##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    January 3, 2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission File Number:
    000-27617
  THE MANAGEMENT NETWORK GROUP,
    INC.
 (Exact name of registrant as
    specified in its charter)
  DELAWARE

48-1129619(State or other jurisdiction
    of

(I.R.S. Employerincorporation or
    organization)

identification
    number)   7300 COLLEGE BOULEVARD,
 SUITE 302, OVERLAND PARK, KANSAS 66210
 (Address of principal executive
    offices) (Zip Code)
  REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE:
 (913) 345-9315
 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE
    ACT:
  Title of Each Class

Name of Each Exchange on Which RegisteredCOMMON STOCK, $.001 PAR VALUE PER SHARE

The NASDAQ STOCK MARKET, LLC   SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE
    ACT:
 NONE.
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated filer o

Accelerated filer o

Non-accelerated filer o
    (Do not check if a smaller reporting company)

Smaller reporting company þ   Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K




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##### 





THE
    MANAGEMENT NETWORK GROUP, INC.
  FORM 10-K
  
  TABLE OF
    CONTENTS
   
 PagePART ICautionary Statement Regarding Forward-Looking
    Information


3Item 1.


Business


4Item 1A.


Risk Factors


12Item 1B.


Unresolved Staff Comments


12Item 2.


Properties


12Item 3.


Legal Proceedings


12Item 4.


Submission of Matters to a Vote of Security
    Holders


12PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters, and Issuer Purchases of Equity
    Securities


13Item 6.


Selected Financial Data


13Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


13Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


28Item 8.


Consolidated Financial Statements


29Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


62Item 9A.


Controls and Procedures


62Item 9A(T).


Controls and Procedures


62Item 9B.


Other Information


62PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


63Item 11.


Executive Compensation


63Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


63Item 13.


Certain Relationships, and Related Transactions
    and Director Independence


63Item 14.


Principal Accountant Fees and Services


64PART IVItem 15.


Exhibits and Financial Statement Schedules


64EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1          2




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PART I CAUTIONARY
    STATEMENT REGARDING FORWARD-LOOKING INFORMATION  Form 10-K
    
    conditions in the industry sectors that we serve, including the
    recent worsening of economic conditions in such industry
    sectors, resulting in slowing client decisions on proposals and
    project opportunities along with scope reduction of existing
    projects
    the financial condition and business strategies of our customers
    in the converging communications, media and entertainment
    industry and the investment banking and private equity firms
    investing in that industry,
    overall economic and business conditions given the current
    global economic recession, including the recent worsening of
    conditions in the credit markets and in general economic
    conditions
    the level of demand for our services, including recently
    decreasing demand for services
    the potential continuation or recurrence of recent losses from
    operations, negative cash flow and reductions in our cash
    reserves,
    our ability to retain the limited number of large clients that
    constitute a major portion of our revenues,
    fluctuations in our quarterly operating results,
    our ability to reduce our cost structure to align with reduced
    demand and to control costs under fixed fee contracts, which
    make up a substantial portion of our business,
    our ability to compete in intensively competitive markets,
    including our ability to address actions by competitors that
    could render our services less competitive, such as the recent
    increase in price competition, which may cause our revenues,
    gross profits and income to decline,
    our ability to address the challenges of conducting business in
    foreign countries, including risks of unfavorable foreign
    currency exchange rates or fluctuations and changes in local
    laws,
    the possibility of further impairments of goodwill if our
    financial performance does not meet or exceed our projections
    used to value the assets or if there is a further decline in our
    stock price,
    the possibility of further write-downs in the value of our
    auction rate securities due to future fluctuations in interest
    rates, counter-party credit ratings and liquidity in the
    secondary market for these securities,
    our ability to successfully integrate recent acquisitions and to
    successfully locate new acquisition candidates,
    our level of cash and non-cash expenditures, 3




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
    technological advances and competitive factors in the markets in
    which we compete,
    possible regulatory action related to our past equity granting
    practices and associated accounting,
    the possibility of the cancellation of key client contracts,
    which may be cancelled on short notice,
    the ability to successfully launch new product and market
    initiatives,
    the ability to retain key management and consulting personnel,
    particularly given the performance of our stock and the impact
    of a low stock price on the value of share-based compensation,
    the possible reclassification of our independent contractors,
    who we rely upon heavily, as full-time employees by the taxing
    and/or labor
    and employment authorities of competent jurisdiction,
    the possibility of professional liability claims,
    the loss of key intellectual property,
    our ability to satisfy the continued listing requirements of the
    NASDAQ Stock Market (including our failure to satisfy the NASDAQ
    Stock Markets $1.00 minimum bid price requirement which
    has been temporarily suspended), and
    the possibility that our ability to utilize tax net operating
    loss carryforwards to offset future taxable income will be
    limited if we are deemed to have an ownership change as defined
    by Section 382 of the Internal Revenue Code.  Form 10-K
  ITEM 1.
    BUSINESS    GENERAL
     4




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tm
       5




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MARKET
    OVERVIEW
        BUSINESS
    STRATEGY
    -
    Develop and evolve offerings, solutions and thought
    leadership
   6




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-
    Continue to build the TMNG Global brand
    -
    Focused and effective recruitment and retention
        -
    Enhancing our global presence
    SERVICES
    -
    Strategy and Business Case Development
   7




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-
    Organization Development
    -
    Knowledge Management
    -
    Product Development and Management
    -
    Customer Acquisition and Retention
  e-marketing,
  -
    Revenue and Cost Management
  tm tm tm self-amortizing
  -
    Program Management, Business and Operations Process Redesign and
    Reengineering
   8




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-
    Corporate Investment Services
    -
    Technical Consultancy & Software
    Development
    tm tm tm
  COMPETITION
  and/or
     9




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RISKS
    RELATED TO CURRENT ECONOMIC CONDITIONS
    EMPLOYEES
      BUSINESS
    SEGMENTS
   10




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MAJOR
    CUSTOMERS
      FOREIGN
    MARKETS
    INTELLECTUAL
    PROPERTY
   11




