UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-K/A

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Amendment No. 1

|ý                                                                  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|------------------------------------------------------------------ | ----------------------------------------------------------------------------------------
|For the fiscal year ended December 31, 2007                       
|OR                                                                
|o                                                                  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
from                                  to

Commission file number 000-31337

WJ COMMUNICATIONS, INC.(Exact name of registrant as specified in its charter)

|DELAWARE(State or other jurisdiction of incorporation or organization)               |  | 94-1402710(I.R.S. Employer Identification No.)
|------------------------------------------------------------------------------------ |  | ----------------------------------------------
|401 River Oaks Parkway, San Jose, California(Address of principal executive offices) |  | 95134(Zip Code)                               
|(408) 577-6200(Registrant's telephone number, including area code)                  

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange on which RegisteredCommon Stock, $0.01 par value

NASDAQ Global Market


Securities
registered pursuant to Section 12(g) of the Act: None

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes o    No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o    No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter)
is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of the
Form 10-K/A or any amendment to the Form 10-K/A. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

|Large accelerated filer o |  | Accelerated filer o |  | Non-accelerated filer ý (Do not check if a smaller reporting company) |  | Smaller reporting company o
|------------------------- |  | ------------------- |  | --------------------------------------------------------------------- |  | ---------------------------

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). Yes o    No ý

As of July 1, 2007, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of voting stock held
by non-affiliates of the registrant was approximately $60,986,226 (based upon the $1.75 closing price of the common stock as reported by the NASDAQ Global Market on June 29, 2007).
Shares of the registrant's common stock held by each officer and director and each person known to the registrant to own 10% or more of the outstanding voting power of the registrant have been
excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not a determination for other purposes.

As
of March 30, 2008 there were 68,912,032 shares outstanding of the registrant's common stock, $0.01 par value.

DOCUMENTS
INCORPORATED BY REFERENCE: None



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EXPLANATORY NOTE

The sole purpose of this Amendment No. 1 on Form 10-K/A is to amend our Annual Report on Form 10-K for the fiscal
year ended December 31, 2007, which was filed with the Securities and Exchange Commission on March 28, 2008 to timely provide the information required by Part III, Items 10
through 14.

This
report also contains certifications as required by Rule 12b-15 under the Securities Exchange Act of 1934 for amendments. Except as otherwise expressly stated
herein, this Amendment No. 1 on Form 10-K/A does not reflect events occurring after the filing of the original 10-K, or modify or update in any way disclosures
contained in the original Form 10-K.

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PART III

Item 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth information about our directors and executive officers (ages are as of March 31, 2008):

Name

Age

PositionW. Dexter Paine, III

47

Chairman of the BoardBruce W. Diamond

48

President, Chief Executive Officer and DirectorPatrice M. Daniels

47

DirectorAngelos J. Dassios

33

DirectorCatherine P. Lego

51

DirectorJack G. Levin

60

DirectorLiane J. Pelletier

50

DirectorRobert Whelton

68

DirectorR. Gregory Miller

57

Vice President, Chief Financial OfficerRainer N. Growitz

52

Vice President, Finance and SecretaryMark S. Knoch

44

Vice President, OperationsHaresh P. Patel

46

Senior Vice President, Sales and MarketingMorteza Saidi

55

Vice President, Engineering


Directors of the Company

W. Dexter Paine, III,the Chairman of the Board of Directors and a director since January 2000, is a Partner of
Paine & Partners, LLC. Previously Mr. Paine was the co-founder of Fox Paine & Company, LLC and served as President from its inception in 1997 through
2007. Mr. Paine also serves as a director of privately held WireCo WorldGroup Inc., Icicle Seafoods, Inc. and Stable Cayman Holdings Ltd. and on the Board of Managers of
Capital Z Asset Management, LLC. From 1994 until founding Fox Paine, Mr. Paine served as a senior partner of Kohlberg & Company. Prior to joining Kohlberg & Company,
Mr. Paine served as a general partner at Robertson Stephens & Company. Mr. Paine has a B.A. in economics from Williams College.

Bruce W. Diamondwas appointed President, Chief Executive Officer of WJ Communications in June 2005 and has served
as a director since July 2003. Mr. Diamond has the strategic and overall operating responsibility for WJ Communications. From November 2002 to June 2005, Mr. Diamond served as Chief
Operating Officer and Executive Vice President for ZiLOG, Inc., a provider of integrated 8-bit microcontrollers (MCU) and universal remote control solutions. From January
2001 through October 2002 he served as President and Chief Operating Officer for Sipex, Inc., an analog semiconductor company, where he was responsible for day-to-day
operations including development of the optical storage, power and interface products. From October 1997 to December 2000, Mr. Diamond served as Senior Vice President of Operations for
ANADIGICS, Inc., an RF based semiconductor integrated circuit company, where he was responsible for building an industry leading GaAs (Gallium Arsenide) wafer fabrication facility. He also held
various senior positions within National Semiconductor Corporation. Mr. Diamond received his B.S. degree in electrical engineering from the University of Illinois at Champaign-Urbana.

Patrice M. Daniels,a director since May 2006, is currently providing financial consulting services. Previously,
Ms. Daniels was Senior Vice President, Originations, for GE Capital from June 2006 until June 2007. From November 2005 until June 2006, she served as Chief Operating Officer of

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International
Education Corporation, a private post-secondary education company. From its founding in 2001 until 2005, Ms. Daniels was a partner of Onyx Capital
Ventures, L.P., a private equity investment firm. She previously served as Managing Director, Corporate and Leveraged Finance for CIBC World Markets and Bankers Trust Company,
investment-banking firms. Ms. Daniels is a member of the board of directors of Cenveo, Inc. (NYSE:CVO) and serves as a member of the board of directors of CB Richard Ellis
Group, Inc. (NYSE:CBG). She holds a B.S. from the University of California, Berkeley and an M.B.A. from the University of Chicago Graduate School of Business.

Angelos J. Dassios,a director since May 2007, is currently serving as a Director of Paine &
Partners, LLC where as an investment professional he works on a variety of transactions. Prior to joining Paine & Partners, LLC, he was with Fox Paine & Company, LLC
and prior to that Goldman, Sachs & Co. in the Investment Banking Division and the Principal Investment Area. He is a graduate of Dartmouth College and currently serves on the Board of
Directors of privately held Stable Cayman Holdings Ltd.

Catherine P. Lego,a director since October 2004, is currently Managing Partner of The Photonics Fund which is
focused on investing in early stage component, module and systems companies in the fiber optic telecommunications market since December 1999. Ms. Lego also serves on the Board of Directors of
SanDisk Corporation (NasdaqGS:SNDK) and LAM Research Corporation (NasdaqGS:LRCX). Prior to forming The Photonics Fund, Ms. Lego provided consulting services to early stage electronic companies
at Lego Ventures and was a General Partner at Oak Investment Partners. Prior to Oak Investment Partners, Ms. Lego was a CPA with Coopers and Lybrand. She received her M.S. from NY University
School of Business and her B.A. from Williams College.

Jack G. Levin,a director since July 2004, was previously the Chief Operating Officer with Fox Paine &
Company, LLC from February 2004 through March 2005. Prior to joining Fox Paine & Company, LLC, Mr. Levin was a founder and served as a managing member of Kalkhoven, Pettit
and Levin Ventures, LLC, a venture capital firm focused on the fiber optic and telecommunications industry since 2001. Previously, Mr. Levin was a partner of, and Director of Legal and
Regulatory Affairs for Montgomery Securities. During his 17 years at Montgomery Securities (and it's successor firm, Banc of America Securities, LLC), Mr. Levin was an active
member of the investment banking commitment
committee, the investment committees of the firm's venture capital partnerships and the managing partner of MontWest Capital Partners, a joint venture of Montgomery Securities and Westinghouse
Financial Corporation, established to do leveraged buyouts. Mr. Levin attended Amherst College (A.B., Political Science, Cum Laude, John Woodruff Simpson Fellowship Award, 1969) and the
Columbia University School of Law, (J.D., Harlan Fiske Stone Scholar, 1973). Mr. Levin is a retired member of the Bar of the State of New York.

