coverage, under our group medical plan in effect from time to time, on the same terms as provided to our other executives until the later of (A) the end of the term of the Employment Agreement plus six months and one day and (B) the date which is 12 months after the date of termination plus six months and one day, (iii) if applicable, the Special Retirement Benefit, (iv) in the case of an automobile owned or leased by Mr. Carter, the car allowance provided under the Employment Agreement, payable beginning six months plus one day after the date of termination until the earlier of (A) 12 months after the date of termination plus six months and one day and (B) the end of the term of the Employment Agreement plus six months and one day, or, in the case of an automobile owned or leased by us, use of such automobile from the date of termination until the earlier of (A) 12 months after the date of termination and (B) the end of the then current term, (v) the option to assume any remaining lease payments of the automobile provided under the Employment Agreement, assuming the leased automobile is one of our automobiles, or to purchase such automobile in accordance with the terms of its lease, (vi) a payment in lieu of any bonus (the ‘‘In-Lieu Bonus’’) in an amount equal to the average of Mr. Carter’s annual bonuses, if any, for the two fiscal years ended immediately prior to the termination, which payment shall be made in respect of each period of 12 months remaining during the term of the Employment Agreement, and a pro-rated amount shall be paid in respect of any period of less than 12 months, payable at the time that other annual bonuses are paid to our other executives (or if no annual bonus is paid during a particular year, in December of the applicable year) and in accordance with Section 409A of the Code, and (vii) notwithstanding the terms of any of our option plans, all unvested stock options to purchase shares of the our common stock granted by us and held by Mr. Carter as of the date of termination (the ‘‘Executive Options’’) under any of our option plans shall immediately vest and be exercisable in accordance with their terms and, notwithstanding the terms of any of our incentive plans, all restricted stock awarded under any incentive plans held by Mr. Carter (‘‘Executive Restricted Stock’’) shall be vested and free of restrictions. For purposes of the Employment Agreement, ‘‘good reason’’ means a material diminution of Mr. Carter’s duties and responsibilities or a substantial reduction in Mr. Carter’s compensation and benefits.

If, within 12 months of a ‘‘change in control’’, Mr. Carter terminates his employment for good reason or we terminate Mr. Carter’s employment without cause, in lieu of the payments and benefits described above, we will provide Mr. Carter with the following payments and benefits:(i) the greater of (x) three times his then applicable base salary and (y) the base salary from the date of termination to the end of the term of the Employment Agreement, payable over a 12-month period beginning six months plus one day after the date of termination, (ii) continued group medical coverage, under our group medical plan in effect from time to time, on the same terms as provided to our other executives until the later of (A) the third anniversary of the date of termination and (B) the end of the term of the Employment Agreement, (iii) if applicable, the Special Retirement Benefit, (iv) in the case of an automobile owned or leased by Mr. Carter, the car allowance provided under the agreement, payable beginning six months plus one day after the date of termination until the later of (A) the third anniversary of the date of termination plus six months and one day and (B) the end of the term of the Employment Agreement plus six months and one day, or, in the case of an automobile owned or leased by us, use of such automobile from the date of termination until the later of (A) the third anniversary of the date of termination and (B) the end of the term of the Employment Agreement, (v) the option to assume any remaining lease payments of the automobile provided under the Employment Agreement or to purchase such automobile in accordance with the terms of its lease, and (vi) three times the In-Lieu Bonus, payable over a 12-month period beginning six months plus one day after the date of termination. In the event of a change in control, all Executive Options shall immediately vest and be exercisable in accordance with their terms and the Executive Stock shall be vested and free of restrictions. In the event that these payment or benefits give rise to the excise tax payable by Mr. Carter under Section 4999 of the Code, we will reduce the amount of such payments by the minimum amount necessary to avoid payment of the excise tax.

