee at the applicable purchase price. The shares purchased for the employee will be delivered to him or her as promptly as practicable after the end of the applicable offering period.

          If at the termination of any offering period the total number of shares then available under the plan plus the shares previously purchased under the plan exceeds the maximum number of shares issuable under the plan, the Company will make apro rata allocation of the shares remaining available.

           TERMINATION OF EMPLOYMENT. Termination of a participant's employment for any reason, including retirement or death, or the failure of a participant to remain in the continuous employSecretary of the Company for at least 20 hours per week during(or, if the applicable offering period, cancels his or her participation inSecretary is unavailable, the Chief Financial Officer of the Company) is authorized to implement the plan immediately.in accordance with its terms and to take such actions of a ministerial nature as shall be necessary to effectuate the intent and purposes thereof.

Terms of Options

           TRANSFER RESTRICTIONS.Options are issued under the following terms:

Terms of Restricted Stock Grants

          All restricted shares acquiredgranted pursuant to the plan mustare subject to the following conditions:

Forfeiture Restricted shares shall become non-forfeitable and transferable 24 months following the date on which each restricted stock award is granted, if within such period the participant's service as a director of the Company has not ceased. If the participant's service as a director of the Company ceases before 24 months following the date on which a restricted stock award is granted, then, except as provided below, the restricted shares subject to such restricted stock award shall be forfeited. All restrictions imposed on the transfer of the restricted shares shall lapse, and all such restricted shares shall become non-forfeitable, (i) upon the death or disability of the participant while serving as a director of the Company, or (ii) upon the participant's cessation of service as a director in connection with an acquisition, merger or other transaction resulting in the Leeds family (including Richard Leeds, Robert Leeds and Bruce Leeds) directly or indirectly owning less than 50% of the then-outstanding shares of the Company in the aggregate.

Certificates Certificates for shares will be issued in the names of each participant but such certificates will be held by the participants or their estate for one year, orCompany until such other period of time as maythe restrictions on such shares lapse or expire. The participant, while a director of the Company, shall have the right to vote such restricted shares prior to the receipt of the certificate for such shares and shall have all other rights and privileges of a beneficial and record owner with respect thereto, including the right to receive dividends, distributions and adjustments with respect thereto but any such dividends, distributions and adjustments will be establishedretained by the plan administrator, unless otherwise agreed byCompany for the plan administrator.participant's account and for delivery to the participant only if and when the restricted shares shall have become non-forfeitable.

           CAPITAL CHANGES.Adjustments

          In the event of a stock split, stock dividend, extraordinary cash dividend, reorganization, recapitalization, spinoff, partial liquidation, subdivision or combination of outstandingthe shares of common stock, or other change in corporate structure affecting the payment of a dividend in common stock,shares, the number of shares approved for the plan, and the share limitations, will be increased proportionately, and such other adjustment will be made as may be deemed equitableauthorized by the plan administrator. In the event of any other change affecting the common stock, such adjustment shall be madeincreased or decreased proportionately, as the case may be, deemed equitable byand the plan administratornumber of shares subject to give proper effectany outstanding option shall be increased or decreased proportionately, as the case may be, with appropriate corresponding adjustment in the purchase price per share thereunder in order to such event.prevent enlargement or dilution of the benefits intended to be provided hereunder or under any outstanding award agreement.

Amendment and Termination of the Plan

          NON-ASSIGNABILITY. No rights or accumulated payroll deductions of an employee under theThe plan may be pledged, assigned, transferred or otherwise disposed of in anyway for any reason other than death. Any attempt to do so may be treatedamended by the Company as an election to withdraw from the plan.

           AMENDMENT AND TERMINATION OF THE PLAN. The Board of Directors of the Company may atas it shall deem advisable or to conform to any time amendchange in any law or terminate the plan. Approval ofregulation applicable thereto but any such amendment must be approved by the stockholders of the Company is required for amendments to the plan only to the extent thatif such stockholder approval is requirednecessary to comply with or qualify for any regulation or qualification requirement for which or with which the Board deems it necessary or desirable to comply or qualify.

