UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  SCHEDULE 14A
                                 (RULE 14a-101)

                     Information Required In Proxy Statement

                            Schedule 14A Information

 Proxy Statement Pursuant To Section 14(a) Of The Securities Exchange Act Of 1934

                                (Amendment No. )

Filed by the Registrant / /

Filed by a Party other than the Registrant /X/

Check the appropriate box:


      / / Preliminary Proxy Statement

      / / Confidential,  for  Use  of  the  Commission  Only  (as  permitted  by
          Rule 14a-6(e)(2))

      /X/ Definitive Proxy Statement

      / / Definitive Additional Materials

      / / Soliciting Material Under Rule 14a-12

                           POMEROY IT SOLUTIONS, INC.
--------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)

                            FLAGG STREET CAPITAL LLC
                            FLAGG STREET PARTNERS LP
                       FLAGG STREET PARTNERS QUALIFIED LP
                            FLAGG STREET OFFSHORE, LP
                                 JONATHAN STARR
                               MICHAEL A. RUFFOLO
                                RICHARD S. PRESS
--------------------------------------------------------------------------------
    (Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

      /X/ No fee required.

      / / Fee  computed on table below per Exchange  Act Rules  14a-6(i)(1)  and
0-11.



      (1) Title of each class of securities to which transaction applies:

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      (2) Aggregate number of securities to which transaction applies:

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          pursuant to Exchange  Act Rule 0-11 (set forth the amount on which the
          filing fee is calculated and state how it was determined):

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      (4) Proposed maximum aggregate value of transaction:

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      (5) Total fee paid:

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      / / Fee paid previously with preliminary materials:

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      / / Check box if any part of the fee is offset as provided by Exchange Act
Rule  0-11(a)(2)  and identify the filing for which the  offsetting fee was paid
previously.  Identify the previous filing by registration  statement  number, or
the form or schedule and the date of its filing.

      (1) Amount previously paid:

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      (2) Form, Schedule or Registration Statement No.:

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      (4) Date Filed:



                       FLAGG STREET PARTNERS QUALIFIED LP

                                  June 11, 2007

Dear Fellow Stockholder:

      Flagg Street Partners Qualified LP ("Flagg Street" or "we") and certain of
its affiliates are the beneficial  owners of an aggregate of 1,249,325 shares of
Common  Stock of  Pomeroy  IT  Solutions,  Inc.  ("Pomeroy"  or the  "Company"),
representing in excess of 10% of the outstanding Common Stock of the Company. We
believe the  current  Board of  Directors  of Pomeroy is not acting in your best
interests as discussed in the attached Proxy Statement. We are therefore seeking
your  support  at the annual  meeting of  stockholders  (the  "Annual  Meeting")
scheduled to be held at the Cincinnati  Airport  Marriott,  2395 Progress Drive,
Hebron,  Kentucky,  on Thursday,  July 12, 2007,  at 9:00 A.M.  (E.D.T.) for the
following:

      1.    TO ELECT FLAGG STREET'S DIRECTOR NOMINEES,  JONATHAN STARR,  MICHAEL
            A. RUFFOLO AND RICHARD S. PRESS TO SERVE AS DIRECTORS OF POMEROY, IN
            OPPOSITION TO THE COMPANY'S  INCUMBENT  DIRECTORS WHOSE TERMS EXPIRE
            AT THE ANNUAL MEETING.

      2.    TO RATIFY  THE  APPOINTMENT  OF BDO  SEIDMAN,  LLP AS THE  COMPANY'S
            INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2007.

      Through the attached Proxy  Statement we are  soliciting  proxies to elect
not only our three  director  nominees,  but also the  candidates  who have been
nominated  by Pomeroy  other than David  Pomeroy,  Stephen  Pomeroy  and Vincent
Rinaldi.  This gives  stockholders  the ability to vote for the total  number of
directors  up for election at the Annual  Meeting.  The names,  backgrounds  and
qualifications of the Company's nominees,  and other information about them, can
be found in the Company's proxy statement. There is no assurance that any of the
Company's nominees will serve as directors if our nominees are elected.

      We are not seeking  control of the Board of  Directors.  However,  we hope
that this election  contest will result in David  Pomeroy,  Stephen  Pomeroy and
Vincent Rinaldi NOT being re-elected to the Board of Directors and send a strong
message to the remaining incumbent directors that stockholders are not satisfied
with the Company's performance, management and corporate governance.

      We  urge  you to  carefully  consider  the  information  contained  in the
attached  Proxy  Statement  and  support  our  efforts  by  signing,  dating and
returning the enclosed GOLD proxy card today.  The attached Proxy  Statement and
the enclosed GOLD proxy card are first being furnished to the stockholders on or
about June 11, 2007.

      If you have  already  voted for the  incumbent  management  slate you have
every right to change your vote by signing,  dating and  returning a later dated
proxy card or by voting in person at the Annual Meeting.  Only your latest dated
proxy card will count.




      Since only your latest  dated  proxy card will  count,  we urge you not to
return  any proxy  card you  receive  from the  Company.  Even if you return the
management  proxy card marked  "withhold"  as a protest  against  the  incumbent
directors,  it will revoke any proxy card you may have  previously sent to Flagg
Street.  Remember,  you can vote for our three independent  nominees only on our
GOLD proxy card.  So please make  certain  that the latest  dated proxy card you
return is the GOLD proxy card.

      If you have any questions or require any assistance with your vote, please
contact  Morrow & Co.,  Inc.,  which is  assisting  us,  at  their  address  and
toll-free numbers listed on the following page.

                                    Thank you for your support,

                                    /s/ Jonathan Starr
                                    ----------------------------------
                                    Jonathan Starr
                                    Flagg Street Partners Qualified LP


--------------------------------------------------------------------------------

IF YOU HAVE ANY QUESTIONS, REQUIRE ASSISTANCE IN VOTING YOUR GOLD PROXY CARD, OR
      NEED ADDITIONAL COPIES OF FLAGG STREET'S PROXY MATERIALS, PLEASE CALL
              MORROW & CO., INC. AT THE PHONE NUMBERS LISTED BELOW.

                               MORROW & CO., INC.

                                 470 West Avenue
                               Stamford, CT 06902
                                 (203) 658-9400

             BANKS AND BROKERAGE FIRMS, PLEASE CALL: (203) 658-9400
                   STOCKHOLDERS CALL TOLL FREE: (800) 662-5200
                      E-MAIL: flaggstreet.info@morrowco.com

--------------------------------------------------------------------------------


                                      -2-


                         ANNUAL MEETING OF STOCKHOLDERS
                                       OF
                           POMEROY IT SOLUTIONS, INC.