Under the Employment Agreement, the term ‘‘change in control’’ means (i) we are merged or consolidated with, or, in any transaction or series of transactions, all or substantially all of our business or assets shall be sold or otherwise acquired by, another corporation or entity and, as a result thereof, our stockholders immediately prior thereto shall not have at least 50% or more of the combined voting power of the surviving, resulting or transferee corporation or entity; (ii) any person (as that term is used in

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Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended from time to time) who is not an affiliate of ours or a 5% or more holder, in each case as of the date of this the Employment Agreement, is or becomes the beneficial owner (as that term is used in Section 13(d) of said Act and the applicable rules and regulations thereof) of our stock entitled to cast more than 25% of the votes at the time entitled to be cast generally for the election of directors; or (iii) more than 50% of the members of the Board shall not be Continuing Directors. ‘‘Continuing Directors’’ means our directors (A) who were members of the Board on January 1, 2006 or (B) who subsequently became our directors and who were elected or designated to be candidates for election as nominees of the Board, or whose election or nomination for election by our stockholders was otherwise approved, by a vote of a majority of the Continuing Directors then on the Board).

No other Named Executive Officer has an employment agreement with us. Please refer to Potential Payments Upon Termination or Change-In-Control for such payments that may be made to our other Named Executive Officers.

Grants of Plan-Based Awards

The following table sets forth certain information with respect to the plan-based awards granted to the Named Executive Officers during the fiscal year ended December 30, 2006: (1) the grant date; (2) the date the equity awards were approved; (3) all option awards, which consist of the number of shares underlying stock options awarded to the named executives; (4) the exercise price of the stock option awards, which reflects the closing price of our common stock on the date of grant; and (5) the grant date fair value of each equity award computed under SFAS 123R.

Name (a)			Grant Date (b)						All Other Option Awards: Number of Securities Underlying Options (#)(j)						Exercise or Base Price of Option Awards ($/Sh)(k)						Grant Date Fair Value of Stock and Option Awards ($)(1)(l)
Mason N. Carter					06/22/06						35,000						9.52						89,950
Robert V. Condon					06/22/06						10,000						9.52						25,700
Reynold K. Green					06/22/06						10,000						9.52						25,700
Michael M. Ghadaksaz					06/22/06						10,000						9.52						25,700
James J. Logothetis					—						—						—						—

(1)

The value of stock option awards was calculated using the Black-Scholes method in accordance with SFAS No. 123R. A discussion of the assumptions used in calculating the Black-Scholes values may be found in Notes 1 and 7 of our audited Consolidated Financial Statements contained in our Form 10-K for the year ended December 30, 2006 which accompanies this Proxy Statement.

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Outstanding Equity Awards at Fiscal Year-End

The following table provides information on the current holdings of outstanding equity awards by the Named Executive Officers. This table shows unexercised exercisable (vested) and unexercisable (unvested) option awards during the fiscal year ended December 30, 2006. None of the Named Executive Officers has been granted any stock awards. Each option grant is shown separately for each Named Executive Officer. The vesting schedule for each fiscal year 2006 grant is shown following this table.

			Option Awards
Name (a)			Number of Securities Underlying Unexercised Options (#) Exercisable (b)						Number of Securities Underlying Unexercised Options (#) Unexercisable(1)(c)						Option Exercise Price ($)(e)						Option Expiration Date (f)
Mason N. Carter					22,000						—						11.477						01/08/08
					15,000						—						7.000						06/10/09
					2,500						—						8.375						02/22/10
					—						35,000						9.520						06/21/16
Robert V. Condon					2,750						—						13.011						04/28/08
					—						10,000						9.520						06/21/16
Reynold K. Green					3,500						—						7.000						06/10/09
					8,250						—						9.040						03/27/15
					—						10,000						9.520						06/21/16
Michael M. Ghadaksaz					5,000						—						4.890						02/07/13
					5,000						—						6.610						02/07/14
					10,000						—						9.040						03/27/15
					—						10,000						9.520						06/21/16
James J. Logothetis					27,500						—						13.636						09/12/07
					1,000						—						6.000						05/10/09
					2,500						—						7.000						06/10/09
					2,500						—						8.375						02/22/10

(1)	The grant date of each of the awards in this column was June 22, 2006. One-third of each such option vests on each of the first, second and third anniversaries of the grant date.

Option Exercises and Stock Vested

None of our Named Executive Officers exercised any options during fiscal year 2006 and none of the Named Executive Officers held restricted stock as of the end of fiscal year 2006.