Liane J. Pelletier,a director since October 2003, serves as Chairwoman, Chief Executive Officer and President of
Alaska Communications Systems Group Inc. (NasdaqGM: ALSK). Prior to joining Alaska Communications Systems Group in October 2003, Ms. Pelletier was with Sprint Corporation for
17 years. Before joining Sprint, Ms. Pelletier worked as a consultant at Touche Ross and Temple, Barker, Sloane. Ms. Pelletier has an M.S. in Management from the Sloan School at
M.I.T. and a B.A. in Economics from Wellesley College.

Robert Whelton,a director since February 2006, served as Executive Vice President of Operations for
Micrel, Inc. (NasdaqGS:MCRL), a leading manufacturer of integrated circuit solutions for the worldwide analog, ethernet and high bandwidth markets until November 2007. Prior to joining Micrel
in January 1998, Mr. Whelton was the Executive Vice President of Operations for Micro Linear Corp., a fabless semiconductor company. Prior to joining Micro Linear Corp., he was employed by
National Semiconductor Corp., where he served as Vice President of the Analog division. Mr. Whelton received his B.S.E.E. from the University of California, Berkeley and his M.S.E.E. from the
University of Santa Clara.

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Executive Officers of the Company

Bruce W. Diamondwas appointed President and Chief Executive Officer of WJ Communications in June 2005.
Mr. Diamond's previous work experience is described above.

R. Gregory Millerwas appointed Vice President and Chief Financial Officer of WJ Communications in April 2006.
Mr. Miller is responsible for finance and accounting, investor relations and corporate development. Mr. Miller served most recently as Vice President and Chief Financial Officer of
California Micro Devices Corporation (NasdaqGM:CAMD), a leading supplier of application-specific analog semiconductor products. Prior to that, he served as Chief Financial Officer at Summit
Microelectronics, Inc. He has also held senior financial positions at LSI Logic Corporation (NYSE:LSI),
National Semiconductor Corporation (NYSE:NSM), and Texas Instruments, Inc. (NYSE:TXN). Mr. Miller received his B.S.E. degree from the University of Michigan. He holds two Master's
degrees, one in Business Administration from Duke University and another in Engineering from the University of Michigan. He is also a certified public accountant.

Rainer N. Growitzserves as our Vice President Finance and Secretary. Mr. Growitz was appointed Vice
President Finance and Secretary following our recapitalization merger in January 2000 and is responsible for corporate financial planning and forecasting for WJ Communications. From 1997 until January
2000, Mr. Growitz served as Director of Finance. He joined WJ Communications in 1978 and has held a variety of finance, contracts and managerial positions. Mr. Growitz received a B.S. in
Accounting from San Jose State University.

Mark S. Knochwas appointed Vice President of Operations of WJ Communications in August of 2005 and is responsible
for overseeing the manufacturing of RF semiconductor and RFID products. Prior to joining WJ Communications, Mr. Knoch was Vice President of Operations at ZiLOG, Inc. ("ZiLOG") where he
was responsible for all manufacturing and supply chain activities. While at ZiLOG, he also served as President of ZiLOG's manufacturing facility in the Philippines. Prior to joining ZiLOG in 2004, he
served as Vice President, Supply Chain for Sipex, Inc., an analog semiconductor company, where he managed the supply chain and order fulfillment from 2001 to 2004. Mr. Knoch also held
senior planning and operations positions at ANADIGICS, Inc., American Microsystems Incorporated, and Advanced Micro Devices. Mr. Knoch received his B.S. in Electrical Engineering from
Kansas State University.

Haresh P. Patelwas appointed Senior Vice President of Sales and Marketing of WJ Communications in October 2005.
Previously, Mr. Patel served as Vice President of Worldwide Sales and Marketing at Agilent Technology's Semiconductor Division. Prior to joining Agilent Technology in 2000, Mr. Patel was
with PMC-Sierra Inc. a leader in datacom, telecom and storage semiconductor products where he served as Vice President of Worldwide Sales beginning in 1997. Mr. Patel has
also held various sales and product management positions at Hyundai, Fujitsu, and Texas Instruments. He received his B.S. degree in Electrical Engineering from the University of Notre Dame.

Morteza Saidiwas appointed Vice President of Engineering of WJ Communications in January 2006. Mr. Saidi
is responsible for directing and managing the engineering groups within the Company including developing new technologies and new products for the wireless and RFID markets. From 2004 to 2006 he
served as founder and Chief Executive Officer of S-Communications, a fabless semiconductor company. Prior to that Mr. Saidi served as a consultant for PCI Communications from 2003
to 2004. Previously, Mr. Saidi co-founded Resonext Communications in 2000 and where he served as Chief Technology Officer and Vice President of RF and Analog until the company was
acquired by RF Micro Devices in December 2002. Previously, he was the director of RF development at VLSI Technology. In addition, Mr. Saidi has held a number of management positions with
Philips Semiconductor, has published a number of articles in the technical journals, and has assisted in filing

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30
patents. Mr. Saidi received both his Bachelor of Science degree and Masters of Science in Electrical Engineering from the University of Michigan.

Audit Committee and Audit Committee Financial Expert

The Audit Committee is currently composed of directors Daniels, Lego and Whelton. The Board of Directors has determined that Ms. Daniels, Ms. Lego
and Mr. Whelton are "independent directors" as that term is defined in Rule 4200(15) of the Nasdaq Marketplace Rules. Our Board of Directors has determined that Ms. Lego qualifies
as an "audit committee financial expert" as such term is defined in Item 401(h) of Regulation S-K. Shareholders should understand that this designation is a disclosure
requirement of the SEC related to Ms. Lego's experience and understanding with respect to certain accounting and auditing matters. The designation does not impose on Ms. Lego any duties,
obligations or liability that are greater than are generally imposed on her as a member of the Audit Committee and Board of Directors, and her designation as an audit committee financial expert
pursuant to this SEC requirement does not affect the duties, obligations or liability of any other member of the Audit Committee or Board of Directors.

Section 16(a) Beneficial Ownership Reporting Compliance

For the fiscal year ended December 31, 2007, we believe, based solely on a review of Forms 3, 4 and 5 (including amendments) with which we have been
furnished, that all filings required pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, relating to us were timely made.

Code of Ethics

We have adopted a written code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer and
controller, responsive to Section 406 of the Sarbanes-Oxley Act of 2002 and the rules of the SEC. A copy of our code of ethics which is captioned "Senior Financial Officer Code of Business
Conduct and Ethics Policy" is posted and publicly available on our internet website atwww.wj.com. This website address is intended to be an inactive,
textual reference only; none of the material on this website is part of this report. If there are any amendments to or waivers, of the code of ethics, we intend to promptly disclose the nature of any
such amendment or waiver on our website.

Item 11.    EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

This section discusses the principles underlying our executive compensation policies and decisions and the most important factors relevant to an analysis of these
policies and decisions. It provides qualitative information regarding the manner and content in which compensation is awarded to and earned by our executive officers and places in perspective the data
presented in the tables and narrative that follow.

The
Compensation Committee (the "Committee") of the Board of Directors (the "Board") has principal responsibility to evaluate, recommend, approve and review executive officer
compensation arrangements, plans, policies and programs maintained by the Company, and to administer the Company's cash-based and equity-based compensation plans. The Committee's goal is
to ensure that the total compensation paid to our executive officers, including our Chief Executive Officer and our Chief Financial Officer, is fair, reasonable and competitive.

Our
compensation program for executive officers is designed to attract, as needed, individuals with the skills necessary for us to achieve our business plan, to motivate those
individuals, to reward those

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individuals
fairly over time, and to retain those individuals who continue to perform at or above the levels that we expect. It is also designed to link rewards to measurable company and individual
performance when possible.