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SEASONALITY
    WEBSITE
    ACCESS TO INFORMATION
  Form 10-K, Form 10-Q, Form 8-K,
  ITEM 1A.
    RISK
    FACTORS    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    LeaseLocation

Sq. Feet


ExpirationMcLean, Virginia


7,575


June 2009Boston, Massachusetts


21,710


January 2011Somerset, New Jersey


2,910


February 2014London, England (Gate Street)


11,825


November 2015London, England (Kingsway House)


3,210


June 2009     ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   12




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##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    High


LowFirst quarter, fiscal year 2008

$
2.75


$
1.55Second quarter, fiscal year 2008

$
2.08


$
1.38Third quarter, fiscal year 2008

$
1.45


$
0.95Fourth quarter, fiscal year 2008

$
0.99


$
0.38   High


LowFirst quarter, fiscal year 2007

$
2.15


$
1.42Second quarter, fiscal year 2007

$
2.45


$
1.67Third quarter, fiscal year 2007

$
2.48


$
2.00Fourth quarter, fiscal year 2007

$
2.76


$
2.07   mark-up,
      ITEM 6.
    SELECTED
    FINANCIAL DATA    ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K.
 13




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forward-looking Form 10-K
    OVERVIEW
           14




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15




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CRITICAL
    ACCOUNTING POLICIES 
      
    Marketable Securities;
    Allowance for Doubtful Accounts;
    Fair Value of Acquired Businesses;
    Impairment of Goodwill and Long-lived Assets;
    Revenue Recognition;
    Share-based Compensation Expense; 16




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
    Accounting for Income Taxes; and
    Research and Development and Capitalized Software Costs.  Marketable Securities Accounting for Certain
    Investments in Debt and Equity Securities Fair Value Measurements
      Accounting for Derivative
    Instruments and Hedging Activities The Fair Value Option for Financial Assets and
    Financial Liabilities Including an amendment of FASB Statement
    No. 115
   17




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Allowances for Doubtful Accounts
      Fair Value of Acquired Businesses Business Combinations
  Impairment of Goodwill and Long-lived Assets Goodwill and Other Intangible Assets
 18




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Anticipated future cash flows and terminal value for each
    reporting unit
  Selection of an appropriate discount rate
  Accounting
    for the Impairment or Disposal of Long-Lived Assets,
    Revenue Recognition No. 81-1, Accounting for Performance of Construction-Type and
    Certain Production-Type Contracts (SOP No. 81-1).
 19




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No. 81-1.
  SOP No. 81-1 percentage-of-completion
  SOP No. 81-1 No. 00-21, Revenue Arrangements with Multiple
    Deliverables No. 00-21). No. 00-21 and/or No. 00-21
    Share-based Compensation Expense Share-based Payments
 20




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Accounting for Income Taxes
     21




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Research and Development and Capitalized Software
    Costs Accounting for the Costs of Computer Software to Be
    Sold, Leased, or Otherwise Marketed
  RECENT
    ACCOUNTING PRONOUNCEMENTS
  157-2, (FSP 157-2) 157-1, (FSP 157-1) FAS 157-3, (FSP 157-3) FAS 157-3 FSP 157-2
   22




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No. FAS 142-3, FAS 142-3). FAS 142-3 FAS 142-3 and/or
  RESULTS
    OF OPERATIONS
  FISCAL
    2008 COMPARED TO FISCAL 2007
  REVENUES
    Management Consulting Services Segmen
 23




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Software Solutions Segment
  COST OF
    SERVICES
    OPERATING
    EXPENSES
   24




---



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OTHER
    INCOME AND EXPENSES
    INCOME
    TAXES
     25




---



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NET
    LOSS
    LIQUIDITY
    AND CAPITAL RESOURCES
           26




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27




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FINANCIAL
    COMMITMENTS AND OFF BALANCE SHEET ARRANGEMENTS
      Form 8-K
  TRANSACTIONS
    WITH RELATED PARTIES
      ITEM 7A.
    QUALITATIVE
    AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK   28




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ITEM 8.
    CONSOLIDATED
    FINANCIAL STATEMENTS  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
   To the Board of Directors and Stockholders of
             /s/
    DELOITTE &
    TOUCHE LLP     29




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THE
    MANAGEMENT NETWORK GROUP, INC.
  CONSOLIDATED
    BALANCE SHEETS
  January 3,


December 29,2009


2007(In thousands, except share data)ASSETSCURRENT ASSETS:Cash and cash equivalents

$
5,956


$
10,022Short-term investments






17,125Receivables:Accounts receivable


8,247



13,044Accounts receivable  unbilled


4,540



7,80412,787



20,848Less: Allowance for doubtful accounts


(379
)


(562
)Net receivables


12,408



20,286Prepaid and other current assets


1,653



1,763Total current assets


20,017



49,196NONCURRENT ASSETS:Property and equipment, net


1,801



1,784Goodwill


6,240



13,365Licenses and identifiable intangible assets, net


4,842



11,605Non-current investments


13,404Other assets


410



616Total Assets

$
46,714


$
76,566LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Trade accounts payable

$
1,138


$
1,927Accrued payroll, bonuses and related expenses


4,053



5,038Other accrued liabilities


2,907



2,466Income tax liabilities


103



861Deferred revenue


476



3,554Accrued contingent consideration


161



1,616Unfavorable and other contractual obligations


697



1,668Total current liabilities


9,535



17,130NONCURRENT LIABILITIES:Deferred income tax liabilities


115



1,368Unfavorable and other contractual obligations


1,062



1,716Noncurrent borrowings


1,485Other noncurrent liabilities


891



524Total noncurrent liabilities


3,553



3,608Commitments and contingencies (Note 14)STOCKHOLDERS EQUITY:Common stock:Voting  $.001 par value, 100,000,000 shares
    authorized; 36,965,124 (including 2,200,000 treasury shares) and
    36,185,143 (including 200,000 treasury shares) shares issued as
    of January 3, 2009 and December 29, 2007,
    respectively; 34,765,124 and 35,985,143 shares outstanding
    as of January 3, 2009 and December 29, 2007,
    respectively


37



36Preferred stock  $.001 par value,
    10,000,000 shares authorized; no shares issued or
    outstandingAdditional paid-in capital