Potential Payments Upon Termination or Change-In-Control

On March 29, 2006, the Compensation Committee of the Board of Directors adopted the Amended and Restated Severance Plan (which replaces the previous plan adopted in September 2003) for key executives designated from time to time by the Compensation Committee, including the Named Executive Officers, with the exception of Mr. Carter. The Severance Plan provides, among other things, that if an executive is terminated by us without ‘‘cause’’ and other than on account of the executive’s death or ‘‘disability,’’ or if the executive resigns for ‘‘good reason’’ (as such terms are defined in the Severance Plan) within 12 months following a ‘‘change in control’’ (as defined therein), we, or a successor of ours, is obligated to pay to the executive one or two times (as determined by the Compensation Committee) his ‘‘annual base salary’’ (as defined in the Severance Plan) and to continue to provide health insurance benefits for 24 months (to the extent not covered by any new employer). However, to the extent that any payments made under the Severance Plan would otherwise be subject to the excise tax imposed under the Golden Parachute Payment provisions of Section 4999 of the Internal Revenue Code of 1986, as amended (the ‘‘Code’’), we will reduce the amount of such payments by the minimum amount necessary to avoid being subject to such excise tax.

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For purposes of the Severance Plan, an executive’s ‘‘annual base salary’’ is the executive’s regular basic annual compensation prior to any reduction under a salary reduction agreement pursuant to Section 401(k) or Section 125 of the Code, and will not include (without limitation) cost of living allowances, fees, retainers, reimbursements, bonuses, incentive awards, prizes or similar payments. The executive has a ‘‘disability’’ for purposes of the Severance Plan if, as result of physical or mental illness or injury, the executive is unable to perform the essential duties of his or her position for a period of 90 consecutive days or for a period of 120 non-consecutive days in any 12-month period, or poses a direct threat to the safety and health of the executive or others and there is no reasonable accommodation that we can that would allow the executive to perform the essential functions of the executive’s position as determined by applicable law.

All payments under the Severance Plan will be payable at such times as determined by the Compensation Committee provided that all such payments are made prior to the later of (1) March 15 of the calendar year following the year in which the termination occurs and (2) two and one-half months after the end of our year end in which such termination occurred. All payments will be made so as to comply with Section 409A of the Code and the Severance Plan may need to be further amended to comply with final regulations recently issued under Section 409A of the Code by the US Department of Treasury and the Internal Revenue Service. In connection with any payment under the Severance Plan, the Compensation Committee may require that the executive enter into non-competition/non-solicitation and confidentiality agreements as it deems appropriate. If an executive has entered into an agreement with us, which agreement covers the subject matter of the Severance Plan, such agreement will govern so that the executive will not be entitled to payments under both the agreement and the Severance Plan. The Severance Plan is filed as an exhibit to our Annual Report on Form 10-K for the year ending December 31, 2005.

For purposes of the Severance Plan, ‘‘change in control’’ shall mean and be deemed to have occurred if: (i) the we have merged or consolidated with, or, in any transaction or series of transactions, all or substantially all of our business or assets shall be sold or otherwise acquired by, another corporation or entity and, as a result thereof, our stockholders immediately prior thereto shall not have at least 50% or more of the combined voting power of the surviving, resulting or transferee corporation or entity, (ii) any person (as that term is used in Sections 13(d) and 14(d) of the Exchange Act) who is not an affiliate of ours or a 5% or more holder, in each case as of January 1, 2006, is or becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act) of our stock entitled to cast more than 25% of the votes at the time entitled to be cast generally for the election of directors, or (iii) more than 50% of the members of the Board shall not be ‘‘continuing directors.’’ Under the Severance Plan, ‘‘continuing directors’’ are our directors (i) who were members of the Board on January 1, 2006, or (ii) who subsequently became our directors and who were elected or designated to be candidates for election as nominees of the Board, or whose election or nomination for election by our stockholders was otherwise approved, by a vote of a majority of the continuing directors then on the Board.