Registration with the applicable Code sections and rules and regulations governing employee stock purchase plans, as in effect at the time of the proposed amendment, other applicable laws, rules or regulations or the rules of the self regulatory organization under which the shares of the Company are listed or quoted. Under New York Stock Exchange rules, material amendments to the plan must be submitted for stockholder approval.SEC

           REGISTRATION WITH THE SEC.          Upon approval of the plan, the Company intends to file a Registration Statementregistration statement on Form S-8 with the Securities and Exchange Commission to register the issuance of the shares of common stock under the plan. Shares shall not be issued unless such issuance complies with all applicable provisions of law and the requirements of any stock exchange or automated quotation system upon which the shares of stock may then be listed or quoted.

           TAX INFORMATION. Federal Income Tax Consequences of Grants

The Company believes that, under present law, the following are the Federal income tax consequences of the issuance and exercise of options and the receipt of restricted stock under the plan. The plan and the right of participants to make purchases under the plan are intended to qualify as an "employee stock purchase plan" under the provisions of Sections 421 and 423 of the Code. Under these provisions, participantsplan:

Non-Qualified Options

          A director will not recognize any income for federal income tax purposes either upon enrollment inat the plan or upon any purchase oftime a non-qualified stock under the plan. All tax consequences are deferred until a participant sells the stock acquired under the plan disposes of such stock by gift or dies.

           Upon disposition of the shares, the participant will be subject to tax and the amount of the tax will depend upon the holding period. If the shares are sold or disposed of (including by way of gift) more than two years after the first day of the offering period and more than one year after the last day of the offering period, the participantoption is granted. Generally, directors will recognize ordinary income at the time of the exercise of a non-qualified option in a total amount equal to: (1) in the case of options which the director exercises by payment in cash, the excess of the then fair market value of the shares acquired over the exercise price and (2) in the case of options which a director exercises by tendering previously owned shares, the then fair market value of the number of shares issued in excess of the number of shares surrendered upon such exercise.

          If a director receives shares pursuant to the exercise of a non-qualified option, pursuant to Section 83(c) of the Internal Revenue Code of 1986, as amended (the "Code"), such director does not recognize any income until the date on which such director can sell such shares at a profit without being subject to liability under Section 16(b) of the Securities Exchange Act of 1934. Alternatively, a director who would not otherwise be subject to tax on the value of such director's shares as of the date the shares are transferred to him or her can file, within 30 days after the shares are acquired by such director, a written election pursuant to Section 83(b) of the Code to be taxed as of the date of acquisition.

          All income realized upon the exercise of any non-qualified stock option will be taxed as ordinary income. The Company may claim an income tax deduction for the amount taxable to a director in the same year as those amounts are taxable to the director. Shares issued upon the exercise of a non-qualified option are generally eligible for capital gain or loss treatment upon any subsequent disposition. The holding period of a director begins on the date on which such person recognizes income with respect to such shares, and such director's basis in the shares will be equal to the greater of the then fair market value of the shares or the amount paid for such shares. If a director uses common stock that timesuch director owns to exercise a non-qualified option, (a) the director's holding period for the newly-issued shares equal in number to the exchanged shares shall include the period during which the surrendered shares were held, (b) the director's basis in such exchanged shares will be the same as such director's basis in the surrendered shares, and (c) no gain or loss will be recognized by the director on the exchange of the surrendered shares for the exchanged shares.

Restricted Stock Grants

          A director will not recognize any income when the right to acquire restricted shares is granted to him or her, or when the certificates for the restricted shares themselves are registered in his or her name. The director will recognize ordinary income as and when the restricted shares are no longer subject to a substantial risk of forfeiture (which risk of forfeiture includes the restrictions imposed by Section 16(b) of the Securities Exchange Act of 1934), in an amount equal to the lesser of (1) the excess ofdifference between the fair market value of the restricted shares onas of such date and the price, if any, he or she paid for the shares. Alternatively, the director can file a written election, pursuant to Section 83(b) of the Code, no more than 30 days after the certificates for the restricted shares are issued, to be taxed as of the date of sale or disposition over their purchase price, or (2) 5% (or such other percentage as reflectsissuance on the discount discussed above) ofdifference between the then fair market value of the restricted shares onand the first dayprice, if any, he or she paid for the shares. Once the director has recognized ordinary income with respect to the restricted shares, any subsequent increase in the value of the offering period; any further profit is taxable as capital gain. Ifrestricted shares generally will be taxed when the shares are sold and the sale price is less than the purchase price, the difference is treated as capital loss.