Our compensation philosophy is simple: we have a competitive total rewards program aimed at attracting, retaining and motivating "A" players. We also believe in
utilizing performance based measures to align the employee incentives with long-term shareholder value creation.

The
Committee believes that the most effective executive compensation program is one that is designed to reward the achievement of specific semi-annual, long-term
and strategic goals by the Company, and one that aligns executives' interests with those of the shareholders by rewarding performance that meets or exceeds established goals, with the ultimate
objective of improving shareholder value. The Committee evaluates both performance and compensation to ensure that the Company maintains its ability to attract and retain superior employees in key
positions and that compensation provided to key employees remains competitive relative to the compensation paid to similarly situated executives of our peer companies. Our executive officers'
compensation currently has three primary components(i) base compensation or salary, (ii) semi-annual cash bonuses under a performance-based, non-equity
incentive plan, and (iii) equity awards in the form of performance-accelerated restricted stock unit awards ("PARSUs") granted pursuant to our Amended and Restated 2000 Stock Incentive Plan. We
fix executive officer base compensation at a level we believe enables us to hire and retain individuals in a competitive environment and to reward satisfactory individual performance and a
satisfactory level of contribution to our overall business goals. We also take into account the base compensation that is payable by companies that we believe to be our competitors and by other
private and public companies with which we believe we generally compete for executives. To this end, with the help of Radford Consulting, an outside human resources consulting firm, we access a number
of executive compensation surveys and other databases and review them when making critical executive officer hiring decisions and annually when we review executive compensation. We designed our
executive bonus plan to focus our management on achieving key company financial objectives, to motivate certain desired individual behaviors and to reward substantial achievement of these company
financial objectives and individual goals. We utilize cash bonuses to reward performance achievements with a time horizon of one year or less and we utilize salary as the base amount necessary to
match our competitors for executive talent. In 2006 and 2007, we utilized PARSUs to reward long-term performance, with excellent company performance and extended officer tenure producing
potentially significant incentive value for the officer. In July 2006, based on the recommendation of Radford Consulting, we determined that PARSUs would be our primary method for delivery of equity
compensation in the future.

We
view the foregoing components of compensation as related but distinct. Although the Committee does review total compensation, we do not believe that significant compensation derived
from one component of compensation should negate or reduce compensation from other components. We determine the appropriate level for each compensation component based in part, but not exclusively, on
competitive benchmarking consistent with our recruiting and retention goals, our view of internal equity and consistency, and other considerations we deem relevant, such as rewarding extraordinary
performance. We believe that, as is common in the technology sector, equity is the primary compensation-related motivator in attracting and retaining employees and that salary and bonus levels are
secondary considerations to most employees. Except as described below, we have not adopted any formal or informal policies or guidelines for allocating compensation between long-term and
currently paid out compensation, between cash and non-cash compensation, or among different forms of non-cash compensation. However, our Committee's philosophy is to make a
greater percentage of an employee's compensation performance-based as he or she becomes more senior and to keep cash compensation at a reasonable competitive level while also providing the opportunity
to be well rewarded through equity if the company performs well over time.

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The Committee's current intent is to perform an annual strategic review of our executive officers' compensation to determine whether they provide adequate incentives and motivation to
our executive officers and whether they adequately compensate our executive officers relative to comparable officers in other companies with which we compete for executives. These companies may or may
not be public companies or even in all cases technology companies. The Committee's most recent review occurred in July 2007. Committee meetings typically have included, for all or a portion of each
meeting, not only the Committee members but also our Chief Executive Officer and our Director of Human Resources. The Committee makes all compensation decisions (including the establishment of salary
and bonus levels and the award of bonus and equity grants) for the executive officers. As required under NASDAQ rules, the Chief Executive Officer does not participate in the deliberation and approval
process with respect to his compensation. The Chief Executive Officer and Director of Human Resources annually review the performance of each executive officer (other than the Chief Executive Officer
whose performance is reviewed by the Committee). The conclusions reached and recommendations based on these reviews, including those with respect to salary adjustments and annual award amounts, are
presented to the Committee. The Committee exercises its discretion in accepting or modifying any recommended adjustments or awards to executives.

We
account for equity compensation paid to our executives and employees under the rules of SFAS No. 123R, which require us to estimate and record an expense over the service
period of the award. Accounting rules also require us to record cash compensation as an expense at the time the obligation is accrued. Unless and until we achieve sustained profitability, the
availability to us of a tax deduction for compensation expense will not be material to our financial position. We structure cash bonus compensation so that it is taxable to our executives at the time
it becomes available to them. We currently intend that all cash compensation paid will be tax deductible for us. With respect to equity compensation awards, any gain recognized by employees from
nonqualified options should be deductible. However, to the extent that an option constitutes an incentive stock option gain recognized by the optionee, it will be deductible if there is a
disqualifying disposition by the optionee. In addition, if we grant restricted stock or restricted stock unit awards that are not subject to performance vesting, they may not be fully deductible by us
at the time the award is otherwise taxable to the employee.



Based on the foregoing objectives, the Committee has structured the Company's annual and long-term incentive-based cash and non-cash
executive compensation to motivate executives to achieve the business goals set by the Company and reward the executives for achieving such goals. In 2006, the Committee retained Radford Consulting to
conduct a thorough
review of our total compensation program for executives. Radford Consulting provided the Committee with relevant market data and alternatives to consider when making compensation decisions for all
executives. In 2007, the Committee determined that it would not make changes to the executives' base salary and cash bonus programs and therefore elected not to incur the expense associated with
Radford Consulting updating their prior study and guidelines.

In
making compensation decisions, the Committee compares each element of total compensation against a peer group of publicly-traded companies (collectively, the "Compensation Peer
Group"). The Compensation Peer Group companies were selected based on companies against which the Committee

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believes
the Company competes for talent and for shareholder investment. The companies comprising the Compensation Peer Group are:

Actel Corporation
Anadigics Inc.
California Micro Devices Corp.
Conexant Systems Inc.
Hi/Fn Inc.
Linear Technology Corp.
Micrel Inc.
Pericom Semiconductor Corp.
Pixelworks Inc.
RF Micro Devices Inc.
Sirenza Microdevices Inc.
Transmeta Corp
TriQuint Semiconductor Inc.
Zhone Technologies Inc.

Adept Technology Inc.
Broadcom Corp.
Cirrus Logic Inc.
Freescale Semiconductor Inc.
Integrated Device Technology Inc.
Maxim Integrated Products
National Semiconductor Corp.
Philips Semiconductors Inc.
Quicklogic Corp
Silicon Laboratories Inc.
Texas Instruments Inc.
Transwitch Corp
Vitesse Semiconductor Corp


For
comparison purposes, our annual revenues are in the bottom quartile of the Compensation Peer Group. The large variance in size among the companies comprising the Compensation Peer
Group is taken into account.

The
Committee attempts to establish executive officers' base salaries, annual bonus levels, and equity grants at levels between the 50 th and 75 th percentile of our Compensation Peer
Group of executives with similar roles at our Compensation Peer Group. The Committee believes that the 50 th percentile for base salaries is the lowest possible cash compensation level that would
allow a company of our size to competitively attract and retain talented officers. The Committee realizes that using a benchmark may not always be appropriate but believes that it is the best
alternative at this point in the life cycle of the Company. In instances where an executive officer is uniquely key to our success, the Committee may provide compensation in excess of these
percentiles. The Committee's judgments with regard to market levels of base compensation and aggregate equity holdings were based on a report obtained from Radford Consulting. The Committee's choice
of the foregoing percentiles to apply to the data in the report reflected consideration of our shareholders' interests in paying what was necessary, but not significantly more than necessary, to
achieve our company goals, while conserving cash and equity as much as practicable. The Committee believes that, given the industry in which we operate and the company culture that we have created,
base compensation and equity at these percentage levels are generally sufficient to retain our existing executive officers and to hire new executive officers when and as required. Variations to this
objective may occur as dictated by the experience level of the individual and market factors. These objectives recognize the Committee's expectation that, over the long term, the Company should be in
a position to generate shareholder returns in excess of the average of its Compensation Peer Group.