Under the Severance Plan, ‘‘cause’’ means the executive’s (1) willful failure to perform his or her normal and customary duties for an extended period of time for any reason, other than disability, (ii) gross negligence or willful misconduct, including but not limited to fraud, embezzlement or intentional misrepresentation, (iii) commission of, or indictment or conviction for, a felony, (iv) misappropriation of a material opportunity of ours, (v) willfully engaging in competitive activities against us or purposely aiding a competitor of ours, or (vi) violation of any fiduciary duty owed to us or any subsidiaries or any material provision of any agreement the executive has with us or any subsidiary and, in each case, the executive has failed to cure the violation (if curable as determined by us) within ten days after receipt of written notice from us of such violation or, if reasonable under the circumstances, such additional period of time during which the executive is using his best efforts to so cure, not to exceed 30 days in the aggregate.

In addition, the Severance Plan currently defines ‘‘good reason’’ to mean the occurrence (without the executive’s prior express written consent) of any one of the following acts, or failures to act: (i) a material diminution of the duties and responsibilities of the executive, (ii) a substantial reduction in compensation or benefits of the executive, (iii) any failure by us to comply with any of the provisions of the Severance Plan, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is

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remedied by us promptly after receipt of notice thereof given by the executive, (iv) any purported termination of the executive’s employment which is not pursuant to a ‘‘notice of termination’’ under the Severance Plan (citing specific provisions of the Severance Plan relied upon in the termination and detain the facts and circumstances claimed to provide a basis thereof), or (v) the relocation of our principal executive offices where the executive works at a location more than 25 miles from its location on the date of the adoption of the Severance Plan or our requiring the executive to be based anywhere other than the our principal executive offices.

The Board may amend or terminate the Severance Plan in whole or in part at any time upon notice to all of the participating executives; provided, however, that, subsequent to a change in control or during the period of 180 days prior to a change in control, no such amendment which could adversely affect the rights of any executive nor any termination shall become effective until the expiration of one year following the change in control. The Board intends to amend the Severance Plan to provide that any determinations currently made by the Compensation Committee, as described above, will in the future be made by the Board on the recommendation of the Compensation Committee.

The table below estimates amounts payable upon a termination as if the individuals were terminated on December 30, 2006 using the closing share price of $10.00 for our Common Stock as of that day.

Name and Principal Position			Bonus Payment ($)						Severance Pay ($)						Severance Payable Through			Health Insurance Benefits ($)			Automobile Allowance ($)						Stock Options ($)			Total ($)
Mason N. Carter     Chairman, President and     Chief Executive Officer					996,029						1,328,038				06/30/08			59,855(a)					50,544	(a)			16,800(c)					2,451,266
Robert V. Condon     Vice President, Finance,     Chief Financial Officer     Treasurer and Secretary					—						382,074				12/30/07			23,084(b)					—				4,800(d)					405,158
Reynold K. Green     Vice President and Chief     Operating Officer					—						390,000				12/30/07			29,928(b)					11,280	(b)			4,800(d)					431,208
Michael M. Ghadaksaz     Vice President, Market     Development					—						322,086				12/30/07			29,928(b)					—				4,800(d)					352,015
James J. Logothetis     Vice President and Chief     Technology Officer					—						303,075				12/30/07			29,928(b)					—				—					333,003

(a)	Certain benefits under Mr. Carter’s employment agreement dated April 11, 2006 are payable through December 30, 2010.

(b)	Certain benefits under the Amended and Restated Severance Plan dated March 29, 2006 are payable through December 30, 2008.

(c)	Under Mr. Carter’s employment agreement, Mr. Carter’s options would vest immediately upon a Change of Control (as defined in Mr. Carter’s employment agreement), even in the absence of Mr. Carter’s termination.

(d)	Under the 2006 Stock Option Plan, the options would vest immediately upon a Change of Control (as defined in the 2006 Stock Option Plan).

Director Compensation Table

Each director who is not an employee of ours receives a monthly director’s fee of $1,500, plus an additional $500 for each meeting of the Board and of any Committees of the Board attended. In addition, the Chair of the Audit Committee receives an annual fee of $2,500 for his services in such capacity. The directors are also reimbursed for reasonable travel expenses incurred in attending Board and Committee meetings.