175,691



172,798Accumulated deficit


(131,706
)


(116,881
)Treasury stock, at cost


(3,545
)


(345
)Accumulated other comprehensive income Foreign currency translation adjustment


(5,735
)


220Loss on investments


(1,116
)Total stockholders equity


33,626



55,828Total Liabilities and Stockholders Equity

$
46,714


$
76,566    30




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THE
    MANAGEMENT NETWORK GROUP, INC.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
  Fifty-Three


Fifty-TwoWeeks Ended


Weeks EndedJanuary 3,


December 29,2009


2007(In thousands, except per share data)Revenues

$
74,042


$
71,875Cost of services (includes net non-cash share-based compensation
    expense of $545 and $302 for the 2008 and 2007 fiscal years,
    respectively)


41,055



38,263Gross Profit


32,987



33,612Operating Expenses:Selling, general and administrative (includes net non-cash
    share-based compensation expense of $1,272 and $1,145 for the
    2008 and 2007, respectively)


30,124



31,723Special Committee investigation






2,560Intangible asset amortization


3,916



3,612Goodwill and intangible asset impairment


14,451Total operating expenses


48,491



37,895Loss from operations


(15,504
)


(4,283
)Interest income


922



1,546Other (expense) income, net


(249
)


452Total other income


673



1,998Loss before income taxes


(14,831
)


(2,285
)Income tax benefit (provision)


6



(52
)Net loss


(14,825
)


(2,337
)Other comprehensive loss:Foreign currency translation adjustment


(5,955
)


(50
)Unrealized loss on marketable securities


(1,116
)Comprehensive loss

$
(21,896
)

$
(2,387
)Net loss per common shareBasic and diluted

$
(0.42
)

$
(0.07
)Weighted average shares used in calculation of net loss per
    share:Basic


35,445



35,868Diluted


35,445



35,868    31




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THE
    MANAGEMENT NETWORK GROUP, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Fiscal Year EndedJanuary 3,


December 29,2009


2007(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(14,825
)

$
(2,337
)Adjustments to reconcile net loss to net cash provided by
    operating activities:Goodwill and intangible asset impairment


14,451Depreciation and amortization


5,386



4,872Share-based compensation


1,817



1,447Deferred taxes


(1,077
)


(882
)Gain on disposal of assets






(82
)Bad debt (recoveries) expense


(227
)


380Realized loss on investments


280Other changes in operating assets and liabilities:Accounts receivable


3,389



(54
)Accounts receivable  unbilled


2,423



(2,552
)Prepaid and other assets


76



1,480Trade accounts payable


(572
)


(322
)Income tax liabilities


(216
)


113Deferred revenue


(2,962
)


(1,299
)Accrued liabilities


(1,653
)


671Net cash provided by operating activities


6,290



1,435CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of short-term investments






(9,325
)Proceeds from maturities/sales of marketable securities


2,325



19,400Acquisition of businesses, net of cash acquired


(5,426
)


(11,011
)Acquisition of property and equipment


(1,059
)


(430
)Disposal of assets






82Net cash used in investing activities


(4,160
)


(1,284
)CASH FLOWS FROM FINANCING ACTIVITIES:Payments made on unfavorable and other contractual obligations


(1,656
)


(1,390
)Purchases of common stock


(3,200
)Borrowings on line of credit


1,485Proceeds from exercise of stock options


26



163Issuance of common stock through employee stock purchase plan


129



71Net cash used in financing activities


(3,216
)


(1,156
)Effect of exchange rate on cash and cash equivalents


(2,980
)


(106
)Net decrease in cash and cash equivalents


(4,066
)


(1,111
)Cash and cash equivalents, beginning of period


10,022



11,133Cash and cash equivalents, end of period

$
5,956


$
10,022Supplemental disclosure of cash flow information:Cash paid during period for taxes, net of refunds

$
1,249


$
165Accrued property and equipment additions

$
17


$
125Supplemental disclosure of non-cash investing and financing
    transactionsAcquisition of business: Common stock

$
922Acquisition of business: Contingent consideration earned

$
1,860    32




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THE
    MANAGEMENT NETWORK GROUP, INC.
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
  Common Stock











Accumulated$.001 Par


Additional








OtherVoting


Paid-In


Accumulated


Treasury


ComprehensiveShares


Amount


Capital


Deficit


Stock


Income


Total(In thousands, except share data)Balance, December 30, 2006


35,989,081


$
36


$
171,117


$
(114,321
)

$
(345
)

$
270


$
56,757Cumulative effect of adopting FIN 48 (Note 7)














(223
)










(223
)Exercise of options


95,906







163















163Employee stock purchase plan


59,146







71















71Non-vested stock grants


111,010Share-base compensation










1,447















1,447Nonvested stock cancellations


(70,000
)Other comprehensive income  Foreign currency
    translation adjustment






















(50
)


(50
)Net loss














(2,337
)










(2,337
)Balance, December 29, 2007


36,185,143



36



172,798



(116,881
)


(345
)


220



55,828Share repurchases


















(3,200
)






(3,200
)Exercise of options


12,775







26















26Employee stock purchase plan


112,732







129















129Share-based compensation










1,817















1,817Common stock issued for acquisitions


654,474



1



921















922Other comprehensive income  Foreign currency
    translation adjustment






















(5,955
)


(5,955
)Other comprehensive income  Loss on investment






















(1,116
)


(1,116
)Net loss














(14,825
)










(14,825
)Balance, January 3, 2009


36,965,124


$
37


$
175,691


$
(131,706
)

$
(3,545
)

$
(6,851
)

$
33,626    33




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    ORGANIZATION
    AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Nature of Operations 
  Principles of Consolidation 
  Name of Subsidiary/Acquisition

Date Formed/AcquiredTMNG Europe Ltd. (TMNG Europe)


March 19, 1997The Management Network Group Canada Ltd. (TMNG
    Canada)


May 14, 1998TMNG.com, Inc.


June 1, 1999TMNG Marketing, Inc.


September 5, 2000TMNG Technologies, Inc.