                            -------------------------

                                 PROXY STATEMENT
                                       OF
                       FLAGG STREET PARTNERS QUALIFIED LP

                            -------------------------

          PLEASE SIGN, DATE AND MAIL THE ENCLOSED GOLD PROXY CARD TODAY

      Flagg Street  Partners  Qualified LP ("Flagg  Street" or "we"), a Delaware
limited  partnership,  together with certain of its  affiliates who are named as
participants in this Proxy  Statement are  stockholders of Pomeroy IT Solutions,
Inc., a Delaware corporation ("Pomeroy" or the "Company"). We are writing to you
in connection with the election of directors of Pomeroy (the "Pomeroy Board") at
the  annual  meeting  of  stockholders  scheduled  to be held at the  Cincinnati
Airport Marriott,  2395 Progress Drive, Hebron,  Kentucky, on Thursday, July 12,
2007, at 9:00 A.M. (E.D.T.), including any adjournments or postponements thereof
and any meeting which may be called in lieu thereof (the "Annual Meeting"). This
proxy  statement  (the "Proxy  Statement")  and the enclosed GOLD proxy card are
first being furnished to stockholders on or about June 11, 2007.

      This Proxy  Statement and the enclosed GOLD proxy card are being furnished
to stockholders  of Pomeroy by Flagg Street in connection with the  solicitation
of proxies from Pomeroy's stockholders for the following:

      1.    TO ELECT FLAGG STREET'S DIRECTOR NOMINEES,  JONATHAN STARR,  MICHAEL
            A.  RUFFOLO  AND  RICHARD  S.  PRESS  (THE  "NOMINEES")  TO SERVE AS
            DIRECTORS  OF POMEROY,  IN  OPPOSITION  TO THE  COMPANY'S  INCUMBENT
            DIRECTORS WHOSE TERMS EXPIRE AT THE ANNUAL MEETING.

      2.    TO RATIFY  THE  APPOINTMENT  OF BDO  SEIDMAN,  LLP AS THE  COMPANY'S
            INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2007.

      This Proxy Statement is soliciting  proxies to elect not only our director
nominees,  but also the candidates who have been nominated by Pomeroy other than
David Pomeroy,  Stephen Pomeroy and Vincent Rinaldi. This gives stockholders who
wish to vote for our three  nominees  the  ability to vote for nine  nominees in
total.

      Flagg Street,  Flagg Street  Capital  Management  LLC, a Delaware  limited
liability  company  ("FSGP"),  Flagg  Street  Partners  LP, a  Delaware  limited
partnership  ("FSP"),  Flagg  Street  Offshore,  LP,  a Cayman  Islands  limited
partnership  ("FSO," and together  with Flagg Street and FSP, the "Flagg  Street
Funds"),  and the  Nominees  are  members  of a group  (the  "Group")  formed in
connection  with this proxy  solicitation  and are deemed  participants  in this
proxy solicitation.

      Pomeroy has set the record date for determining  stockholders  entitled to
notice of and to vote at the Annual Meeting as June 6, 2007 (the "Record Date").
The  mailing  address  of the  principal  executive  offices  of Pomeroy is 1020
Petersburg  Road,  Hebron,  KY  41048.  Stockholders  of  record at the close of
business  on the Record  Date will be  entitled  to vote at the Annual  Meeting.




According to Pomeroy,  as of the Record Date,  there were  12,701,863  shares of
common stock, $.01 par value per share (the "Shares"),  outstanding and entitled
to vote at the Annual  Meeting.  As of the Record  Date,  the Flagg Street Funds
were the owners of an aggregate of 1,249,325 Shares,  which represents in excess
of 10% of the  voting  securities  outstanding  (based  on the  Company's  proxy
statement).  The Flagg  Street Funds intend to vote such Shares for the election
of the Nominees and for the  candidates  who have been  nominated by the Company
other than David Pomeroy,  Stephen Pomeroy and Vincent Rinaldi. The Flagg Street
Funds also intend to vote such Shares for the ratification of the appointment of
BDO Seidman, LLP as described herein.

THIS  SOLICITATION  IS BEING MADE BY FLAGG STREET AND NOT ON BEHALF OF THE BOARD
OF DIRECTORS OR  MANAGEMENT  OF POMEROY.  FLAGG STREET IS NOT AWARE OF ANY OTHER
MATTERS TO BE BROUGHT BEFORE THE ANNUAL  MEETING.  SHOULD OTHER  MATTERS,  WHICH
FLAGG  STREET IS NOT AWARE OF A  REASONABLE  TIME BEFORE THIS  SOLICITATION,  BE
BROUGHT BEFORE THE ANNUAL MEETING,  THE PERSONS NAMED AS PROXIES IN THE ENCLOSED
GOLD PROXY CARD WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION.

FLAGG STREET URGES YOU TO SIGN,  DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF
THE ELECTION OF ITS NOMINEES.

IF YOU HAVE  ALREADY  SENT A PROXY  CARD  FURNISHED  BY  POMEROY  MANAGEMENT  TO
POMEROY,  YOU MAY REVOKE THAT PROXY AND VOTE FOR EACH OF THE PROPOSALS DESCRIBED
IN THIS PROXY STATEMENT BY SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY
CARD.  ONLY THE LATEST DATED PROXY COUNTS.  ANY PROXY MAY BE REVOKED AT ANY TIME
PRIOR TO THE ANNUAL  MEETING BY  DELIVERING A WRITTEN  NOTICE OF REVOCATION OR A
LATER  DATED  PROXY FOR THE ANNUAL  MEETING OR BY VOTING IN PERSON AT THE ANNUAL
MEETING.  ALTHOUGH A REVOCATION IS EFFECTIVE IF DELIVERED TO THE COMPANY,  FLAGG
STREET  REQUESTS  THAT  EITHER  THE  ORIGINAL  OR  PHOTOSTATIC   COPIES  OF  ALL
REVOCATIONS  BE MAILED TO FLAGG  STREET  IN CARE OF  MORROW & CO.,  INC.  AT THE
ADDRESS SET FORTH ON THE BACK COVER OF THIS PROXY STATEMENT.