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In addition, pursuant to the 2006 Stock Option Plan, each non-employee director is granted an option to purchase 2,500 shares of the Common Stock of the Company on the date of each Annual Meeting of Stockholders. Such options have a three-year vesting period. Each such grant has an exercise price equal to the fair market value on the date of such grant and will expire on the tenth anniversary of the date of the grant. On June 22, 2006, non-qualified stock options to purchase an aggregate of 17,500 shares were issued to seven directors at an exercise price of $9.52 per share. Also on June 22, 2006, pursuant to the 2006 Non-Employee Directors’ Stock Plan, each of our non-employee directors, other than Mr. Miller, received a grant of 1,500 shares of restricted stock at a fair market value of $9.52 per share. One third of such restricted stock vests on the anniversary of the grant date over a three-year period.

The table below summarizes the compensation of directors.

Name(3)(a)			Fees Earned or Paid in Cash ($)(b)						Stock Awards ($)(1)(c)						Option Awards ($)(2)(d)						All Other Compensation ($)(g)						Total ($)(h)
Albert H. Cohen					28,500						2,777						1,250						—						44,030
Edward H. Cohen					31,500						2,777						1,250						—						47,030
Fernando L. Fernandez					23,000						2,777						1,250						—						38,530
Joel H. Goldberg					23,500						2,777						1,250						10,200	(4)					49,230
David B. Miller					20,500						—						1,250						—						21,750
Arthur A. Oliner					21,000						2,777						1,250						36,000	(5)					72,530
Harold J. Raveché					28,000						2,777						1,250						—						43,530

(1)

The charge to earnings that we took in fiscal year 2006 for each director’s grant of 1,500 shares of restricted stock was $2,777, or $16,660 in the aggregate for the non-employee directors. This total value was calculated by multiplying the number of shares of stock at its fair market value of $9.52 per share, divided by a 36-month vesting period, and multiplying by seven, the number of months in fiscal year 2006 that the grant covered. This charge is based on the market value of the restricted stock, amortized over three years of service.

(2)

Each of the directors received options to purchase 2,500 shares, which were granted on June 22, 2006. The fair value of each directors’ award granted pursuant to the 2006 Stock Option Plan was $6,425 at $2.57 per share, using the Black-Scholes method in accordance with SFAS No. 123R. A discussion of the assumptions used in calculating the Black-Scholes values may be found in Notes 1 and 7 of our audited Consolidated Financial Statements contained in our Form 10-K for the year ended December 30, 2006 which accompanies this Proxy Statement.

(3)	The table below summarizes the aggregate number of stock awards and the aggregate number of option awards for each director outstanding at December 30, 2006.

Name (a)			Stock Awards (c)						Option Awards (d)
Albert H. Cohen					1,500						12,500
Edward H. Cohen					1,500						15,000
Fernando L. Fernandez					1,500						10,000
Joel H. Goldberg					1,500						15,000
David B. Miller					—						15,000
Arthur A. Oliner					1,500						15,000
Harold J. Raveché					1,500						15,000

(4)	Represents fees paid to Career Consultants, Inc., of which Dr. Goldberg is Chairman, Chief Executive Officer and principal owner, to provide pre-employment testing and evaluation.

(5)	Represents fees paid for technology-related consulting services.

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RATIFICATION OF SELECTION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal 2)

The Audit Committee has selected J.H. Cohn as our independent registered public accounting firm to audit and report upon our consolidated financial statements for fiscal year 2007. The Board recommends that the stockholders ratify the selection of J.H. Cohn. The independent registered public accounting firm for fiscal year 2005 and 2006 was Grant Thornton LLP.

A representative of J.H. Cohn is expected to be present at the Meeting to respond to appropriate questions, and to make a statement if he desires. A representative of Grant Thornton LLP is not expected to be present at the Meeting.

Audit Fees.    The aggregate fees billed or to be billed by our independent registered public accounting firm for each of the last two fiscal years for professional services rendered for the audit of our annual financial statements, review of financial statements included in our quarterly reports on Form 10-Q and services that were provided in connection with statutory and regulatory filings or engagements were $429,800 in 2006, which includes $308,100 for the 2006 audit, $15,800 for consent fees in connection with SEC Form S-8 filings, and $105,900 for 2006 quarterly reviews, and $291,000 in 2005, billed by Grant Thornton LLP.

Audit-related Fees.    There were no aggregate fees billed or to be billed by our independent registered public accounting firm for each of the last two fiscal years for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements.