          If the shares are sold or disposed of (including by way of gift) before the expiration of the holding periods described in the prior paragraph, the excess of the fair market value of the shares on the last day of the offering period over the purchase price will be treated as ordinary income to the participant. This excess will constitute ordinary income in the year of sale or other disposition even if there is no gain realized on the sale or gift. The balance of any gain or loss will be treated as long-term or short-term capital gain, or loss depending on how long the restricted shares are held. The director's holding period.

period with respect to the restricted shares will begin on the date he or she recognizes ordinary income with respect to the restricted shares and the basis in the shares will be equal to their then fair market value. The Company iswill be entitled to deduct for federal incomea tax purposes the amount taxed as ordinary income to a participantdeduction when, and to the extent, that ordinary income mustis recognized by the director with respect to the shares. Any dividends or other distributions paid on the restricted shares generally will be reportedtaxable when distributed to the participant disposes of shares before the expirationdirector.

Section 280G of the holding periods described above.Code

          Section 280G of the Code provides that if an officer, stockholder or highly compensated individual receives a payment which is in the nature of compensation, and which is contingent upon a change in control of the Company, and such payment equals or exceeds three times his or her "base amount" (as hereinafter defined), then any amount received in excess of the base amount shall be considered an "excess parachute payment." A director's "base amount" is equal to such person's average annual taxable compensation from the Company over the five-year period (or period of service, if shorter) ending with the close of the director's taxable year immediately preceding the taxable year in which the change in control occurs. If the taxpayer establishes, by clear and convincing evidence, that an amount received is reasonable compensation for past or future services, all or a portion of such amount may be deemed not to be an excess parachute payment. Under certain circumstances, options and/or restricted stock awards under the plan could give rise to excess parachute payments. In any such case, in addition to any income tax which would otherwise be owed on such payment, the director will be subject to an excise tax equal to 20% of such excess payment and the Company will not be entitled to any tax deduction to which it otherwise would have been entitled with respect to such payment.

          THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION TO THE PARTICIPANTPARTICIPATING DIRECTOR AND THE COMPANY WITH RESPECT TO OPTIONS GRANTED AND SHARES PURCHASEDISSUED UNDER THE PURCHASE PLAN. IN ADDITION, THE SUMMARY DOES NOT DISCUSS THE TAX CONSEQUENCES OF A PARTICIPANT'S DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH A PARTICIPANT MAY RESIDE.

New Plan BenefitsVote Required for Approval

          Since purchase rights are subject to discretion, including an employee's decision not to participate inStockholder approval is required under the plan, and will depend on the fair market valuerules of the Company's common stock at various future dates, purchases of common stock under the plan for the current fiscal year are not determinable. The Company's non-employee Directors are not allowed to participate in the Plan.

Vote Required

New York Stock Exchange. Approval of the Company's 2005 Employee Stock Purchase Planplan will require the affirmative vote of the holders of a majority of the votes castshares present in person or by proxy and entitled to vote on thisthe issue. There are no rights of appraisal or dissenter's rights as a result of a vote on this issue.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE TO APPROVE THE COMPANY'S 2005 EMPLOYEE2006 STOCK PURCHASEINCENTIVE PLAN FOR NON-EMPLOYEEDIRECTORS, WHICH ISDESIGNATEDIS DESIGNATED AS PROPOSAL NO. 32 ON THE ENCLOSED PROXY CARD.

3.     Ratification of Independent Auditor InformationRegistered Public Accountants

          The Company has not yet selected aAction is to be taken at the Annual Meeting to ratify the selection of Ernst &Young LLP as independent registered public accounting firm asaccountants for the Company's independent auditorsCompany for the fiscal year ending December 31, 2005 and therefore no stockholder ratification2006.

          Representatives of such selection is being soughtErnst &Young LLP are expected to be present at the Annual Meeting. On November 7, 2005, our certifying accountant,Meeting and to be available to respond to appropriate questions. They will have an opportunity to make a statement if they so desire.

Principal Accounting Fees and Services.

          Ernst & Young LLP replaced Deloitte & Touche LLP notified the Company that it will not stand for re-appointment as the Company'sour independent registered public accountantaccountants in December 2005. The following are the fees billed by Ernst & Young LLP and Deloitte & Touche LLP for services rendered during the fiscal years ended December 31, 2004 and 2005:

Audit and Audit-related Fees

          Ernst & Young billed the Company $2,585,000 for professional services rendered for the year ending December 31, 2005, stating thataudit of the client-auditor relationship would cease upon our filing our Form 10-K/ACompany's annual financial statements for the fiscal year ended December 31, 2004. The Company is currently engaged2005 and its reviews of the financial statements included in discussions with auditing firms to replacethe Company's Forms 10-Q for that fiscal year.