                                      -2-


                                    IMPORTANT

      YOUR VOTE IS IMPORTANT,  NO MATTER HOW MANY SHARES YOU OWN. WE URGE YOU TO
SIGN,  DATE,  AND  RETURN  THE  ENCLOSED  GOLD  PROXY CARD TODAY TO VOTE FOR THE
ELECTION OF OUR NOMINEES.

   o  IF YOUR  SHARES ARE  REGISTERED  IN YOUR OWN NAME,  please sign and date
      the enclosed GOLD proxy card and return it to Flagg  Street,  c/o Morrow
      & Co., Inc., in the enclosed envelope today.

   o  IF YOUR SHARES ARE HELD IN A BROKERAGE ACCOUNT OR BANK, you are considered
      the beneficial owner of the Shares,  and these proxy  materials,  together
      with a GOLD  voting  form,  are being  forwarded  to you by your broker or
      bank. As a beneficial  owner,  you must  instruct your broker,  trustee or
      other  representative  how to vote. YOUR BROKER CANNOT VOTE YOUR SHARES ON
      YOUR BEHALF WITHOUT YOUR INSTRUCTIONS.

   o  Depending upon your broker or custodian, you may be able to vote either by
      toll-free  telephone  or by the  Internet.  Please  refer to the  enclosed
      voting form for instructions on how to vote  electronically.  You may also
      vote by signing, dating and returning the enclosed voting form.

      Since only your latest  dated  proxy card will  count,  we urge you not to
return  any proxy  card you  receive  from the  Company.  Even if you return the
management  proxy card marked  "withhold"  as a protest  against  the  incumbent
directors,  it will revoke any proxy card you may have  previously sent to Flagg
Street.  Remember,  you can vote for our three independent  nominees only on our
GOLD proxy card.  So please make  certain  that the latest  dated proxy card you
return is the GOLD proxy card.

      PLEASE CALL MORROW & CO., INC. IF YOU NEED ASSISTANCE IN VOTING YOUR
                                GOLD PROXY CARD.


--------------------------------------------------------------------------------

                               MORROW & CO., INC.

                                 470 West Avenue
                               Stamford, CT 06902
                                 (203) 658-9400

             BANKS AND BROKERAGE FIRMS, PLEASE CALL: (203) 658-9400
                   SHAREHOLDERS CALL TOLL FREE: (800) 662-5200
                      E-MAIL: flaggstreet.info@morrowco.com

--------------------------------------------------------------------------------


                                      -3-


             REASONS WHY WE ARE CHALLENGING THE INCUMBENT DIRECTORS

      The  following  is a summary of the  reasons  why we our  challenging  the
incumbent director nominees at the Annual Meeting.

--------------------------------------------------------------------------------

   WE DO NOT HAVE FAITH IN MANAGEMENT'S ABILITY TO MAXIMIZE STOCKHOLDER VALUE
UNDER THE LEADERSHIP OF CHAIRMAN DAVID POMEROY AND HIS SON, CEO STEPHEN POMEROY

      Over  the  past  several  years,  the  founding  Pomeroy  family  has made
decisions  that in our  opinion  appear  to be  driven  by  their  own  personal
interests.  These decisions  include the transfer of the CEO position from David
Pomeroy to his son, Stephen Pomeroy without undertaking an exhaustive search for
the best qualified executive for this position,  exorbitant compensation awarded
to Stephen Pomeroy, and David Pomeroy remaining on the Pomeroy Board as Chairman
despite his lack of independence.  These decisions have had a detrimental effect
on the stockholders.

 DURING THE PAST FEW YEARS, POMEROY'S FINANCIAL RESULTS HAVE BEEN DISAPPOINTING
    AND THE COMPANY HAS MADE EMBARRASSING ACCOUNTING ERRORS IN ITS FINANCIAL
                                   DISCLOSURE

      During  the past two  years,  Pomeroy  has  achieved  its worst  operating
results  in at  least a  decade.  We  believe  this  performance  is  even  more
unacceptable  when you take into account  Pomeroy's  acquisition  of Alternative
Resources Corporation in July 2004 for cash and assumed debt nearly equal to the
Company's   current  equity  market   capitalization.   The  Company  also  made
embarrassing   accounting  errors  in  its  financial   disclosure   leading  to
restatements  of its Forms 10-Q for the quarters ended April 5, 2005 and July 5,
2005. Despite these restatements,  as of January 5, 2006,  management identified
material  weaknesses in four areas of the Company's  internal  controls over its
financial reporting. We believe the Pomeroy Board should be held accountable for
these accounting errors and material weaknesses.

  WE BELIEVE POMEROY'S POISON PILL AND OTHER ANTI-TAKEOVER PROVISIONS ENTRENCH
            THE POMEROY BOARD AND MANAGEMENT AND SHOULD BE ELIMINATED

      We believe Pomeroy has onerous anti-takeover  provisions that insulate the
incumbent directors from being accountable to stockholders. Pomeroy has a rights
plan  or  "poison  pill"  that we  believe  entrenches  the  Pomeroy  Board  and
management.  Pomeroy's  Certificate of Incorporation and Bylaws contain numerous
anti-takeover  provisions  that we also  believe are  intended  to entrench  the
Pomeroy  Board and  management  to the  detriment  of the  stockholders.  If the
Nominees  are  elected,  they will use their best  efforts to cause the  Pomeroy
Board to terminate the poison pill and other anti-takeover provisions.

             WE BELIEVE POMEROY'S SHARE PRICE HAS SUFFERED UNDER THE
                          COMPANY'S CURRENT LEADERSHIP

      Pomeroy's  Share price has performed  poorly during a time when in general
the rest of the IT industry  thrived.  As illustrated in Pomeroy's Form 10-K for
the year ended  January 5, 2007,  during the period from January 5, 2002 through
January 5, 2007,  an  investment  in Pomeroy  would have lost 42.5% of its value
compared  to a gain of 20.2%  had the same  investment  been made in the S&P 500
Stock  Index and a gain of 17.5%  had the  investment  been  made in the  NASDAQ
Composite Index. We believe that the Pomeroy Board's  inability to set effective
policy  and  make  the  right  strategic   decisions  has  contributed  to  this
performance.

    WE WISH TO PROVIDE THE STOCKHOLDERS, THE TRUE OWNERS OF POMEROY, WITH THE
OPPORTUNITY TO ELECT DIRECTORS THAT ARE UNAFFILIATED WITH THE EXISTING DIRECTORS

      If  elected,  the  Nominees'  first  priority  would  be to work  with the
independent  directors to maximize stockholder value and ensure that the Company
is being  run for the  benefit  of the  stockholders  - the true  owners  of the
Company - and not the Pomeroy  family.  We believe  these changes would not only
benefit  the  stockholders  but also have a  positive  effect  on the  Company's
relations with its customers and employees  which,  in our opinion,  are its two
most valuable assets.