September 5, 2001Cambridge Strategic Management Group, Inc.


March 6, 2002Cambridge Adventis Ltd.


March 1, 2006Cartesian Ltd. (Cartesian)


January 2, 2007RVA Consulting, LLC (RVA)


August 3, 2007TWG Consulting, Inc. (TWG)


October 5, 2007     Fiscal Year 
  Revenue Recognition No. 81-1, Accounting for Performance of Construction-Type and
    Certain Production-Type Contracts
   34




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THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  81-1 percentage right-to-use
  SOP No. 81-1 percentage-of-completion
  SOP No. 81-1 00-21, No. 00-21 and/or No. 00-21
    Deferred Revenue
  Cash and Cash Equivalents 
  Marketable Securities  Accounting for Certain
    Investments in Debt and Equity Securities.
 35




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THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair Value
    Measurements The Fair Value
    Option for Financial Assets and Financial Liabilities Including
    an amendment of FASB Statement No. 115 other-than-temporary,
  Fair Value Measurement 
  Level 1:
  Level 2:
  Level 3:
    Property and Equipment 
  Research and Development and Capitalized Software
    Costs  Accounting for the Costs of Computer Software to Be
    Sold, Leased, or Otherwise Marketed
 36




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THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Goodwill  Accounting for Goodwill and Intangible
    Assets
    Anticipated future cash flows and terminal value for each
    reporting unit
  Selection of an appropriate discount rate
  Intangible Assets 
  Accounting
    for the Impairment or Disposal of Long-lived Assets
  Income Taxes 
 37




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THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting for Uncertainty in Income Taxes, an
    interpretation of FASB Statement 109 Accounting for
    Income Taxes
    Use of Estimates 
  Foreign Currency Transactions and Translation 
  Share-Based Compensation  Share-Based Payment
  Loss Per Share 
 38




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THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Earnings per Share
  Recent Accounting Pronouncements  157-2, (FSP 157-2) 157-1, (FSP 157-1) FAS 157-3, (FSP 157-3) FAS 157-3 FSP 157-2
     39




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THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      No. FAS 142-3, FAS 142-3). FAS 142-3 FAS 142-3 and/or
 40




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THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2.
    AUCTION
    RATE SECURITIES    Realized





Fair Value atGains


Unrealized


January 3,Issuer

Cost Basis


(Losses)


Losses


2009(In thousands)Trading SecuritiesKentucky Higher Education Loan Revenue Bonds
    A-4

$
1,900


$
(303
)





$
1,597Missouri Higher Education Loan Revenue Bonds


1,800



(287
)






1,513Utah State Board of Regents Revenue Bonds


1,400



(232
)






1,168Access Group Inc. Federal Student Loan Asset Backed Notes


2,050



(216
)






1,834Kentucky Higher Education Loan Revenue Bonds
    A-2


400



(145
)






2557,550



(1,183
)






6,367Available for Sale SecuritiesEducation Funding Capital Education Loan Backed Notes


6,250






$
(1,015
)


5,235Brazos Student Finance Corporation Student Loan Asset Backed
    Notes


1,000







(101
)


8997,250







(1,116
)


6,134ARS Rights






903







903$
14,800


$
(280
)

$
(1,116
)

$
13,404      41




---



##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting for Derivative Instruments and
    Hedging Activities
  available-for-sale available-for-sale other-than-temporary other-than-temporary
    3.
    NONCURRENT
    BORROWINGS   42




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      4.
    BUSINESS
    COMBINATIONS  TWG
    Consulting, Inc.
    true-ups.
    Cash

$
1,660Transaction costs


59Accrued contingent consideration


161Total purchase price

$
1,880  43




---



##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    At
    October 5, 2007
    (Amounts in Thousands)
  Acquired cash

$
576Other current assets


891Customer relationships


300Employment agreements


300Customer backlog


100Total assets acquired


2,167Other current liabilities assumed


305Net assets acquired

$
1,862   RVA
    Consulting, LLC
  true-ups
    Cash paid at closing

$
6,625Transaction costs


247Contingent cash consideration earned


2,292Contingent stock consideration earned (based on share price as
    of June 30, 2008)


921Total purchase price recognized at January 3, 2009


10,085Remaining contingent cash consideration


1,325Remaining contingent stock consideration (based on share price
    as of January 3, 2009)


183Aggregate potential consideration

$
11,593      44




---



##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  true-ups true-ups
    At
    August 3, 2007
    (Amounts in Thousands)
  Acquired cash

$
5,642Other current assets


3,121Furniture, fixtures and equipment


369Customer relationships


3,400Employment agreements


400Customer backlog


2,100Total assets acquired


15,032Deferred revenue


4,575Other current liabilities assumed


2,442Noncurrent liabilities assumed


394Total liabilities assumed


7,411Net assets acquired

$
7,621   Cartesian
    Limited
  true-ups
  Cash paid at closing

$
6,495Transaction costs


534Contingent consideration earned and paid


6,529Total purchase price recognized at January 3, 2009


13,558Contingent cash consideration earned but not yet paid


1,860Aggregate consideration

$
15,418  45




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      At
    January 2, 2007
    (Amounts in Thousands)
  Acquired cash

$
1,787Other current assets


6,421Property, plant and equipment


533Customer relationships


2,368Acquired software


2,961Employment agreements


1,974Customer backlog


395Tradename


395Total assets acquired


16,834Current liabilities assumed


3,332Deferred income tax liabilities recognized


2,428Total liabilities assumed and recognized


5,760Net assets acquired

$
11,074   Pro
    Forma Combined Results
    Fiscal Year EndedDecember 29, 2007(Unaudited)(In thousands, except per shareamounts)Total revenues

$
91,935Net income

$
5,401Basic and diluted net income per common share

$
0.15  46




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    GOODWILL
    AND OTHER INTANGIBLE ASSETS    ManagementConsulting


SoftwareServices


SolutionsSegment


Segment


TotalBalance as of December 29, 2007

$
13,365






$
13,3652008 Cartesian goodwill from earn-out payments, including
    changes in foreign currency exchange rates