          Deloitte & Touche and serve as our independent auditors. Engagement of a new registered public accounting firm will be approved bybilled the Audit CommitteeCompany $1,834,000 for professional services rendered for the audit, including the restatement, of the Board of Directors.

           During our two most recent fiscal years and the subsequent interim period preceding the notification from Deloitte & Touche on November 7, 2005: (i) there were no disagreements between us and Deloitte & Touche on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement, if not resolved to the satisfaction of Deloitte & Touche, would have caused it to make reference to the subject matter of the disagreement in connection with its reports; and (ii) there were "reportable events" (as defined in Item 304(a)(1)(v) of Regulation S-K) as described in the paragraph below. In addition, Deloitte & Touche's reports on our consolidatedCompany's annual financial statements for the past two years did not contain an adverse opinion or a disclaimerfiscal year ended December 31, 2004 and its reviews of opinion, nor were such reports qualified or modified as to uncertainty, audit scope, or accounting principles; however, the 2003 report offinancial statements included in the Company's Forms 10-Q for that fiscal year.

Tax Fees

          Tax fees included services for international tax compliance, planning and advice. Deloitte & Touche issued in connection withLLP billed the 2003 Form 10-K/A contained an explanatory paragraph which addressed the restatement of such year's consolidated financial statementsCompany for professional services rendered for tax compliance, planning and advice for the correctionfiscal year ended December 31, 2005 an aggregate of an error.

           During our two most recent fiscal years and the subsequent interim period preceding the notification from$116,000. The aggregate fees billed by Deloitte & Touche on November 7, 2005,for such services for the following reportable events occurred which caused our auditors to significantly increase the scopeprior fiscal year were $79,000.

All Other Fees

          Other fees of their audit work: (i) An investigation was conducted in 2004 of certain possible irregularities committed$5,000 were billed by former employees of a subsidiary of the Company in connection with a promotional program; (ii) DeloitteErnst & Touche issued a material weakness letter to us, as previously disclosed in Item 9A of our Annual Report on Form 10-KYoung for the year ended December 31, 2004, which addressed (together with material weaknesses identified2005. No other fees were billed by management related to errors at the Company's United Kingdom subsidiary which gave rise toindependent registered public accountants for the restatement referred to in the prior paragraph) the dependency on back end detective controls to overcome system shortcomings and inadequate financial controls, communication and authority on the part of our management over the Company's operating subsidiaries; (iii) The restatement of our consolidated financial statements for our yearsyear ended December 31, 2004, 2003 and 2002 which resulted principally from the discovery of errors in accounting for inventory at our Tiger Direct subsidiary as to 2004 and the timing of revenue recognition as it relates to all years.

           These matters were discussed in detail among management, the audit committee and Deloitte & Touche. The Company has authorized Deloitte & Touche to respond fully to inquiries of the successor accountant concerning the subject matter of the material weakness.

Fees Billed to the Company by Deloitte & Touche LLP for Services During Fiscal 2004

          The fees billed by Deloitte & Touche LLP, our independent auditors in fiscal 2004 and 2003, were as follows:

                                           Fiscal 2004       Fiscal 2003
           Audit Fees                         $986,000          $777,000
           Audit-related Fees                      ---               ---
           Tax Fees                            $79,000           $57,000
           All Other Fees                          ---               ---

           Audit Fees included charges for auditing the Company's annual financial statements and reviewing those financial statements included in the Company's quarterly reports on Form 10-Q. Tax Fees included services for international tax compliance and advice.2004.

          The Audit Committee is responsible for approving every engagement of our independent auditorsErnst & Young to perform audit or non-audit services on behalf of the Company or any of its subsidiaries before DeloitteErnst & ToucheYoung is engaged to provide those services. The Audit Committee of the Board of Directors has reviewed the services provided to the Company by DeloitteErnst & ToucheYoung LLP and believes that the non-audit/review services it has provided are compatible with maintaining the auditor's independence. Deloitte

          Stockholder ratification of the selection of Ernst & Touche resigned as our independent auditors effective November 22, 2005. The Audit Committee is currently reviewing candidates for appointmentYoung LLP as the Company's independent auditorsregistered public accountants is not required by the Company's by-laws or other applicable legal requirement. However, the Board is submitting the selection of Ernst & Young LLP to the stockholders for fiscal 2005.ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee at its discretion may direct the appointment of different independent registered public accountants at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.