Tax Fees.    The aggregate fees billed by our independent registered public accounting firm in each of the last two fiscal years for professional services rendered for tax compliance, tax advice and tax planning were $34,700 in 2006 by Grant Thornton LLP, and $43,200 in 2005. The nature of the services performed for these fees was tax return preparation and services provided in connection with net operating loss carryforward limitations.

All Other Fees. The aggregate fees billed by the Company’s independent registered public accounting firm in each of the last two fiscal years for products and services other than those reported in the three prior categories were $5,000 in 2006 and $11,500 in 2005 billed by Ernst & Young LLP. The nature of these services performed for these fees was for consents for 2006 SEC Form S-8 filings and for the 2005 SEC Form 10-K financial statements.

Prior Independent Registered Public Accounting Firms

On April 25, 2007, the Audit Committee dismissed Grant Thornton LLP as our independent registered public accounting firm.

The audit reports of Grant Thornton LLP on our consolidated financial statements as of and for the fiscal years ending December 31, 2005 and December 30, 2006 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.

During the fiscal years ended December 31, 2005 and December 30, 2006, and for the interim period through April 25, 2007, the date our engagement of Grant Thornton LLP ended, there were no disagreements with Grant Thornton LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to Grant Thornton LLP’s satisfaction, would have caused them to make reference to the subject matter of the disagreement in connection with their reports. During the fiscal years ended December 31, 2005 and December 30, 2006, and for the interim period through April 25, 2007, the date our engagement of Grant Thornton LLP ended, Grant Thornton LLP did not advise us of any reportable events under Item 304(a)(1)(iv) and (v) of Regulation S-K promulgated under the Securities Exchange Act of 1934. We provided Grant Thornton LLP with a copy of the foregoing disclosures. Attached as Exhibit 16.1 to our Form 8-K filed with the SEC on April 27, 2007 is a copy of the letter from Grant Thornton LLP to the SEC, dated April 26, 2007, stating that it agreed with such statements.

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On April 25, 2007, the Audit Committee of our Board engaged J.H. Cohn as our new independent registered public accounting firm. During the fiscal years ended December 31, 2005 and December 30, 2006, and for the interim period through April 25, 2007, the date our engagement of Grant Thornton LLP ended, neither we nor anyone acting on our behalf consulted J.H. Cohn regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on our financial statements, and neither a written report nor oral advice was provided to us by J.H. Cohn that J.H. Cohn concluded was an important factor considered by us in reaching a decision as to any accounting, auditing or financial reporting issues; or (ii) any matter that was either the subject of a ‘‘disagreement’’ or ‘‘event,’’ as those terms are described in Item 304(a)(1)(iv) and (v) of Regulation S-K.

An affiliate of J.H. Cohn, Cohn Consulting Group, performed the initial work related to the implementation of Section 404 of the Sarbanes-Oxley Act of 2002 for the Company in 2004 and 2005. Cohn Consulting Group also performed limited internal audit procedures for the Company related to the third and fourth quarters of 2005. Their work in 2006 was limited to attendance at Audit Committee meetings.

Policy on Pre-Approval of Services Provided by Independent Registered Public Accounting Firms

The Audit Committee has established policies and procedures regarding pre-approval of all services provided by our independent registered public accounting firm. The Audit Committee will annually review and pre-approve the services that may be provided by the independent registered public accounting firm without obtaining specific pre-approval from the Audit Committee. Unless a type of service has received general pre-approval, it requires specific pre-approval by the Audit Committee if it is to be provided by the independent registered public accounting firm. The Audit Committee may delegate, subject to any rules or limitations it may deem appropriate, to one or more designated members of the Audit Committee the authority to grant such pre-approvals; provided, however, that the decisions of any member to whom authority is so delegated to pre-approve an activity shall be presented to the full Audit Committee at its next scheduled meeting. The Audit Committee has delegated such pre-approval authority to Edward H. Cohen, Chair of the Audit Committee. The Audit Committee pre-approved all audit and permitted non-audit services in 2006 as well as those that were provided in 2005 after the pre-approval requirements under the Sarbanes-Oxley Act became effective on May 6, 2003. Our pre-approval policy can be found on our website at www.merrimacind.com.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE FOR RATIFICATION OF J.H. COHN LLP AS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2007.