$
3,775



3,7752008 RVA goodwill from earn-out payments


2,465







2,4652008 impairment loss


(13,365
)






(13,365
)Balance as of January 3, 2009

$
2,465


$
3,775


$
6,240       January 3, 2009


December 29, 2007Accumulated





AccumulatedCost


Amortization


Cost


AmortizationCustomer relationships

$
5,136


$
(2,072
)

$
6,090


$
(977
)Acquired software


2,170



(1,085
)


2,988



(747
)Employment agreements


1,847



(1,154
)


2,692



(736
)Customer backlog


2,100



(2,100
)


2,598



(1,373
)Tradename


289



(289
)


398



(199
)S3 license agreement










1,500



(629
)Total

$
11,542


$
(6,700
)

$
16,266


$
(4,661
)       EstimatedIntangibleTotal Estimated

Amortization toIntangible

be Included inFuture Period

Amortization

Cost of ServicesFiscal year 2009

$
2,442


$
543Fiscal years 2010  2012


2,400



542    47




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    6.
    SHARE-BASED
    COMPENSATION    Fiscal Year

Fiscal Year2008

2007Risk-free interest rate

2.8%

4.7%Expected life

6.2 years

6.2 yearsExpected volatility factor

60%

64%Expected dividend rate

0%

0%         1998
    EQUITY INCENTIVE PLAN
   48




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    Options
  de facto
      WeightedWeighted


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicShares


Price


Term


ValueOutstanding at December 29, 2007


4,794,341


$
3.47Granted


16,000


$
1.05Exercised


(12,775
)

$
2.10Forfeited/cancelled


(509,491
)

$
2.21Outstanding at January 3, 2009


4,288,075


$
3.62



6.3 years


$
0Options vested and expected to be vested at January 3, 2009


3,727,806


$
3.83



6.0 years


$
0Options exercisable at January 3, 2009


2,782,391


$
4.37



5.3 years


$
0     Nonvested
    Stock
   49




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    WeightedAverageGrant DateShares


Fair ValueOutstanding at December 29, 2007


107,500


$
2.24Vested


(50,625
)

$
2.24Outstanding at January 3, 2009


56,875


$
2.23     2000
    SUPPLEMENTAL STOCK PLAN
      WeightedWeighted


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicShares


Price


Term


ValueOutstanding at December 29, 2007


1,399,736


$
2.58Granted


469,000


$
1.72Forfeited/cancelled


(312,463
)

$
2.50Outstanding at December 29, 2007


1,556,273


$
2.34



7.8 years


$
0Options vested and expected to be vested at December 29,
    2007


1,271,493


$
2.40



7.5 years


$
0Options exercisable at December 29, 2007


573,270


$
2.83



5.9 years


$
0     EMPLOYEE
    STOCK PURCHASE PLAN
   50




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    7.
    BUSINESS
    SEGMENTS, MAJOR CUSTOMERS AND SIGNIFICANT GROUP CONCENTRATIONS
    OF CREDIT RISK     51




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Management





NotConsulting


Software


Allocated toServices


Solutions


Segments


TotalAs of and for the fiscal year ended January 3, 2009:Revenues

$
54,086


$
19,956






$
74,042Income (loss) from operations


17,292



4,347


$
(37,143
)


(15,504
)Interest income










922



922Income (loss) before income tax provision


17,292



4,347



(36,470
)


(14,831
)Depreciation and amortization










5,385



5,385Total assets

$
8,728


$
4,078


$
33,908


$
46,714As of and for the fiscal year ended December 29, 2007:Revenues

$
47,656


$
24,219






$
71,875Income (loss) from operations


17,089



7,646


$
(29,018
)


(4,283
)Interest Income










1,546



1,546Income (loss) before income tax provision


17,089



7,646



(27,020
)


(2,285
)Depreciation and amortization










4,872



4,872Total assets

$
13,372


$
6,914


$
56,280


$
76,566       Revenue


Loss Before Income Tax ProvisionFY


FY


FY


FY2008


2007


2008


2007United States

$
46,096


$
39,610


$
(9,233
)

$
(1,259
)International:United Kingdom


26,163



29,835



(5,241
)


(948
)Germany






745







(24
)Ireland


849



515



(170
)


(16
)Other


934



1,170



(187
)


(38
)Total

$
74,042


$
71,875


$
(14,831
)

$
(2,285
)  52




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    RevenuesFiscal

Fiscal

Accounts ReceivableYear

Year

January 3,

December 29,2008

2007

2009

2007Customer A

$
10,697


$
18,102


$
2,545


$
1,448Customer B

$
21,032


$
9,333


$
2,343


$
2,829       8.
    PROPERTY
    AND EQUIPMENT  January 3,


December 29,2009


2007(In thousands)Furniture and fixtures

$
1,400


$
1,081Software and computer equipment


2,992



3,028Leasehold improvements


1,124



1,2005,516



5,309Less: Accumulated depreciation and amortization


3,715



3,525$
1,801


$
1,784    53




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  9.
    INCOME
    TAXES    Fiscal


FiscalYear


Year2008


2007FederalCurrent tax (expense) benefit

$
(32
)

$
(23
)Deferred tax (expense) benefit


2,868



(1,704
)Change in valuation allowance


(2,868
)


1,704(32
)


(23
)StateCurrent tax (expense) benefit






(80
)Deferred tax (expense) benefit


1,144



(343
)Change in valuation allowance


(1,144
)


343(80
)ForeignCurrent tax (expense) benefit


(1,039
)


(831
)Deferred tax (expense) benefit


841



1,199Change in valuation allowance


236



(317
)38



51Total

$
6


$
(52
)    54




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fiscal Year 2008


Fiscal Year 2007Amount


%


Amount


%Computed expected federal income tax benefit

$
5,191



35.0


$
800



35.0State income tax benefit (expense), net of federal benefit


744



5.0



(275
)


(12.0
)Forfeited vested stock options


299



2.0



(1,222
)


(53.5
)Adjustment to estimated tax loss carryforward


(552
)


(3.7
)


(875
)


(38.3
)Other


(162
)


(1.1
)


(210
)


(9.2
)Foreign tax credit carryforward


(1,738
)