--------------------------------------------------------------------------------


                                      -4-


                           BACKGROUND TO SOLICITATION

      The  following  is a  chronology  of  events  leading  up  to  this  proxy
solicitation:

         o  We began purchasing Shares in March 2006.

         o  During the fourth  quarter of 2006,  we made  multiple  requests  to
            Pomeroy to speak with David Pomeroy,  Chairman of the Pomeroy Board,
            regarding the Company's business  operations.  We were told by Kevin
            Gregory, Pomeroy's CFO, that David Pomeroy had declined our requests
            because he was too distant  from the  Company's  operations  to feel
            comfortable speaking to us.

         o  On January 10, 2007,  we called Kevin  Gregory  requesting a meeting
            with the Corporate Governance Committee of the Pomeroy Board.

         o  After several  follow up phone calls to the Company  during the next
            two weeks,  we had a  teleconference  on January  25,  2007 with two
            independent  directors,  William Lomicka and Ronald Krieg,  and with
            Kirk Longblade, a consultant to Pomeroy who previously served as the
            Company's  investment  banker.  We asked  Messrs.  Lomicka and Krieg
            questions about Pomeroy's business  operations and conveyed concerns
            we had  including the Company's  high  employee  attrition.  Messrs.
            Lomicka and Krieg  stated  that they were not aware of the  employee
            turnover rate as they only looked at employee  head-counts.  We also
            asked them whether there was any formal process to identify and hire
            a CEO for the Company  before  Stephen  Pomeroy was promoted to this
            position.  Messrs. Lomicka and Krieg stated that there was virtually
            no hiring  process when Stephen  Pomeroy  succeeded his father David
            Pomeroy as CEO.

         o  On February 6, 2007,  we sent a private  letter to the Pomeroy Board
            expressing  our  concern  with  management's   ability  to  maximize
            stockholder  value  and  run the  Company  for  the  benefit  of all
            stockholders, particularly under the leadership of David Pomeroy and
            Stephen Pomeroy.  We also made the following  recommendations to the
            Pomeroy Board:

            o   Appoint  three  representatives  of our  choice  to the  Pomeroy
                Board.

            o   Change  Stephen  Pomeroy  from CEO,  COO and  President to a new
                position of Vice President of Strategic Development  responsible
                for keeping his  replacement  and the Pomeroy Board  apprised of
                potential strategic alternatives for the Company.

            o   Appoint a special  committee of the Pomeroy Board  consisting of
                three of our designees and three other independent directors for
                the  purpose  of  conducting  a search  for a new  CEO,  COO and
                President.

            o   Remove David Pomeroy from the Pomeroy Board.

            In this letter,  we reiterated  that our first  priority was to work
            with the  independent  directors to maximize  stockholder  value and
            ensure  that  the  Company  is  being  run  for the  benefit  of the


                                      -5-


            stockholders and not the Pomeroy family.  We sent this letter to the
            Pomeroy  Board  privately  as we  believed  this was the best way to
            engage in meaningful discussions with the Pomeroy Board.

         o  On  February  15,  2007,  one week  after we sent the  February  6th
            letter,  we called  Kevin  Gregory  to  inquire as to when we should
            expect a response from the Pomeroy Board to our proposals.

         o  On  Friday,  February  23,  2007,  over two weeks  after we sent the
            February  6th  letter,  we received a letter  from  Pomeroy's  legal
            counsel  inviting  us  to  meet  with  unspecified  members  of  the
            Corporate  Governance  Committee on the following Tuesday,  February
            27, or  Wednesday,  February  28.  This  letter did not  address our
            concerns  with  Pomeroy  or the  recommendations  set  forth  in our
            February 6th letter.  Instead,  Pomeroy's  legal counsel stated that
            "Although two of the Company's  independent directors previously had
            a conference call with you to answer your questions, it appears from
            your  letter  that  there  are  still   matters  that  need  further
            clarification."

         o  On  February  26,  2007,  we  sent a  letter  to the  Pomeroy  Board
            expressing our disappointment to receive, after waiting for over two
            weeks,  a written  response  not from the  directors  but from legal
            counsel  to  Pomeroy  that  failed to  address  or  acknowledge  our
            concerns.  We stated that our concerns and  recommended  action plan
            were very clearly  stated in our February 6th letter and that we are
            not seeking  "clarification"  but rather a clear indication that the
            Pomeroy Board intends to recommend the items  detailed in our action
            plan. We stated that it was  inappropriate  for the Pomeroy Board to
            invite  us to fly to  Kentucky  on just  two  business  days  notice
            despite showing us no signs of taking our proposals  seriously,  but
            we would be happy to set up a  teleconference  for February 27, 2007
            or February  28, 2007 with the  independent  directors  assuming the
            directors   are  prepared  to  engage  in  serious  and   meaningful
            discussions.

         o  On March 5, 2007,  we had a  teleconference  with the members of the
            Corporate Governance Committee (the "Committee"),  consisting of Ken
            Waters,  Debra Tibey and David Boucher.  The Committee expressed its
            opinion that now was not the right time to remove  Stephen  Pomeroy,
            but that it was  possible  such a change might be needed in the near
            future.  The  Committee  also  expressed  its view that  Pomeroy was
            moving in the right direction.

            After a lengthy discussion, we believe that the Committee had agreed
            to seek the Pomeroy  Board's  support and approval in principle of a
            settlement proposal containing the following salient terms:

            o   Two existing  directors would resign and be replaced with one of
                our designees and a second  individual agreed upon by us and the
                Committee.

            o   David  Pomeroy would resign as Chairman of the Pomeroy Board and
                be replaced by an  independent  director.  The Committee  agreed
                that the Company could benefit from an independent Chairman.