Our Chief Executive Officer and our other executive officers each have annual target bonus opportunities set forth in their respective employment agreements of up
to a certain percentage of their current annual base salary, based on achievement of certain financial or other Company objectives. With respect to the Chief Executive Officer, the target bonus
opportunity is up to 100% of his current annual base salary and with respect to the other named executive officers, the target bonus opportunities range from 60% to 35% of annual base salary depending
upon the individual's employment agreement with the Company. The dollar amounts of bonuses earned by our named

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executive
officers under our 2007 bonus plan described below is set forth in the Summary Compensation Table for 2007 under "Non-Equity Incentive Plan Compensation".

The
Company maintained a cash bonus plan for fiscal 2007 (the "2007 Bonus Plan"), under which its employees, including the executive
officers referenced above, were eligible for cash bonus awards. Bonus targets were established by our Committee based on the Company's achievement of specified company performance. The 2007 Bonus Plan
established performance targets that ranged from 50% of the eligible bonus to 150% of the eligible bonus. Performance relative to the first half of 2007 Bonus Plan objectives resulted in no bonus
payout. In July 2007, the Committee established a modified plan which covered the full fiscal year with similar features to the plan for the first half of 2007 except that it covered the full fiscal
year. For the modified 2007 Bonus Plan established in July, the Company did not achieve the objectives which also resulted in no bonus payout.

During
2006 and 2007 the Company objectives included revenue, number of new products introduced, design wins and earnings before interest, taxes and depreciation and amortization
("EBITDA"). Performance is scored on a linear scale between the 50%, 100% and 150% points and then weighted based on a weighting factor to determine one overall Company performance factor. Any
performance below the 50% goal is scored at a zero percent attainment and any scoring above the 150% goal is limited to a score of one hundred and fifty percent attainment before weighting. If the
overall weighted score is below 50%, the Company performance is scored at a zero percent and there is no incentive earned during the period. In addition, the 2007 Bonus Plan included a provision that
EBITDA had to be greater than $100,000 after accrual of the bonus for there to be a payout under the plan.

The
Company expects to continue a semi-annual cash bonus plan for 2008 (the "2008 Bonus Plan"), under which its executive
officers referenced above, will be eligible for cash bonus awards. The Committee may, at its discretion, award a bonus or adjust a bonus award. The Committee has established bonus targets for the
first half of 2008 based on specified Company objectives similar to those under the 2007 Bonus Plan. In the event that the merger with TriQuint Semiconductor is successfully completed prior to the end
of the first fiscal half of 2008, the Committee is planning to assess the performance against the 2008 Bonus Plan on a pro-rated basis to determine if there will be payouts against the
2008 Bonus Plan.



We have granted awards to our executives under the Amended and Restated 2000 Stock Incentive Plan. The Amended and Restated 2000 Stock Incentive Plan gives the
Committee the latitude to design stock-based incentive compensation to promote a high level of performance and achievement of company objectives and encourage the growth of shareholder value.

The
Company's equity awards program enables the Company to:



The
Company historically used time-based stock options as its primary equity incentive. On occasions, these stock options were supplemented by restricted stock or stock options that were
performance-based. Performance criteria were based on Company performance targets such as EBITDA, revenue and stock price and individual performance targets. The exercise price for all equity option
grants was the average price of the Company's common stock on the NASDAQ Global Market on the grant date unless the NASDAQ is closed for trading on that date; the average price shall be the average
price on

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the
next trading day. The average price is calculated as a simple average of the high and low prices for the trading day.

In
August 2006, our Committee, following consultation with Radford Consulting, determined that going forward the Company would grant primarily PARSUs, rather than stock options and/or
restricted stock. This determination was made based upon review of data provided by Radford Consulting regarding industry practice and market data. All employees are eligible for PARSUs. Generally,
our PARSUs provide the holder the right to receive a designated number of shares of our common stock on or shortly after the fourth annual anniversary of the date of grant if the holder has remained
employed with us through such time and the opportunity to receive on an accelerated basis a portion of such shares (not to exceed 18.75% of the total shares subject to the PARSU) at the end of each
fiscal six month period to the extent certain performance objectives are achieved for such period and remains employed by the Company at such time. If the holder is employed at the end of four years,
vesting of the PARSU would occur regardless of whether the performance specifications have been satisfied. In 2007, the performance acceleration criteria were based on attainment of company
objectives. Similar to the cash bonus plan, the performance acceleration criteria included: revenue, EBITDA, new products, and design wins which were weighted to determine one overall performance
figure for each performance period. At the end of each fiscal six month period, our Committee will evaluate and determine whether the Company has achieved its company objectives.

In
May 2007, the Committee recognized the special contribution that our Vice President of Engineering had made and was making to the increased rate of new products being developed by the
Company with a special PARSU award of 65,000 restricted stock units. In July 2007, the Committee, as part of its
annual compensation review, reviewed and made PARSU awards to the executives and our exempt employees. Similar to the prior year, the Committee granted these awards full participation in the second
half 2007 PARSU performance period. In October, following announcement of our evaluation of strategic alternatives, as part of their overall evaluation of retention during this period, awarded our
Vice President of Finance a special PARSU award of 15,000 restricted stock units and our Vice President of Engineering 75,000 restricted stock units.

During
2007, there were two performance periods under the PARSU agreements which represented the first half and second half of the fiscal year respectively. Performance relative to the
objectives for the first half of 2007 resulted in an aggregate 98.4% attainment and the vesting of 83,697 common shares to the executives and 123,840 shares to all other employees and for the second
half of 2007 resulted in an aggregate 57.6% attainment and the vesting of 120,182 common shares to the executives and 142,420 shares to all other employees. The Committee ratified the number of shares
vested for each performance period. The "Number of Shares Acquired on Vesting" in the Option Exercises and Stock Vested for 2007 table, includes the vesting of these PARSUs.

Awards
are expected to be made in 2008 based on similar Company objectives and weighting criteria.



The Company does not have a formal written policy regarding timing of equity grants. However no equity grants were timed on the release or non-release
of material non-public information.



We have entered into employment, termination of employment and change-in-control arrangements with the following executive officers, which
are summarized below.

11

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On June 28, 2005, the Company entered into an employment agreement with Mr. Diamond, the Company's President and Chief Executive Officer.

The
material terms of the employment agreement included the following: (i) Mr. Diamond's annual base salary will be $350,000. The annual base salary may be increased in the
years following the first anniversary of the effective date, but may not be decreased; (ii) beginning in fiscal year 2006, Mr. Diamond is eligible for an annual bonus target opportunity
of one-hundred percent (100%) of his current annual base salary, of which fifty percent (50%) is based on achievement of defined financial performance objectives and fifty percent (50%) is
based on defined major business objectives as determined by the Compensation Committee; (iii) an annual bonus target opportunity for the fiscal year ending December 31, 2005 of fifty
percent (50%) of annual base salary is based on defined objectives but will not be less than $50,000 if Mr. Diamond remains employed through December 31, 2005; and (iv) a grant of
1,000,000 shares of restricted common stock at a purchase price equal to the par value of the common stock of $0.01 per share of which 500,000 shares are Time-Vested Restricted Stock and
vest over 36 months and 500,000 shares of Performance-Vested Restricted Stock which shall vest conditioned upon the satisfaction of certain performance targets and objectives to be determined
by the Company with the performance period for such award to be not more than two (2) years or in the case of performance criteria conditioned on appreciation in the value of the Company's
common stock, the price targets designated by the Company.

Mr. Diamond's
employment agreement also provided for other benefits including the right to participate in fringe benefit plans, life and disability insurance plans, expense
reimbursement, reimbursement for documented supplemental life insurance, tax preparation and planning, and vacation in accordance with the Company's top management vacation policy.