(11.7
)Change in valuation allowance


(3,776
)


(25.5
)


1,730



75.7Total

$
6



0.0


$
(52
)


(2.3
)     Fiscal


FiscalYear


Year2008


2007Goodwill

$
3,964


$
(1,409
)Bad debt reserve


(48
)


86Share-based compensation expense


1,019



(1,617
)Intangible assets


1,734



1,164Valuation allowance


(3,776
)


1,730Net operating loss carryforward


(51
)


1,624Unfavorable liabilities


(634
)


(587
)Cash to accrual conversion


59



59Undistributed foreign earnings


(1,185
)Foreign tax credit carryforward


317Accrued contingent consideration


(353
)Other


31



(168
)Total

$
1,077


$
882  55




---



##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    January 3,


December 29,2009


2007Current deferred tax assets (liabilities):Accounts receivable

$
143


$
201Accrued expenses


195



260Unfavorable liabilities


274



634Cash to accrual conversion


(59
)Valuation allowance


(496
)


(866
)Other


57



(59
)Current deferred tax asset

$
114


$
170Non-current deferred tax assets (liabilities):Goodwill

$
11,677


$
7,713Share-based compensation expense


2,822



1,960Unfavorable lease liability


311



585Net operating loss carryforward


17,514



17,968Intangible assets


1,864



(300
)Accrued contingent consideration






353Cash to accrual conversion


(59
)


(117
)Reserves






40Auction rate securities


561Other


87



278Undistributed foreign earnings


(1,185
)Foreign tax credit carryforward


317Valuation allowance


(34,024
)


(29,848
)Non-current deferred tax liabilities

$
(115
)

$
(1,368
)     Amount


Year$
2,177



20165,602



20239,094



20247,432



20259,854



20265,152



2027957



2028Total

$
40,268    56




---



##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Gross unrecognized tax benefits at December 29, 2007

$
524Gross increases in tax positions for current year


335Interest and penalties


32Gross unrecognized tax benefits at January 3, 2009

$
891   non-U.S. income
 57




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##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  10.
    LEASE
    COMMITMENTS      OperatingFiscal Year

Leases2009

$
2,7982010


2,6562011


1,1412012


1,2492013 and thereafter


255Total minimum lease payments


8,099Future minimum rentals to be received under non-cancellable
    subleases


(1,347
)Minimum lease payments net of amounts to be received under
    subleases

$
6,752     January 3,


December 29,2009


2007Current unfavorable lease obligations

$
681


$
709Non-current unfavorable lease obligations


773



1,475$
1,454


$
2,184     11.
    LOAN TO
    OFFICER    12.
    LETTER OF
    CREDIT   58




---



##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    13.
    RELATED
    PARTY TRANSACTIONS    14.
    COMMITMENTS
    AND CONTINGENCIES      Form 8-K
 59




---



##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   15.
    SHARE
    REPURCHASE PROGRAM        Treasury SharesBalance as of December 29, 2007


200,000Purchases of treasury stock


2,000,000Balance as of January 3, 2009


2,200,000   16.
    STOCKHOLDER
    RIGHTS PLAN    3-year
  17.
    EMPLOYEE
    BENEFIT PLAN   60




---



##### Table of Contents



THE
    MANAGEMENT NETWORK GROUP, INC.
   NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    18.
    SPECIAL
    COMMITTEE INVESTIGATION    19.
    SUBSEQUENT
    EVENTS  Citigroup
    Auction Rate Securities Loan
   61




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES    ITEM 9A(T).
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedure
  Rules 13a-15(e) 15d-15(e)
    Managements
    Report on Internal Control over Financial
    Reporting
  Internal Control 
    Integrated Framework,
      Changes
    in Internal Control over Financial Reporting
    ITEM 9B.
    OTHER
    INFORMATION   62




---



##### Table of Contents



PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Form 10-K,
  ITEM 11.
    EXECUTIVE
    COMPENSATION  Form 10-K,
  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Form 10-K,
  EQUITY
    COMPENSATION PLAN INFORMATION
  (a)





(c)Number of





Number of SecuritiesSecurities to be Issued





Remaining AvailableUpon Exercise of


(b)


for Future IssuanceOutstanding Options


Weighted Average


Under Equity Compensationor Vesting of Nonvested


Exercise Price of


Plans (Excluding SecuritiesStock


Outstanding Options


Reflected in Column (a))(1)PLANS APPROVED BY SECURITY HOLDERS(1) 1998 Equity Incentive Plan


4,344,950


$
3.62



7,921,270PLANS NOT APPROVED BY SECURITY HOLDERS 2000 Supplemental Stock Plan


1,556,273


$
2.34



1,226,521     (1)
    
    The amounts in the table do not include up to 54,691 shares
    that may be purchased under the 1999 Employee Stock Purchase
    Plan.      ITEM 13.
    CERTAIN
    RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE  Form 10-K,
 63




---



##### Table of Contents



ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES  Form 10-K,
 PART IV ITEM 15.  EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Form 10-K:
      Form 10-K.
 64




---



##### Table of Contents



SIGNATURES  10-K
  THE MANAGEMENT NETWORK GROUP, INC.
  By:
    /s/  RICHARD
    P. NESPOLA        POWER OF
    ATTORNEY
  10-K,
  Form 10-K
  Signature

Title

Date/s/  RICHARD
    P. NESPOLARichard
    P. Nespola

Chairman of the Board and Chief Executive Officer (Principal
    executive officer)

April 3, 2009/s/  DONALD
    E. KLUMBDonald
    E. Klumb

Chief Financial Officer and Treasurer (Principal financial
    officer and principal accounting officer)

April 3, 2009/s/  MICKY
    K. WOOMicky
    K. Woo

Director

April 3, 2009/s/  ANDREW
    LIPMANAndrew
    Lipman

Director

April 3, 2009/s/  ROBERT
    J. CURREYRobert
    J. Currey

Director

April 3, 2009/s/  ROY
    A. WILKENSRoy
    A. Wilkens

Director

April 3, 2009/s/  FRANK
    SISKOWSKIFrank
    Siskowski

Director

April 3, 2009  65




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##### Table of Contents



INDEX TO
    EXHIBITS
    ExhibitNumber

Description of Document3
.1

Certificate of Incorporation, filed as Exhibit 3.1 to the
    Companys Registration Statement on
    Form S-1
    originally filed September 20, 1999 (Registration No.
    333-87383), as amended (the 1999 S-1 Registration
    Statement), is incorporated herein by reference as Exhibit
    3.1.3
.2