                                      -6-


            The  Committee  requested  that we  formally  submit to it a written
            proposal  reflecting  these terms.  Ken Waters  stated that he would
            present  our written  proposal  to the  Pomeroy  Board with his full
            support.  The Committee also requested that we send them  references
            of other  management  teams we have  worked  with in the  past.  The
            Committee  said  they  could  get back to us with an answer no later
            than March 12, 2007  assuming we could  furnish them with a proposal
            by March 7, 2007.

         o  Between  March 5 and March 6, 2007,  we provided Ken Waters with the
            references requested by the Committee.

         o  On March 6, 2007,  we submitted a letter  setting  forth our written
            settlement  proposal  requested by the Committee.  The letter stated
            that we would be willing to enter into a settlement  agreement  with
            Pomeroy containing the following principle terms:

            o   David Pomeroy would resign as Chairman of the Pomeroy Board, but
                remain a director.  An independent  director would replace David
                Pomeroy as Chairman of the Board.

            o   Two current  directors  designated by Pomeroy and approved by us
                would resign from the Pomeroy Board.

            o   Jonathan Starr or one of our other  designees would be appointed
                to fill the first vacancy on the Pomeroy Board.

            o   An individual mutually agreed upon by us and the Committee would
                be appointed to fill the second vacancy on the Pomeroy Board.

            o   We would agree not to  nominate  directors  for  election at the
                2007 Annual Meeting of Stockholders of Pomeroy.

            o   The size of the  Pomeroy  Board would not be  increased  to more
                than ten (10) directors  until the conclusion of the 2008 Annual
                Meeting of Stockholders of Pomeroy.

            In the letter,  we again  reiterated  that our first  priority is to
            work with the independent directors to maximize stockholder value.

         o  On March 11, 2007, the Pomeroy Board scheduled a teleconference with
            us for March 12, 2007 in order to discuss our settlement proposal.

         o  On March  12,  2007,  ten  minutes  before  the  teleconference  was
            scheduled  to  begin,   Ken  Waters  called  to  tell  us  that  the
            teleconference was being postponed because the Pomeroy Board was not
            in  agreement  on the proposed  settlement  terms and David  Pomeroy
            wanted  more time to think about  them.  Later that day,  Ken Waters


                                      -7-


            called to tell us that the  Pomeroy  Board  was going to meet  again
            later in the  afternoon  and that he would  call us back  after  the
            meeting with an update. He never called us back with an update.

         o  On March 16, 2007,  Ken Waters  called to tell us that David Pomeroy
            requested  an in-person  meeting  with the  Committee to discuss our
            settlement  proposal  and that we would get a response  on March 19,
            2007.

         o  On March 19,  2007,  Ken Waters  called to tell us that the  meeting
            between David  Pomeroy and the  Committee was postponed  until March
            20, 2007.

         o  On March 21, 2007,  Ken Waters  called to tell us that he would send
            us a  counter-proposal  on  March  23,  2007.  We never  received  a
            counter-proposal.

         o  On March 25, 2007, we received a letter from Pomeroy's legal counsel
            stating that the Company would respond to our settlement proposal no
            later than March 28, 2007. We never received a response.

         o  On March 28, 2007,  Pomeroy issued a press release  announcing  that
            the Pomeroy Board is undertaking multiple initiatives to enhance the
            effectiveness  of the Pomeroy Board. The Company also announced that
            Jim  Smith  will  retire  from the  Pomeroy  Board at the end of his
            current term and Ken Waters will assume the newly  created  position
            of Lead Independent Director.  The press release did not mention our
            settlement proposal or that we had been engaging in discussions with
            members of the Pomeroy Board during the prior few weeks.

         o  On March 28, 2007, after the issuance of Pomeroy's press release, we
            had a  teleconference  with Ken Waters to discuss the press release.
            He told us that  Pomeroy's  legal counsel would provide us with some
            additional details.

         o  On March  28,  2007,  after  talking  with  Ken  Waters,  we  called
            Pomeroy's  legal counsel.  Pomeroy's legal counsel told us that they
            were unaware of any additional details.

         o  On March 29,  2007,  Pomeroy  for the first  time sent to us for our
            review and signature a form of confidentiality agreement.

         o  On March 30,  2007,  Kevin  Gregory  left us a message  requesting a
            teleconference  to discuss any outstanding  issues we had. Our legal
            counsel sent a message to Pomeroy's  legal  counsel that we would be
            willing  to  have  a  conversation   with  Mr.  Gregory  only  if  a
            representative  who is  authorized to speak on behalf of the Pomeroy
            Board  would   participate   and  be  willing  to  have   meaningful
            discussions   concerning  the  principal  terms  of  our  settlement
            proposal  contained  in our  March  6th  letter  to the  independent
            directors  to which we still  had not  received  a formal  response.
            Neither Pomeroy nor its legal counsel responded.

         o  On  April 3,  2007,  we  delivered  a letter  to the  Pomeroy  Board
            reiterating  our  dissatisfaction  with the  efforts of the  Pomeroy
            Board in engaging in meaningful and productive  discussions  with us
            regarding our settlement  proposal.  We  simultaneously  delivered a
            letter to Pomeroy nominating Jonathan Starr,  Michael A. Ruffolo and
            Richard S. Press as directors for election at the Annual Meeting.


                                      -8-


         o  In order  to avoid an  election  contest,  our  settlement  proposal
            offered more modest  changes from the Company than we originally had
            sought,  but we were willing to accept those terms as a sign of good
            faith that the Pomeroy Board and management were moving in the right
            direction.  The Pomeroy  Board's  failure to agree to the settlement
            despite seemingly strong support from independent directors leads us
            once again to the conclusion  that stronger action needs to be taken
            to bring new  leadership to the Company at the board and  management
            levels.


                                      -9-


                                 PROPOSAL NO. 1

                              ELECTION OF DIRECTORS

      The  Pomeroy  Board is  currently  composed of ten  directors  whose terms
expire at the Annual Meeting.  We are seeking your support at the Annual Meeting
to elect the Nominees in opposition to Pomeroy's director nominees. Your vote to
elect the  Nominees  will have the legal  effect of  replacing  three  incumbent
directors of Pomeroy with our Nominees.  If elected, the Nominees will represent
a minority of the members of the Pomeroy Board.

                THE CASE AGAINST THE POMEROY BOARD AND MANAGEMENT

      We believe the  election  of the  Nominees  represents  the best means for
Pomeroy's  stockholders to maximize the value of their Shares.  As a significant
stockholder of Pomeroy, we have a vested interest in maximizing the value of the
Shares.  If elected  to the  Pomeroy  Board,  the  Nominees  will use their best
efforts to improve the Company's  operating  performance and implement corporate
governance  reform  while  exploring  all  potential  alternatives  to  maximize
stockholder  value.  We  believe  that these  improvements  can only begin to be
implemented  with better  leadership on the Board and management  level.  Better
leadership,  in our  opinion,  cannot be achieved  unless we bring an end to the
family-dominated  regime  -- led by  Chairman  David  Pomeroy  and his son,  CEO
Stephen Pomeroy -- that in our opinion currently runs the Company.