Ratification of J.H. Cohn as independent registered public accounting firm for 2007 requires the affirmative vote of a majority of the shares present at the Meeting and entitled to vote on the ratification of the independent registered public accounting firm. Unless otherwise indicated, the accompanying form of proxy will be voted FOR the proposal to ratify J.H. Cohn as the registered public accounting firm for 2007. Although stockholder ratification of the Board’s action in this respect is not required, the Board considers it desirable for stockholders to pass upon the selection of the independent registered public accounting firm and, if the stockholders disapprove of the selection, intends to reconsider the selection of the independent registered public accounting firm for the fiscal year 2008.

STOCKHOLDER PROPOSALS

In order to be included in the proxy statement and proxy card relating to the 2008 annual meeting of stockholders, stockholder proposals must be received by our Secretary at the address below no later than December 31, 2007. The proxy or proxies designated by us will have discretionary authority to vote on any matter properly presented by a stockholder for consideration at the next annual meeting of stockholders but not submitted for inclusion in the proxy materials for such meeting, unless notice of the matter is received by our Secretary at the address set forth below not later than March 17, 2008. All proposals must meet the requirements set forth in the rules and regulations of the SEC in order to be eligible for inclusion in the proxy statement for the 2008 annual meeting of stockholders.

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ANNUAL REPORT

All stockholders as of the Record Date are concurrently being sent a copy of our Annual Report for the fiscal year ended December 30, 2006.

In addition, upon the written request of any stockholder, we will furnish that person, without charge, with a copy of the Form 10-K as filed with the SEC on April 16, 2007. Any such request should be made in writing to:

Secretary
Merrimac Industries, Inc.
P.O. Box 986
West Caldwell, NJ 07007-0986

OTHER BUSINESS

As of the date of this Proxy Statement, the Board has no knowledge of any business other than that described above that will be presented at the Meeting for action by the stockholders. If any other business should properly come before the Meeting, it is intended that the persons designated as attorneys and proxies in the enclosed form of proxy will vote all such proxies as they in their discretion determine.

By Order of the Board of Directors

/s/ Robert V. Condon ROBERT V. CONDON Secretary

April 30, 2007

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MERRIMAC INDUSTRIES, INC.
41 FAIRFIELD PLACE
WEST CALDWELL, NEW JERSEY 07006-6287

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Mason N. Carter and Robert V. Condon as proxies, each with the power to appoint his substitute, and hereby authorizes either or both to represent and to vote all shares of Common Stock of Merrimac Industries, Inc. held of record by the undersigned on April 27, 2007, at the Annual Meeting of Stockholders to be held on June 20, 2007, at Merrimac Industries, Inc., 41 Fairfield Place, West Caldwell, New Jersey, at 10:00 a.m. (or any adjournment or postponement thereof), for the proposals referred to herein and described in the Proxy Statement, and to vote in their discretion on any other business as may properly come before the Annual Meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED 1. FOR THE ELECTION OF THE NOMINEES OF THE BOARD OF DIRECTORS, AND 2. FOR THE RATIFICATION OF J.H. COHN LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2007.

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

Please mark your votes as indicated in this example

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2:

1. PROPOSAL: Election of Directors

FOR all nominees			WITHHOLD AUTHORITY			FOR  ALL  EXCEPT
			for all nominees

(Instruction: To Withhold the authority to vote for any individual nominee, mark the box next to that nominee’s name below.)

Name of Nominee:			Edward H. Cohen			Arthur A. Oliner			Harold J. Raveché

2. Proposal: Ratification of J.H. Cohn LLP as our independent registered public accounting firm for fiscal year 2007

FOR			AGAINST			ABSTAIN

FOLD AND DETACH HERE

*Note* Other business: To transact such other business as may properly come before the meeting.

This proxy must be signed exactly as name appears hereon. When shares are held by joint tenants, both should sign. Executors, administrators, trustees, etc., should give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer.

Dated:                                                       , 2007

(Signature)

(Signature)

Please mark, sign, date and return this proxy card promptly using the enclosed envelope.  

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