Pursuant
to the employment agreement, if the Company terminates Mr. Diamond's employment other than for cause or disability or if Mr. Diamond terminates his employment with
the Company for good reason, and Mr. Diamond's employment is not terminated automatically as a result of his death, the Company will pay him an amount equal to one hundred fifty percent of his
annual base salary as in effect immediately prior to the termination of the employment period and eighteen months accelerated vesting with respect to any outstanding, unvested time-vested
restricted stock and reimbursement for premiums paid for continued health benefits for Mr. Diamond and his dependents
under the Company's health plans for eighteen months following the termination of his employment with the Company. Notwithstanding the preceding sentence, the severance benefit shall be computed as an
amount equal to two hundred ninety-nine percent of his annual base salary as in effect immediately prior to the termination of the employment period, full vesting with respect to any
outstanding, unvested time-vested restricted stock and performance-vested restricted stock and reimbursement for premiums paid for continued health benefits for Mr. Diamond and his
dependents under the Company's health plans for thirty-six months with such amounts to be paid within thirty days of the date of such termination, in each case solely in a circumstance in
which there is a termination of Mr. Diamond's employment within three months prior to or nine months following the occurrence of a change in control either by the Company other than for cause
or by him with good reason.

Mr. Diamond
was granted PARSUs on August 10, 2006 and July 30, 2007 for 366,300 and for 256,410 shares respectively of our common stock that will accelerate and
become fully vested upon change in control of the Company.

12

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Effective April 10, 2006, the Company entered into an employment agreement with R. Gregory Miller for the position of Vice President and Chief Financial
Officer of the Company. The employment agreement is effective for three years with automatic one-year extensions thereafter unless advance written notice of an intention not to extend the
term is provided by either the Company or Mr. Miller.

Under
the employment agreement, Mr. Miller is entitled to receive an annual base salary of $230,000 and is eligible to participate in the Company's discretionary cash bonus plan
based on appropriate business and financial targets and individual objectives. Mr. Miller received a stock option grant of 500,000 shares of the Company's common stock which vests over four
years and a stock option grant of 180,000 shares of the Company's common stock which vests conditioned on the satisfaction of certain performance targets and objectives. Mr. Miller also
received a time vested restricted stock grant of 10,000 shares of the Company's common stock which vested upon the one year anniversary of his employment on April 10, 2007. Mr. Miller's
employment agreement also provides for other benefits including the right to participate in fringe benefit plans, life and disability insurance plans, expense reimbursement, reimbursement for tax
preparation and planning, and vacation in accordance with the Company's top management vacation policy.

Pursuant
to the employment agreement, if the Company terminates Mr. Miller's employment other than for cause or disability or if Mr. Miller terminates his employment with
the Company for good reason, and Mr. Miller's employment is not terminated automatically as a result of his death, the Company will pay him an amount equal to one hundred percent of his annual
base salary. Not withstanding the preceding sentence, the Company is obligated to pay Mr. Miller an amount equal to one hundred fifty percent of his annual base salary and the time vested stock
option for 500,000 shares of common stock will accelerate and become fully vested, solely in a circumstance in which there has occurred a change in control (as such term is defined in his option
agreement) within six months prior to any termination for good reason or by the Company other than for cause.

Mr. Miller
was granted PARSUs on August 10, 2006 and July 30, 2007 for 98,000 and for 300,000 shares respectively of our common stock that will accelerate and become
fully vested upon change in control of the Company.



Effective January 31, 2000, the Company entered into an employment agreement with Mr. Growitz for the position of Vice President of Finance. The
employment agreement was initially effective for a period of three years and it provides automatic one-year extensions thereafter unless advance written notice of an intention not to
extend the term is provided by either the Company or Mr. Growitz.

Under
the employment agreement, Mr. Growitz is entitled to receive an annual base salary of $167,200 and is eligible to participate in the Company's discretionary cash bonus plan,
up to a maximum of 35% of base salary, based on appropriate business and financial targets and individual objectives. Mr. Growitz's employment agreement also provides for other benefits
including the right to participate in fringe benefit plans, life and disability insurance plans, expense reimbursement, reimbursement for tax preparation and planning, and vacation in accordance with
the Company's top management vacation policy.

Pursuant
to the employment agreement, if the Company terminates Mr. Growitz's employment other than for cause or disability or if Mr. Growitz terminates his employment with
the Company for good reason, and Mr. Growitz's employment is not terminated automatically as a result of his death, the Company will pay him an amount equal to one hundred percent of his annual
base salary. Not withstanding the preceding sentence, the Company is obligated to pay Mr. Growitz an amount equal to one hundred fifty percent of his annual base salary solely in a circumstance
in which there has occurred

13

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a
change in control within three months prior to any termination for good reason or by the Company other than for cause.

Mr. Growitz
was granted PARSUs on August 10, 2006, July 30, 2007 and October 30, 2007 for 31,500, 30,000 and 15,000 shares respectively of our common stock
that will accelerate and become fully vested upon change in control of the Company.



Effective October 24, 2005, the Company entered into an employment agreement with Haresh Patel for the position of Senior Vice President of Sales and
Marketing of the Company. The employment agreement is effective for a period of three years with automatic one-year extensions thereafter unless advance written notice of an intention not
to extend the term is provided by either the Company or Mr. Patel.

Under
the employment agreement, Mr. Patel is entitled to receive an annual base salary of $245,000 and will be eligible to participate in the Company's discretionary cash bonus
plan based on appropriate business and financial targets and individual objectives. Mr. Patel received a stock option grant of 500,000 shares of the Company's common stock which will vest over
four years and a stock option grant of 200,000 shares of the Company's common stock which shall vest conditioned on the satisfaction of certain performance targets and objectives. Mr. Patel's
employment agreement also provides for other benefits including the right to participate in fringe benefit plans, life and disability insurance plans, expense reimbursement, reimbursement for tax
preparation and planning, and vacation in accordance with the Company's top management vacation policy.

Pursuant
to the employment agreement, if the Company terminates Mr. Patel's employment other than for cause or disability or if Mr. Patel terminates his employment with the
Company for good reason, and Mr. Patel's employment is not terminated automatically as a result of his death, the Company will pay him an amount equal to one hundred percent of his annual base
salary. Not withstanding the preceding sentence, the Company shall pay Mr. Patel an amount equal to one hundred fifty percent of his annual base salary and the time vested stock option for
500,000 shares of common stock will accelerate and become fully vested, solely in a circumstance in which there has occurred a change in control (as such term is defined in his option agreement)
within six months prior to any termination for good reason or by the Company other than for cause.

Mr. Patel
was granted PARSUs on August 10, 2006 and July 30, 2007 for 45,500 and for 120,000 shares respectively of our common stock that will accelerate and become
fully vested upon change in control of the Company.



Effective January 16, 2006, the Company entered into an employment agreement with Morteza Saidi for the position of Vice President of Engineering for the
Company. The employment agreement is effective for three years with automatic one-year extensions thereafter unless advance written notice of an intention not to extend the term is
provided by either the Company or Mr. Saidi.

Under
the employment agreement, Mr. Saidi is entitled to receive an annual base salary of $225,000 and will be eligible to participate in the Company's discretionary cash bonus
plan based on appropriate business and financial targets and individual objectives. Mr. Saidi received a stock option grant of 540,000 shares of the Company's common stock which will vest over
four years and a stock option grant of 180,000 shares of the Company's common stock which shall vest conditioned on the satisfaction of certain performance targets and objectives. Mr. Saidi
also received a time vested restricted stock grant of 10,000 shares of the Company's common stock which vested upon the one year anniversary of his employment on January 16, 2007.
Mr. Saidi's employment agreement also provides

14

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for
other benefits including the right to participate in fringe benefit plans, life and disability insurance plans, expense reimbursement, reimbursement for tax preparation and planning, and vacation
in accordance with the Company's top management vacation policy.