Certificate of Designations of Series A Junior Participating
    Preferred Stock, as filed with the Secretary of State of
    Delaware on March 27, 2008, filed as Exhibit 3.1 to the
    Companys Current Report on Form 8-K dated March 27, 2008
    filed with the Securities and Exchange Commission, is
    incorporated herein by reference as Exhibit 3.2.3
.3

Amended and Restated By-laws, filed as Exhibit 3.2 to the
    Companys Form 8-K filed with the Securities and Exchange
    Commission on February 13, 2008, is incorporated herein by
    reference as Exhibit 3.3.4
.1

Specimen Common Stock Certificate, filed as Exhibit 4.1 to the
    1999 S-1 Registration Statement, is incorporated herein by
    reference as Exhibit 4.1.4
.2

Registration Rights Agreement, dated February 12, 1998, among
    the Company and certain holders of the Companys common
    stock (the Registration Rights Agreement), filed as
    Exhibit 10.1 to the 1999 S-1 Registration Statement, is
    incorporated herein by reference as Exhibit 4.2.4
.3

Rights Agreement, dated as of March 27, 2008, by and between the
    Company and Computershare Trust Company N.A., filed as Exhibit
    4.1 to the Companys Current Report on Form 8-K dated March
    27, 2008 filed with the Securities and Exchange Commission, is
    incorporated herein by reference as Exhibit 4.3.4
.4

Form of Rights Certificate, filed as Exhibit B to the Rights
    Agreement filed as Exhibit 4.1 to the Companys Current
    Report on Form 8-K dated March 27, 2008, filed with the
    Securities and Exchange Commission, is incorporated herein by
    reference as Exhibit 4.4.10
.1

Registration Rights Agreement. (See Exhibit 4.2).10
.2

Form of Indemnification Agreement between the Company and each
    of its Directors and Officers, filed as Exhibit 10.2 to the 1999
    S-1 Registration Statement, is incorporated herein by reference
    as Exhibit 10.2.(1)10
.3

1998 Equity Incentive Plan, as amended and restated on September
    7, 1999, and the Form of Agreements thereunder, filed as
    Exhibit 10.3 to the 1999 S-1 Registration Statement, is
    incorporated herein by reference as Exhibit 10.3.(1)10
.4

1999 Employee Stock Purchase Plan and Form of Agreements
    thereunder, filed as Exhibit 10.4 to the 1999 S-1 Registration
    Statement, is incorporated herein by reference as Exhibit
    10.4.(1)10
.5

2000 Supplemental Stock Plan and Form of Agreements thereunder,
    filed as Exhibit 10.16 to the Companys Form 10-K for the
    fiscal year ended December 30, 2000, is incorporated herein by
    reference as Exhibit 10.5.(1)10
.6

Employment Agreement between the Company and Richard Nespola,
    dated January 5, 2004, filed as Exhibit 10.19 to the
    Companys Form 10-K for the fiscal year ended January
    3, 2004, is incorporated herein by reference as Exhibit 10.6.(1)10
.7

Sublease between Best Doctors, Inc. and Cambridge Strategic
    Management Group Inc. (formerly TMNG Strategy, Inc.), dated
    December 30, 2004, filed as Exhibit 10.21 to the Companys
    Form 10-K
    for the fiscal year ended January 1, 2005, is incorporated
    herein by reference as Exhibit 10.7.10
.8

Asset Purchase Agreement, dated April 2, 2006, among Wilbass
    Limited, Adventis Limited, and Adventis Corporation, filed as
    Exhibit 10 to the Companys Form 10-Q for the quarter ended
    April 1, 2006, is incorporated herein by reference as Exhibit
    10.8.**10
.9

Share Purchase Agreement, dated December 22, 2006, between the
    Company and Janos Sivo, Alan Strong, William Hill and James
    Baker, regarding the acquisition of the outstanding common stock
    of Cartesian Limited, filed as Exhibit 10.1 to the
    Companys Form 10-Q for the quarter ended September 30,
    2006, is incorporated herein by reference as Exhibit 10.9. 66




---



##### Table of Contents



ExhibitNumber

Description of Document10
.10

Third Amended Lease Agreement between NewTower Trust Company
    Multi-Employer Property Trust and the Company, dated August 30,
    2005, filed as Exhibit 10.10 to the Companys Form 10-K for
    the fiscal year ended December 30, 2006, is incorporated herein
    by reference as Exhibit 10.10.10
.11

Third Additional Space Commencement Date Agreement between
    NewTower Trust Company Multi-Employer Property Trust and the
    Company, dated February 28, 2006, filed as Exhibit 10.11 to the
    Companys Form 10-K for the fiscal year ended December 30,
    2006, is incorporated herein by reference as Exhibit 10.11.10
.12

Membership Interest Purchase Agreement, dated July 30, 2007,
    between the Company and RVA Consulting, LLC, RVA Holdings, LLC,
    Mark Markowitz, Dawn Saitta, and Dale Reynolds, regarding the
    acquisition of all outstanding membership interests in RVA
    Consulting, LLC, filed as Exhibit 10.1 to the Companys
    Form 10-Q for the quarter ended June 30, 2007, is incorporated
    herein by reference as Exhibit 10.12.**10
.13

Stock Purchase Agreement, dated October 5, 2007, between the
    Company and TWG Consulting, Inc. and Marilyn Breitenstein,
    regarding the acquisition of the outstanding common stock of TWG
    Consulting, Inc., filed as Exhibit 2.1 to the Companys
    Form 10-Q for the quarter ended September 29, 2007, is
    incorporated herein by reference as Exhibit 10.13.10
.14