      We  would  like to make it clear  that we are  engaging  in this  election
contest as a last resort.  As discussed in further detail in the  "Background to
Solicitation",  we made numerous  efforts to enter into  meaningful  discussions
with the Pomeroy Board and  management to discuss our concerns with the Company.
At one point, we submitted a settlement proposal at the request of the Corporate
Governance  Committee  that Ken Waters  stated he would  present to the  Pomeroy
Board with his full support.  Rather than  responding  directly to our proposal,
Pomeroy issued a press release  announcing that it will be undertaking  multiple
initiatives to enhance the effectiveness of the Pomeroy Board without mentioning
our  settlement  proposal.  We  believe  the  Corporate  Governance  Committee's
inability to broker a  settlement  that it  supported  demonstrates  Stephen and
David Pomeroy's  unchecked control over the Pomeroy Board and the need for truly
independent directors.

      We share a common interest with all  stockholders  in enhancing  long-term
performance and improving corporate  governance at the Company. We believe these
changes  can begin to be  implemented  with the  election  of our  Nominees.  We
believe these changes  would not only benefit the  stockholders  but also have a
positive  effect on the  Company's  relations  with its  customers and employees
which, in our opinion, are its two most valuable assets.

   WE DO NOT HAVE FAITH IN MANAGEMENT'S ABILITY TO MAXIMIZE STOCKHOLDER VALUE
 UNDER THE LEADERSHIP OF CHAIRMAN DAVID POMEROY AND HIS SON, CEO STEPHEN POMEROY

      We  believe  that  Pomeroy is well  positioned  to take  advantage  of the
current  IT  market,  but in order to do so  effectively,  the  Company  must be
transformed from a  family-dominated  business to one that puts the interests of
the  stockholders  ahead of the interests of the Pomeroy  family.  Over the past
several  years,  the  founding  Pomeroy  family has made  decisions  that in our
opinion  appear to be driven by their own personal  interests.  These  decisions
have had a detrimental effect on the stockholders.


                                      -10-


SUCCESSION OF POWER FROM DAVID POMEROY TO STEPHEN POMEROY

      In June 2004,  Stephen  Pomeroy was appointed CEO of the Company after his
father, David Pomeroy,  stepped down from this position which he held for over a
decade.  We do not believe  that Stephen  Pomeroy,  who has been working for the
Company under the guardianship of his father since graduating from college, is a
suitable or qualified  leader for this job as discussed in further detail below.
BASED ON OUR  DISCUSSIONS  WITH  INDEPENDENT  BOARD MEMBERS  WILLIAM LOMICKA AND
RONALD  KRIEG,  THERE WAS NO FORMAL  PROCESS TO IDENTIFY  AND HIRE A CEO FOR THE
COMPANY WHEN STEPHEN POMEROY WAS PROMOTED TO THIS POSITION.  NO OTHER CANDIDATES
WERE  FORMALLY  INTERVIEWED  FOR THE  POSITION  AND NO OUTSIDE  SEARCH  FIRM WAS
RETAINED.  In our  opinion,  the Pomeroy  Board's  approval  of the  transfer of
leadership  from David to Stephen  Pomeroy  without  undertaking  an  exhaustive
search for the best  qualified CEO available is a sign of their failure to serve
as an effective, independent check on the Pomeroy family.

EXORBITANT COMPENSATION OF CEO STEPHEN POMEROY

      We do not believe  Stephen  Pomeroy has been an effective  leader.  During
Stephen  Pomeroy's  tenure as CEO,  the  Company's  financial  and  share  price
performance have suffered,  the Company made  embarrassing  accounting errors in
its financial statement disclosure, the Company has consistently missed guidance
and employee  attrition  rates have risen.  Despite  Stephen  Pomeroy's  lack of
effectiveness, he was awarded an exorbitant compensation package.

   o  DURING HIS FIRST FULL YEAR AS CEO,  STEPHEN POMEROY EARNED $1.9 MILLION IN
      COMPENSATION,  NOT EVEN  INCLUDING A  SUBSTANTIAL  AWARD OF 140,750  STOCK
      OPTIONS.

   o  According to the Company's  proxy statement for the 2006 annual meeting of
      stockholders,  the  140,750  options  are  valued at  approximately  $1.15
      million  assuming  Pomeroy's  stock  appreciates  at 10% per year over the
      option term. TAKING INTO CONSIDERATION  THIS ASSUMED POTENTIAL  REALIZABLE
      VALUE OF THE 140,750  STOCK  OPTIONS HE WAS AWARDED  DURING HIS FIRST FULL
      YEAR AS CEO,  TOTAL  COMPENSATION  FOR STEPHEN  POMEROY THAT YEAR WAS OVER
      $3.0 MILLION.

   o  ACCORDING TO THE COMPANY'S ANNUAL REPORT FOR FISCAL 2006,  STEPHEN POMEROY
      EARNED TOTAL COMPENSATION OF JUST OVER $1 MILLION WHICH ROUGHLY REPRESENTS
      THE COMPANY'S ENTIRE NET PROFIT FOR THAT YEAR.

   o  There are provisions in Stephen Pomeroy's  employment agreement that allow
      him to receive severance benefits following  termination of his employment
      for "Good  Reason"  including if he  terminates  his  employment  within a
      specified period  following  certain  specified  changes in control of the
      Company.

   o  Upon such  termination,  he would be entitled to receive his base  salary,
      bonus (no less than the average bonus awarded  during the prior two years)
      and all other  amounts under any  compensation  program of the Company for
      the balance of his applicable term.


                                      -11-


   o  WE ESTIMATE THAT STEPHEN  POMEROY WOULD BE ENTITLED TO A CHANGE IN CONTROL
      PAYMENT  EQUAL  TO AT  LEAST  $2.4  MILLION  ASSUMING  HE  TERMINATED  HIS
      EMPLOYMENT ON DECEMBER 31, 2006. THIS ESTIMATE ONLY REPRESENTS THE PAYMENT
      OVER THE REMAINING TERM OF HIS EMPLOYMENT OF HIS LAST REPORTED BASE SALARY
      AND  AVERAGE  BONUS  DURING  THE PRIOR TWO YEARS.  THIS  CHANGE IN CONTROL
      PAYMENT  DOES NOT EVEN INCLUDE  AMOUNTS HE WOULD  OTHERWISE BE ENTITLED TO
      RECEIVE UNDER THE COMPANY'S OTHER COMPENSATION PROGRAMS AND TAX GROSS UPS.

   o  Following a change in control of the  Company,  Stephen  Pomeroy  would be
      provided  with 150 HOURS OF FLIGHT TIME PER YEAR FOR  BUSINESS  USAGE BY A
      PRIVATE AIR CARRIER.