Pursuant
to the employment agreement, if the Company terminates Mr. Saidi's employment other than for cause or disability or if Mr. Saidi terminates his employment with the
Company for good reason, and Mr. Saidi's employment is not terminated automatically as a result of his death, the Company will pay him an amount equal to one hundred percent of his annual base
salary. Not withstanding the preceding sentence, the Company shall pay Mr. Saidi an amount equal to one hundred fifty percent of his annual base salary and the time vested stock option for
540,000 shares of common stock will accelerate and become fully vested, solely in a circumstance in which there has occurred a change in control (as such term is defined in his option agreement)
within six months prior to any termination for good reason or by the Company other than for cause.

Mr. Saidi
was granted PARSUs on August 10, 2006, May 2, 2007, July 30, 2007 and October 30, 2007 for 38,500, 65,000, 120,000 and 75,000 shares
respectively of our common stock that will accelerate and become fully vested upon change in control of the Company.



Effective August 8, 2005, the Company entered into an employment agreement with Mark Knoch for the position of Vice President of Operations for the
Company. The employment agreement is effective for three years with automatic one-year extensions thereafter unless advance written notice of an intention not to extend the term is
provided by either the Company or Mr. Knoch.

Under
the employment agreement, Mr. Knoch is entitled to receive an annual base salary of $225,000 and will be eligible to participate in the Company's discretionary cash bonus
plan based on appropriate business and financial targets and individual objectives. Mr. Knoch received a stock option grant of
450,000 shares of the Company's common stock which will vest over four years and a restricted stock grant of 150,000 shares of the Company's common stock which shall vest conditioned on the
satisfaction of certain performance targets and objectives. Mr. Knoch's employment agreement also provides for other benefits including the right to participate in fringe benefit plans, life
and disability insurance plans, expense reimbursement, reimbursement for tax preparation and planning, and vacation in accordance with the Company's top management vacation policy.

Pursuant
to the employment agreement, if the Company terminates Mr. Knoch's employment other than for cause or disability or if Mr. Knoch terminates his employment with the
Company for good reason, and Mr. Knoch's employment is not terminated automatically as a result of his death, the Company will pay him an amount equal to one hundred percent of his annual base
salary. Not withstanding the preceding sentence, the Company shall pay Mr. Knoch an amount equal to one hundred fifty percent of his annual base salary and the time vested stock option for
450,000 shares of common stock will accelerate and become fully vested, solely in a circumstance in which there has occurred a change in control (as such term is defined in his option agreement)
within six months prior to any termination for good reason or by the Company other than for cause.

Mr. Knoch
was granted a PARSU on August 10, 2006 and July 30, 2007 for 98,000 and for 100,000 shares respectively of our common stock that will accelerate and become
fully vested upon change in control of the Company.

Potential Payments Upon Termination of Employment

We have quantified the amount of benefits and payments that would be owed or payable under our employment agreements if the named executive's employment had
terminated on December 31,

15

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2007,
given the named executive's compensation and service levels as of such date and, if applicable, based on the closing market price on December 31, 2007 of $0.74 per share in the table
below:

|Benefit                     |       | Bruce W. Diamond |         | R. Gregory Miller |   | Rainer N. Growitz |         | Haresh P. Patel |         | Morteza Saidi |   | Mark Knoch
|--------------------------- | ----- | ---------------- | ------- | ----------------- | - | ----------------- | ------- | --------------- | ------- | ------------- | - | ----------
|UNEARNED COMPENSATION       |       |                  |         |                   |   |                   |         |                 |         |               |   |           
|Cash Severance              |       | $                | 525,000 |                   | $ | 230,000           |         | $               | 167,200 |               | $ | 245,000   
|Health & Welfare(1)         |       |                  |         |                   |   |                   |         |                 |         |               |   |           
|Restricted Stock and PARSUs |       | $                | 71,964  |                   | $ |                  |         | $               |        |               | $ |          
|Stock Options               |       | $                |        |                   | $ |                  |         | $               |        |               | $ |          
|                            |       |                  |         |                   |   |                   |         |                 |         |               |   |           
|                            | Total |                  | $       | 596,964           |   | $                 | 230,000 |                 | $       | 167,200       |   | $         
|                            |       |                  |         |                   |   |                   |         |                 |         |               |   |           

Potential Payments Upon Change in Control

We have quantified the amount of benefits and payments that would be owed or payable under our employment agreements upon a change in control assuming that a
triggering event occurred on December 31, 2007 and a valuation of our common stock based on its closing market price on December 31, 2007 of $0.74 per share in the table below:

|Benefit                     |       | Bruce W. Diamond |           | R. Gregory Miller |   | Rainer N. Growitz |         | Haresh P. Patel |         | Morteza Saidi |   | Mark Knoch
|--------------------------- | ----- | ---------------- | --------- | ----------------- | - | ----------------- | ------- | --------------- | ------- | ------------- | - | ----------
|UNEARNED COMPENSATION       |       |                  |           |                   |   |                   |         |                 |         |               |   |           
|Cash Severance              |       | $                | 1,046,500 |                   | $ | 345,000           |         | $               | 250,800 |               | $ | 367,500   
|Health & Welfare(2)         |       |                  |           |                   |   |                   |         |                 |         |               |   |           
|Restricted Stock and PARSUs |       | $                | 553,168   |                   | $ | 279,054           |         | $               | 51,857  |               | $ | 115,600   
|Stock Options               |       | $                |          |                   | $ |                  |         | $               |        |               | $ |          
|                            |       |                  |           |                   |   |                   |         |                 |         |               |   |           
|                            | Total |                  | $         | 1,599,668         |   | $                 | 624,054 |                 | $       | 302,657       |   | $         
|                            |       |                  |           |                   |   |                   |         |                 |         |               |   |           

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16

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SUMMARY COMPENSATION TABLE FOR 2007

The following table sets forth 2007 compensation information for: (i) the principal executive officer; (ii) the principal financial officer;
(iii) four other executive officers, who, based on their total compensation, were the most highly compensated in 2007, (our "named executive
officers").

|Name and Principal Position                                                                |  | Year |  | Salary
($) |  | Bonus
($) |  | Stock Awards
($)(1) |  | Option Awards
($)(1) |  | Non-Equity Incentive Plan Compensation
($)(2) |  | Change in Pension Value and Non qualified Deferred Compensation Earnings
($)(3) |  | All Other Compensation
(4) |  | Total
($)
|------------------------------------------------------------------------------------------ |  | ---- |  | ---------- |  | --------- |  | ------------------- |  | -------------------- |  | --------------------------------------------- |  | ------------------------------------------------------------------------------- |  | -------------------------- |  | ---------
|Bruce W. Diamond
President and Chief Executive Officer (principal executive officer)       |  | 2007 |  | 344,617    |  |          |  | 683,295             |  | 6,441                |  |                                              |  |                                                                                |  | 17,587                     |  | 1,051,940
|R. Gregory Miller
Vice President and Chief Financial Officer (principal financial officer) |  | 2007 |  | 227,346    |  |          |  | 97,218              |  | 410,520              |  |                                              |  |                                                                                |  | 11,776                     |  | 746,860  
|Mark Knoch
Vice President Operations                                                       |  | 2007 |  | 225,000    |  |          |  | 138,271             |  | 124,972              |  |                                              |  |                                                                                |  | 8,926                      |  | 497,169  
|Haresh Patel
Vice President Sales and Marketing                                            |  | 2007 |  | 245,001    |  |          |  | 35,747              |  | 291,344              |  |                                              |  |                                                                                |  | 19,899                     |  | 591,991  
|Morteza Saidi
Vice President Engineering                                                   |  | 2007 |  | 225,002    |  |          |  | 64,556              |  | 335,413              |  |                                              |  |                                                                                |  | 12,421                     |  | 637,392  
|Rainer N. Growitz
Vice President Finance and Corporate Secretary                           |  | 2007 |  | 162,492    |  |          |  | 9,553               |  | 10,294               |  |                                              |  |                                                                                |  | 7,011                      |  | 189,350  