Vote Required for Approval

          Ratification of the selection of Ernst & Young LLP as the Company's independent registered public accountants will require the affirmative vote of the holders of a majority of the shares present in person or by proxy and entitled to vote on the issue. There are no rights of appraisal or dissenter's rights as a result of a vote on this issue.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR FISCAL 2006, WHICH IS DESIGNATED AS PROPOSAL NO. 3 ON THE ENCLOSED PROXY CARD.

Solicitation of Proxies

          The cost of soliciting proxies for the 20052006 Annual Meeting will be borne by the Company. In addition to solicitation by mail, solicitations may also be made by personal interview, fax and telephone. Arrangements will be made with brokerage houses and other custodians, nominees and fiduciaries to send proxies and proxy material to their principals, and the Company will reimburse them for expenses in so doing. Consistent with the Company's confidential voting procedure, Directors, officers and other regular employees of the Company, as yet undesignated, may also request the return of proxies by telephone or fax, or in person.

Annual Report

          The Annual Report of the Company for the year ended December 31, 2004 as restated was2005 will be first mailed to all stockholders with this proxy statement.

Stockholder Proposals

          Stockholder proposals intended to be presented at an Annual Meeting,annual meeting, including proposals for the nomination of Directors, must be received by March 31, 2006,2007, to be considered for the 20062007 Annual Meeting. The requirements for submitting suchStockholders proposals are set forth in the Company's By-Laws.should be mailed to Systemax Inc., Attention: Investor Relations, 11 Harbor Park Drive, Port Washington, NY 11050.

Other Matters

          The Board of Directors does not know of any matter other than those described in this proxy statement that will be presented for action at the meeting. If other matters properly come before the meeting, the persons named as proxies intend to vote the shares they represent in accordance with their judgment.

A COPY OF THE COMPANY'S FORM 10-K/A10-K FOR THE YEAR ENDED DECEMBER 31, 20042005 IS INCLUDED AS PART OF THE COMPANY'S ANNUAL REPORT PROVIDED WITH THIS PROXY STATEMENT. AN ADDITIONAL COPY MAY BE OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST. Such request should be sent to: SYSTEMAX INC., 11 Harbor Park Drive, Port Washington, New York 11050 Attention: Investor Relations or via email to investinfo@systemax.com.

Available Information

          The Company maintains an internet web site atwww.systemax.com. The Company files reports with the Securities and Exchange Commission ("SEC") and makes available free of charge on or through this web site its annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, including all amendments to those reports. These are available as soon as is reasonably practicable after they are filed with the SEC. All reports mentioned above are also available from the SEC's web site (www.sec.gov). The information on the Company's web site is not part of this proxy statement or any report the Company files with, or furnishes to, the SEC.SEC is not part of this proxy statement.

          The Company's Board of Board of Directors has adopted the following corporate governance documents (the "Corporate Governance Documents"):

          In accordance with the corporate governance rules of the New York Stock Exchange, each of the Corporate Governance Documents is available on the Company's Company web site (www.systemax.com) or can be obtained by writing to Systemax Inc., Attention: Board of Directors (Corporate Governance), 11 Harbor Park Drive, Port Washington, NY 11050.

         Percentage of Restricted Stock Units               Vesting Date
         -------------------------------------              ------------

                           20%                              The later of May 31, 2005
                                                            or the date on which the
                                                            Performance Condition
                                                            is satisfied.
                           10%                              April 1, 2006
                           10%                              April 1, 2007
                           10%                              April 1, 2008
                           10%                              April 1, 2009
                           10%                              April 1, 2010
                           10%                              April 1, 2011
                           10%                              April 1, 2012
                           10%                              April 1, 2013

1. Election of Directors:
                                         NOMINEES:
[  ] FOR ALL NOMINEES                   (  ) Richard Leeds
                                        (  ) Bruce Leeds
[  ] WITHHOLD AUTHORITYAGAINST                            (  ) Robert Leeds
     FOR ALL NOMINEES
                                        (  ) Gilbert Fiorentino
                                        (  ) Robert Rosenthal
[  ] FOR ALL EXCEPT                     (  ) Stacy S. Dick
     (See instructions below)           (  ) Ann R. Leven