      We find these levels of  compensation  for an  individual  with no outside
executive  experience to be excessive.  We believe that  executive  compensation
should be linked to value delivered to stockholders  and that a public company's
compensation  programs  should be designed to provide a correlation  between the
financial  success of management  and the  stockholders.  We see no  correlation
between  Pomeroy's  poor  financial  performance  described  below  and  Stephen
Pomeroy's  compensation.  We question  whether  Stephen  Pomeroy would have been
awarded this exorbitant  compensation package,  benefited from other perquisites
such as use of a private  jet, or even served as an  executive of the Company to
begin with had it not been for his father.

LACK OF INDEPENDENCE OF CHAIRMAN DAVID POMEROY

      David  Pomeroy has related  party  arrangements  with the Company  that we
believe  make it  difficult  for him to  exercise  independent  judgment  and to
perform  his duties of Chairman  of the Board with due care and  loyalty.  David
Pomeroy  controls  the entity  from which the Company  leases its  headquarters,
distribution facility and national training center for over $1 million per year.
In addition,  after David  Pomeroy was  succeeded by his son as CEO, the Company
entered into a 5-year  "consulting  agreement" with David Pomeroy,  the terms of
which include the following:

   o  BASE COMPENSATION OF $250,000 PER YEAR.

   o  BONUS OF $100,000 PAYABLE IN THE FIRST QUARTER OF 2005.

   o  LUMP-SUM AWARD OF $750,000.

   o  ANNUAL HOUSING  ALLOWANCE OF $25,000 FOR THE COMPANY'S USE OF CERTAIN REAL
      PROPERTY IN ARIZONA OWNED BY AN ENTITY CONTROLLED BY DAVID POMEROY.

   o  MEDICAL AND DISABILITY INSURANCE COVERAGE TO THE SAME EXTENT SUCH BENEFITS
      ARE PROVIDED TO OTHER TOP EXECUTIVES OF THE COMPANY.

We believe  this  consulting  arrangement  not only calls  into  question  David
Pomeroy's ability to exercise independent oversight as Chairman of the Board but
is also a shining  example of how the Pomeroy family has run the Company for its
own personal  benefit.  We do not see the need to pay David Pomeroy  $250,000 in
base compensation and $25,000 in housing  allowances per year over the course of
five years for "consulting" services after stepping down as CEO.

      IF THE COMPANY WAS PLANNING ON  CONTINUING  TO AWARD DAVID  POMEROY WITH A
HIGH SALARY AND OTHER  BENEFITS  CONSISTENT  WITH THOSE AWARDED TO ITS OTHER TOP
EXECUTIVES,  WHY DID HE STEP DOWN AS CEO IN THE FIRST PLACE AND WHAT  ADDITIONAL
VALUE DOES  STEPHEN  POMEROY  BRING TO THE  COMPANY  THAT  JUSTIFIES  PAYING HIS
EXORBITANT COMPENSATION? EVEN PUTTING ASIDE DAVID POMEROY'S COMPENSATION PACKAGE
AND RELATED PARTY TRANSACTIONS, DO YOU BELIEVE HE WOULD BE CAPABLE OF EXERCISING
INDEPENDENT JUDGMENT IF HE WERE TO CONSIDER, BY WAY OF EXAMPLE,  WHETHER HIS SON
SHOULD BE FIRED FOR POOR PERFORMANCE?


                                      -12-


        DURING THE PAST FEW YEARS, POMEROY'S FINANCIAL RESULTS HAVE BEEN
  DISAPPOINTING AND THE COMPANY HAS MADE EMBARRASSING ACCOUNTING ERRORS IN ITS
                              FINANCIAL DISCLOSURE

      Pomeroy's   financial  results  over  the  past  two  years  have  been  a
disappointment to us. During this time, Pomeroy has achieved its worst operating
results in at least a decade and had to restate its financial  statements due to
accounting errors.

POOR OPERATING RESULTS AND PROBLEMATIC ARC INTEGRATION

      During  the past two  years,  Pomeroy  has  achieved  its worst  operating
results in at least a decade.

         o  POMEROY  RECORDED AN OPERATING  LOSS OF $15.8 MILLION IN 2005 AND AN
            OPERATING  PROFIT  OF $2.7  MILLION  IN 2006.  THIS  COMPARES  TO AN
            OPERATING PROFIT OF $18.4 MILLION IN 2004.

         o  GIVING POMEROY THE BENEFIT OF BACKING OUT ITS GOODWILL CHARGES,  THE
            COMPANY  WOULD  STILL HAVE ONLY  REPORTED  OPERATING  PROFIT OF $0.2
            MILLION IN 2005 AND $6.2 MILLION IN 2006.

         o  PRODUCT  REVENUES  DROPPED TO $373 MILLION IN 2006 FROM $545 MILLION
            IN 2004, AN ALARMING 32% DECLINE.

      We believe this performance is even more  unacceptable  when you take into
account Pomeroy's  acquisition of Alternative  Resources  Corporation ("ARC") in
July 2004 for cash and assumed debt nearly equal to the Company's current equity
market capitalization. Based on conversations with Kevin Gregory and independent
directors,  as well as the financial restatements in 2005, we believe management
mishandled the integration of ARC by not adequately preparing its IT systems and
by  mismanaging  ARC's  greatest  asset,  its  employees.  As a  result  of  the
problematic  integration of ARC, this expensive merger did not have the benefits
most stockholders should have expected.

ACCOUNTING ERRORS AND RESTATEMENTS

      After  Stephen  Pomeroy took over as CEO,  the Company  made  embarrassing
accounting  errors in its financial  disclosure  leading to  restatements of its
Forms 10-Q for the quarters ended April 5, 2005 and July 5, 2005.  DESPITE THESE
RESTATEMENTS,  MANAGEMENT STILL DID NOT MAINTAIN EFFECTIVE INTERNAL CONTROL OVER
FINANCIAL  REPORTING  NECESSARY  TO PREVENT  FURTHER  ACCOUNTING  ERRORS.  AS OF
JANUARY 5, 2006,  MANAGEMENT IDENTIFIED MATERIAL WEAKNESSES IN FOUR AREAS OF THE
COMPANY'S INTERNAL CONTROLS OVER ITS FINANCIAL REPORTING. We believe the Pomeroy
Board  should be held  accountable  for these  accounting  errors  and  material
weaknesses.