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17

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GRANTS OF PLAN-BASED AWARDS FOR 2007

The following table sets forth, for the fiscal year ended December 31, 2007, each grant of cash or equity based on awards to our named executive officers
under plans established by us.

|                  |  |                               |  | Estimated Future
Payouts Under
Non-Equity
Incentive Plan
Awards |  | Estimated
Future
Payouts
Under
Equity
Incentive
Plan Awards |  | All Other
Stock
Awards:
Number of
shares of
Stock or |  | All Other
Option
Awards:
Number of
Securities
Underlying |           | Exercise
or Base
Price of
Option |  | Closing
Price on
Grant
Date if
Different
from
Exercise |  | Grant Date
Fair
Value of
Stock and
Option
|----------------- |  | ----------------------------- |  | --------------------------------------------------------------- |  | ----------------------------------------------------------- |  | ---------------------------------------------------- |  | -------------------------------------------------------- | --------- | -------------------------------- |  | ------------------------------------------------------ |  | -----------------------------------------
|
|Bruce W. Diamond  |  | 7/30/2007                     |  |                                                                |  | 525,000                                                     |  |                                                     |  | 256,410                                                  | (3)       |                                 |  |                                                       |  |                                         
|R. Gregory Miller |  | 7/30/2007                     |  |                                                                |  | 207,000                                                     |  |                                                     |  | 300,000                                                  | (3)       |                                 |  |                                                       |  |                                         
|Mark Knoch        |  | 7/30/2007                     |  |                                                                |  | 202,500                                                     |  |                                                     |  | 100,000                                                  | (3)       |                                 |  |                                                       |  |                                         
|Haresh Patel      |  | 7/30/2007                     |  |                                                                |  | 220,500                                                     |  |                                                     |  | 120,000                                                  | (3)       |                                 |  |                                                       |  |                                         
|Morteza Saidi     |  | 5/2/2007
7/30/2007
10/30/2007 |  |                                                                |  | 202,500                                                     |  | 

                                                |  | 65,000
120,000
75,000                                    | (3)(3)(3) | 

                            |  | 

                                                  |  | 

                                    
|Rainer N. Growitz |  | 7/30/2007
10/30/2007          |  |                                                                |  | 84,000                                                      |  | 

                                                |  | 30,000
15,000                                            | (3)(3)    | 

                            |  | 

                                                  |  | 

                                    

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18

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Narrative to Summary Compensation Table and Grants of 2007 Plan-Based Awards

See Compensation Discussion and Analysis above for a complete description of compensation plans pursuant to which the amounts listed under the Summary
Compensation Table and Grants of 2007 Plan-Based Awards were paid or awarded and the criteria for such payment, including targets for payment of incentives, as well as performance criteria
on which such payments were based. The Compensation Discussion and Analysis also describes the options, PARSUs and restricted stock grants.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END FOR 2007

The following table sets forth certain information concerning outstanding unexercised option and stock awards held by our named executive officers at
December 31, 2007 which have not vested:

|                  |  | Option Awards          |  | Stock Awards    
|----------------- |  | ---------------------- |  | ----------------
|
|Bruce W. Diamond  |  | 7/15/03
7/22/04        |  | 25,000
7,500


|R. Gregory Miller |  | 4/10/06                |  | 208,333

     
|Mark Knoch        |  | 8/8/05                 |  | 225,000
       
|Haresh Patel      |  | 10/24/05               |  | 270,833         
|Morteza Saidi     |  | 1/17/06                |  | 258,750


   
|Rainer N. Growitz |  | 1/31/00
4/3/01
11/9/04 |  | 189,064
50,000


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19

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20

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OPTION EXERCISES AND STOCK VESTED FOR 2007

The following table sets forth for the fiscal year ended December 31, 2007 certain information regarding options exercised by our named executive officers
and the vesting of restricted stock awards:

|                  |  | Option Awards |  | Stock Awards
|----------------- |  | ------------- |  | ------------
|
|Bruce W. Diamond  |  |              |  | $           
|R. Gregory Miller |  |              |  | $           
|Mark Knoch        |  |              |  | $           
|Haresh Patel      |  |              |  | $           
|Morteza Saidi     |  |              |  | $           
|Rainer N. Growitz |  |              |  | $           

COMPENSATION OF DIRECTORS FOR 2007

The following table sets forth the annual compensation paid or accrued by the Company to or on behalf of our directors, other than employee directors for the
fiscal year ended December 31, 2007.

|Name(1)              |  | Fees Earned or Paid in Cash ($)(2) |        | Stock Awards ($)(3) |   | Option Awards ($)(4) |  | Change in Pension Value and Deferred Compensation Earnings ($)(5) |        | All Other Compensation ($) |   | Total ($)
|-------------------- |  | ---------------------------------- | ------ | ------------------- | - | -------------------- |  | ----------------------------------------------------------------- | ------ | -------------------------- | - | ---------
|Current Directors:   |  |                                    |        |                     |   |                      |  |                                                                   |        |                            |   |          
|W. Dexter Paine, III |  | $                                  | 54,500 |                     | $ |                     |  | $                                                                 | 13,863 |                            | $ |         
|Angelos J. Dassios   |  | $                                  | 17,115 |                     | $ |                     |  | $                                                                 | 2,081  |                            | $ |         
|Liane J. Pelletier   |  | $                                  | 47,000 |                     | $ |                     |  | $                                                                 | 27,473 |                            | $ |         
|Jack G. Levin        |  | $                                  | 29,000 |                     | $ |                     |  | $                                                                 | 8,921  |                            | $ |         
|Patrice M. Daniels   |  | $                                  | 47,840 |                     | $ |                     |  | $                                                                 | 14,634 |                            | $ |         
|Catherine P. Lego    |  | $                                  | 58,670 |                     | $ |                     |  | $                                                                 | 16,046 |                            | $ |         
|Robert Whelton       |  | $                                  | 33,840 |                     | $ |                     |  | $                                                                 | 13,696 |                            | $ |         
|Former Directors:    |  |                                    |        |                     |   |                      |  |                                                                   |        |                            |   |          
|Michael E. Holmstrom |  | $                                  | 55,792 |                     | $ |                     |  | $                                                                 | 12,864 |                            | $ |         

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21

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22

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with the Company's management.

Based
on the Compensation Committee's review and discussion noted above, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be
included in this Amendment No. 1 on Form 10-K/A.

Submitted
by the Compensation Committee of the Board of Directors of WJ Communications, Inc.

W.
Dexter Paine, III
Liane J. Pelletier

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee is composed of W. Dexter Paine, III and Liane J. Pelletier, neither of who are or have ever been our officer or employee. W. Dexter
Paine, III is President of Paine & Partners, LLC and the information set forth in Item 13 below is incorporated herein by reference. No executive officer of the Company serves as
a director of another entity.

Item 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table presents information regarding the number of shares of our common stock beneficially owned as of March 30, 2008 (unless otherwise
indicated), by:



Unless
otherwise indicated by footnote, the beneficial owner exercises sole voting and investment power over the shares noted below. The business address of each individual listed below
is c/o WJ Communications, Inc. 401 River Oaks Parkway, San Jose 95134. The beneficial ownership percentages reflected in the table below are based on 68,912,032 shares of our common stock
outstanding as of March 30, 2008:

Pursuant
to the rules of the Securities and Exchange Commission, certain shares of common stock which a person has the right to acquire within 60 days of the date hereof pursuant
to the exercise of stock options are deemed to be outstanding for the purpose of computing the percentage ownership of such person but are not deemed outstanding for the purpose of computing the
percentage ownership of any other person. In each instance, information as to the number of shares owned and the nature of

23

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ownership
has been provided by the individuals identified or described and is not within the direct knowledge of the Company.