Transition Services Agreement among RVA Consulting, LLC, a
    subsidiary of the Company, and Publicis Selling Solutions, Inc,
    filed as Exhibit 10.1 to the Companys Form 10-Q for the
    quarter ended September 29, 2007, is incorporated herein by
    reference as Exhibit 10.14.10
.15

Lease Agreement between Cartesian Limited and Sun Life Assurance
    Company of Canada (U.K.) Limited, dated November 23, 2000, filed
    as Exhibit 10.1 to the Companys Form 10-Q for the quarter
    ended March 31, 2007, is incorporated herein by reference
    as Exhibit 10.15.10
.16

Fourth Amendment to Lease between NewTower Trust Company
    Multi-Employer Property Trust and the Company, dated July 10,
    2007, filed as Exhibit 10.16 to the Companys Form 10-K for
    the fiscal year ended December 27, 2007, is incorporated herein
    by reference as Exhibit 10.16.10
.17

Employment Agreement dated April 8, 2008 between The Management
    Network Group, Inc. and Donald E. Klumb, filed as
    Exhibit 10.1 to the Companys Current Report on Form 8-K
    filed with the Securities and Exchange Commission on April 11,
    2008, is incorporated herein by reference as Exhibit 10.17.(1)10
.18

The Management Network Group, Inc. 2008 Executive Incentive
    Compensation Plan, filed as Exhibit 10.1 to the
    Companys Current Report on Form 8-K filed with the
    Securities and Exchange Commission on February 25, 2008, is
    incorporated herein by reference as Exhibit 10.18.(1)10
.19

Fifth Amendment to Lease between NewTower Trust Company
    Multi-Employer Property Trust and the Company, dated May 19,
    2008, filed as Exhibit 10.1 to the Companys Form 10-Q for
    the quarter ended June 28, 2008, is incorporated herein by
    reference as Exhibit 10.19.10
.20

Stock Purchase Agreement by and among the Company, Potomac
    Capital International Ltd., Potomac Capital Partners LP,
    Pleiades Investment Partners-R LP, Potomac Capital Management
    LLC, Potomac Capital Management, Inc. and Paul J. Solit dated
    June 11, 2008 filed as Exhibit 10.1 to the Companys Form
    8-K filed with the Securities and Exchange Commission on June
    12, 2008, is incorporated herein by reference as Exhibit 10.20.10
.21

Stock Purchase Agreement by and among Riley Investment Partners
    Master Fund, L.P., Riley Investment Management, LLC., and Bryant
    R. Riley dated June 12, 2008 filed as Exhibit 10.2 to the
    Companys Form 8-K dated June 12, 2008, filed with the
    Securities and Exchange Commission, 2008, is incorporated herein
    by reference as Exhibit 10.21.10
.22

Standstill Agreement by and among the Company, Potomac Capital
    International Ltd., Potomac Capital Partners LP, Pleiades
    Investment Partners-R LP, Potomac Capital Management LLC,
    Potomac Capital Management, Inc. and Paul J. Solit dated June
    11, 2008 filed as Exhibit 10.3 to the Companys Form 8-K
    dated June 12, 2008, filed with the Securities and Exchange
    Commission, is incorporated herein by reference as Exhibit
    10.22. 67




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##### Table of Contents



ExhibitNumber

Description of Document10
.23

Standstill Agreement by and among Riley Investment Partners
    Master Fund, L.P., Riley Investment Management, LLC., and Bryant
    R. Riley dated June 12, 2008 filed as Exhibit 10.4 to the
    Companys Form 8-K dated June 12, 2008, filed with the
    Securities and Exchange Commission, 2008, is incorporated herein
    by reference as Exhibit 10.23.10
.24

Offering Letter Relating to the Auction Rate Securities
    Settlement with The Management Network Group, Inc. dated as of
    October 8, 2008, issued by UBS Financial Services Inc.;
    Acceptance Form filed as Exhibit 99.1 to the Companys Form
    8-K dated November 19, 2008, filed with the Securities and
    Exchange Commission, is incorporated herein by reference as
    Exhibit 10.24.10
.25

Credit Line Account Application and Agreement for Organizations
    and Businesses dated as of November 13, 2008, between The
    Management Network Group, Inc. and UBS Bank USA filed as Exhibit
    99.2 to the Companys Form 8-K dated November 19, 2008,
    filed with the Securities and Exchange Commission, is
    incorporated herein by reference as Exhibit 10.25.10
.26

Addendum to Credit Line Account Application and Agreement dated
    as of November 13, 2008, between The Management Network Group,
    Inc. and UBS Bank USA filed as Exhibit 99.3 to the
    Companys Form 8-K dated November 19, 2008, filed with the
    Securities and Exchange Commission, is incorporated herein by
    reference as Exhibit 10.26.10
.27

Important Notice on Interest Rates and Payments dated as of
    November 13, 2008, between The Management Network Group, Inc.
    and UBS Bank USA filed as Exhibit 99.4 to the Companys
    Form 8-K
    dated November 19, 2008, filed with the Securities and Exchange
    Commission, is incorporated herein by reference as Exhibit 10.27.21
.1

List of subsidiaries of the Company, prepared pursuant to Item
    601(b)(21) of Regulation S-K is attached to this Form 10-K as
    Exhibit 21.1.23
.1

Consent of independent registered public accounting firm is
    attached to this Form 10-K as Exhibit 23.1.24
.1

Power of attorney (see signature page)31
.1

Certification of Chief Executive Officer pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002 is attached to this Form 10-K
    as Exhibit 31.1.31
.2

Certification of Chief Financial Officer pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002 is attached to this Form 10-K
    as Exhibit 31.2.32
.1

Certifications furnished pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002 are attached to this Form 10-K as
    Exhibit 32.1.     (1)
    
    Management contracts and compensatory plans and arrangements
    required to be filed as Exhibits pursuant to Item 15 of
    this report.  **
    
    Portions of this document have been redacted pursuant to a
    Request for Confidential Treatment filed with the Securities and
    Exchange Commission pursuant to
    Rule 24b-2
    under the Securities Exchange Act of 1934, as amended. Redacted
    portions are indicated with the notation [***]. 68