Name and Address of Beneficial Owners

Amount and Nature of Beneficial Ownership

Percent of Common StockFox Paine Capital, LLC(1)

25,492,044

37.0
%Fox Paine Capital Fund, L.P.(1)

24,155,413

35.1
%FPC Investors, L.P.(1)

358,422

*Kopp Investment Advisors, LLC(2)

10,641,620

15.4
%W. Dexter Paine, III(3)

25,566,673

37.1
%Angelos J. Dassios(4)

25,492,044

37.0
%Liane J. Pelletier(5)

42,000

*Patrice M. Daniels(6)

10,750

*Jack G. Levin(7)

9,500

*Catherine P. Lego(8)

58,250

*Robert Whelton(9)

17,000

*Bruce W. Diamond(10)

816,357

1.2
%Haresh Patel(11)

445,448

*Mark Knoch(12)

361,025

*Morteza Saidi(13)

521,784

*R. Gregory Miller(14)

467,806

*Rainer N. Growitz(15)

290,140

*All directors and executive officers as a group (13 persons)(16)

28,644,983

40.4
%


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Item 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

We entered into a Management Agreement and a Shareholders' Agreement with related persons in January 31, 2000 that are still in effect today.

Management Agreement

On January 31, 2000, Fox Paine Capital Fund, an investment fund managed by Fox Paine & Company, LLC ("Fox Paine & Company" or "Fox
Paine"), became the controlling shareholder of the Company. Fox Paine Capital Fund acquired its controlling position in an all cash merger between FP-WJ Acquisition Corp. and the Company,
then called Watkins-Johnson Company (the "Recapitalization Merger"), whereby Fox Paine Capital Fund and its co-investors paid a total of $50.8 million for approximately 91.1% of the
Common Stock of the Company (or $41.125 per pre-split share as the Common Stock was then constituted). W. Dexter Paine, III, the Chairman of our Board of Directors, was the President of
Fox Paine.

As
part of the Recapitalization Merger, the Company entered into a management agreement with Fox Paine & Company. Since the Recapitalization Merger, and for each subsequent year,
the Company will pay Fox Paine a fee in the amount of 1% of the Company's net income before interest expense, interest income, income taxes, depreciation and amortization and equity in earnings
(losses) of minority investments, calculated without regard to the fee. In exchange for its management fee, Fox Paine assists the Company with its strategic planning, budgets and financial projections
and helps the Company identify possible strategic acquisitions and recruit qualified management personnel. Fox Paine also assists in customer and supplier relationships on behalf of the Company and
consults with the Company on various matters including tax planning and public relations strategies, economic and industry trends and executive compensation. Due to the Company's loss incurred from
2003, 2004, 2005 and 2006, no management fees were paid to Fox Paine for the years ended December 31, 2004, December 31, 2005, December 31, 2006 and December 31, 2007. The
Company has agreed to reimburse Fox Paine for its expenses incurred in providing these services. The Company paid Fox Paine $2,000, $29,000, $29,000 and $108,000 for the reimbursement of expenses
incurred by Fox Paine for the years ended December 31, 2007, December 31, 2006, December 31, 2005 and December 31, 2004, respectively. The
Company also paid Fox Paine $700,000 in July of 2004 for investment banking services rendered in connection with the EiC Acquisition that was completed on June 18, 2004.

Fox
Paine will continue to provide management services under this agreement until its affiliates no longer own shares of Common Stock or are no longer represented on the Board of
Directors. The management agreement with the Company is similar to those entered into between Fox Paine and each of the other companies acquired by Fox Paine's affiliates. In connection with this
agreement, the Company has agreed to indemnify Fox Paine against various liabilities that may arise as a result of the management services it will perform for the Company. The Company has also agreed
to reimburse Fox Paine for its expenses incurred in providing these services.

Shareholders' Agreement

On January 31, 2000, the Company entered into a shareholders' agreement with Fox Paine Capital Fund, investors affiliated with Fox Paine Capital Fund and
several non-fund investors, including co-investors and certain employees of the Company. Under the shareholders' agreement, subject to limited exceptions:



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In
the event that either Fox Paine Capital Fund or its affiliates makes a demand for registration, the Company has agreed to pay all expenses related to that registration. The Company
has also agreed to indemnify Fox Paine Capital Fund against various liabilities associated with such registration.

The
shareholders' agreement also provides that the Company's shareholders who are a party to the agreement will vote their shares in order to ensure that if and to the extent Fox Paine
Capital Fund owns shares of Common Stock, Fox Paine Capital Fund will be represented on the Board of Directors.

Fox
Paine exercised registration rights in connection with the secondary underwritten public offering that we completed January 28, 2004.

Policies and Procedures

Our policies and procedures with respect to the review, approval and ratification of transactions with related persons is that any such transactions are subject
to the review and approval by the Audit Committee of the Board of Directors. Since the foregoing related party transactions were entered into in January of 2001, they pre-date our becoming
a public company and were not subject to Audit Committee review or approval.

Director Independence

As required under NASDAQ Marketplace Rules, a majority of our board is comprised of independent directors. As of the date of this report, our board has determined
for such purpose that Jack G. Levin, Liane J. Pelletier, Patrice M. Daniels, Catherine P. Lego and Robert Whelton are each independent as defined in the NASDAQ Marketplace Rules. Our audit committee,
compensation committee and corporate governance and nominating committee are comprised solely of independent directors.

Item 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees billed by our principal accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates
(collectively, the "Deloitte Entities") are as follows:

Year EndedDecember 31,
2007

December 31,
2006Audit fees

$
771,333

$
680,008Audit-related fees


38,420


Tax fees


47,881


25,673All other fees





Total

$
857,634

$
705,681


Audit
fees billed or expected to be billed by the Deloitte Entities include professional services rendered for the audit of our annual financial statements, the reviews of the financial statements
included in our Quarterly Reports on Form 10-Q and the filing of Registration Statements with the Securities and Exchange Commission and fees required by the Sarbanes-Oxley Act of
2002. Audit-related fees are fees billed for assurance and related services that are reasonably related to the performance of the audit or review of financial statements and included due diligence
related to mergers and acquisitions, and consulting on financial accounting/reporting standards and controls. Tax fees are professional services

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rendered
for tax compliance, tax consulting and tax planning including services. All Other Fees consist of fees for products and services other than the services reported above.

The
Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the principal accountant's independence and has concluded that
the non-audit services provided by the Deloitte Entities are compatible with maintaining the Deloitte Entities' independence.

Pre-Approval Policies and Procedures

The Audit Committee approves in advance all audit and permissible non-audit services to be performed by our independent registered public accounting
firm. The Audit Committee considers whether the provision of any proposed non-audit services is consistent with the SEC's rules on auditor independence and has pre-approved
certain specified audit and non-audit services to be provided by the Deloitte Entities for up to twelve (12) months from the date of the pre-approval. If there are any
additional services to be provided, a request for pre-approval must be submitted by management to the Audit Committee for its consideration. The Audit Committee pre-approved
all of the services performed in 2007 and 2006 by the Deloitte Entities relating to the "Audit Fees," "Audit-Related Fees," "Tax Fees" and "All Other Fees" described above as required by the
Sarbanes-Oxley Act of 2002.

PART IV

Item 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

|Exhibit
Number |  | Exhibit Description                                                                                                                                     
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1           |  | Certification of Bruce W. Diamond, Chief Executive Officer (principal executive officer) pursuant to Rule 13a-14 of the Securities Exchange Act of 1934 
|31.2           |  | Certification of R. Gregory Miller, Chief Financial Officer (principal financial officer) pursuant to Rule 13a-14 of the Securities Exchange Act of 1934

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of San Jose, State of California, on the 25th day of April 2008.

|                     |  |     | WJ COMMUNICATIONS, INC.(Registrant)                                      
|-------------------- |  | --- | -------------------------------------------------------------------------
|Date: April 18, 2008 |  | By: | /s/BRUCE W. DIAMONDBruce W. Diamond President and Chief Executive Officer

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