                                      -13-


  WE BELIEVE POMEROY'S POISON PILL AND OTHER ANTI-TAKEOVER PROVISIONS ENTRENCH
            THE POMEROY BOARD AND MANAGEMENT AND SHOULD BE ELIMINATED

      We believe Pomeroy has onerous anti-takeover  provisions that insulate the
incumbent directors from being accountable to stockholders. In 1998, the Pomeroy
Board  adopted a rights  plan or "poison  pill" that we believe  entrenches  the
Pomeroy Board and management. THE FACT THAT THE POISON PILL SPECIFICALLY EXEMPTS
DAVID  POMEROY,  ANY  MEMBER  OF HIS  IMMEDIATE  FAMILY  AND ANY OF HIS OR THEIR
AFFILIATES  OR  ASSOCIATES  ONCE AGAIN  DEMONSTRATES  HOW THE POMEROY  FAMILY IS
TREATING  THE COMPANY AS ITS OWN PRIVATE  FIEFDOM.  If the Nominees are elected,
they will use their best  efforts to cause the Pomeroy  Board to  terminate  the
poison pill.

      Pomeroy's  Certificate of  Incorporation  and Bylaws also contain numerous
anti-takeover  provisions  that we also  believe are  intended  to entrench  the
Pomeroy  Board  and  management  to the  detriment  of the  stockholders.  These
anti-takeover provisions include, but are not limited to, the following:

   o  STOCKHOLDERS ARE NOT PERMITTED TO CALL SPECIAL MEETINGS OF STOCKHOLDERS.

   o  DIRECTORS  MAY BE REMOVED  FROM OFFICE  ONLY FOR CAUSE BY THE  AFFIRMATIVE
      VOTE OF THE HOLDERS OF AT LEAST  TWO-THIRDS OF THE  OUTSTANDING  SHARES OF
      STOCK ENTITLED TO CAST VOTES IN THE ELECTION OF DIRECTORS  (ALTHOUGH WE DO
      NOT BELIEVE THIS PROVISION IS ENFORCEABLE UNDER DELAWARE LAW).

   o  THE FOREGOING ANTI-TAKEOVER PROVISIONS AND CERTAIN OTHER PROVISIONS OF THE
      CERTIFICATE OF INCORPORATION  AND BYLAWS MAY BE AMENDED OR REPEALED BY THE
      STOCKHOLDERS  ONLY BY THE  AFFIRMATIVE  VOTE OF THE  HOLDERS  OF AT  LEAST
      TWO-THIRDS OF THE VOTING POWER OF THE OUTSTANDING SHARES OF STOCK ENTITLED
      TO CAST VOTES IN THE ELECTION OF DIRECTORS.

While we acknowledge  that the Company's  directors owe fiduciary  duties to the
stockholders  and that all  directors  of the Company are elected  annually,  we
believe  that  these  anti-takeover  provisions  have the  effect of  insulating
directors  from  being  held   accountable  to   stockholders.   To  the  extent
stockholders wish to remove the Company's directors,  they can be forced to wait
up to one year in  order to  remove  the  directors  at the  annual  meeting  of
stockholders  set by the Company  rather than being  permitted to call a special
meeting  of  stockholders  at  any  time  for  this  purpose.  Furthermore,  the
Certificate  of  Incorporation  provides  that  stockholders  who wish to remove
directors  may only do so for cause and by a  supermajority  vote  rather than a
simple  majority.  We believe the  stockholders  of the Company  should have the
opportunity  to hold the  directors  accountable  at all times,  not just once a
year, and that the minimum  requirements  under Delaware law to remove directors
without  cause and by a majority  vote should apply to the Company.  If elected,
the Nominees will, subject to their fiduciary duties,  urge the Pomeroy Board to
eliminate these anti-takeover provisions.

             WE BELIEVE POMEROY'S SHARE PRICE HAS SUFFERED UNDER THE
                          COMPANY'S CURRENT LEADERSHIP

      We are frustrated with Pomeroy's lackluster Share price performance during
a time when in general the rest of the IT industry thrived.  We believe that the
Pomeroy Board's  inability to set effective  policy and make the right strategic
decisions has contributed to this performance.

   o  As  illustrated in Pomeroy's Form 10-K for the year ended January 5, 2007,
      during  the  period  from  January  5, 2002  through  January 5, 2007 (the
      "Measurement  Period"),  Pomeroy's Share price performance trailed the S&P
      500 Stock Index and the NASDAQ Composite Index by a significant margin.

   o  During the  Measurement  Period,  AN INVESTMENT IN POMEROY WOULD HAVE LOST
      42.5% OF ITS VALUE  COMPARED  TO A GAIN OF 20.2%  HAD THE SAME  INVESTMENT
      BEEN  MADE  IN THE  S&P  500  STOCK  INDEX  AND A GAIN  OF  17.5%  HAD THE
      INVESTMENT BEEN MADE IN THE NASDAQ COMPOSITE INDEX.


                                      -14-


    WE WISH TO PROVIDE THE STOCKHOLDERS, THE TRUE OWNERS OF POMEROY, WITH THE
     OPPORTUNITY TO ELECT DIRECTORS THAT ARE UNAFFILIATED WITH THE EXISTING
                                    DIRECTORS

      We believe the election of the Nominees will  represent the best means for
stockholders  to maximize the present  value of their  Shares.  If elected,  the
Nominees'  first  priority  would be to work with the  independent  directors to
maximize  stockholder  value and  ensure  that the  Company is being run for the
benefit  of the  stockholders  - the true  owners  of the  Company - and not the
Pomeroy family. We believe these changes would not only benefit the stockholders
but also have a positive  effect on the Company's  relations  with its customers
and employees which, in our opinion, are its two most valuable assets.

WE  STRONGLY  URGE YOU TO VOTE "FOR" THE  ELECTION  OF OUR  NOMINEES BY SIGNING,
DATING AND  RETURNING  YOUR GOLD PROXY CARD TODAY IN THE  ENCLOSED  POSTAGE-PAID
ENVELOPE.


                                      -15-


THE NOMINEES

      The following  information  sets forth the name,  age,  business  address,
present  principal   occupation,   and  employment  and  material   occupations,
positions,  offices, or employments for more than the past five years of each of
the  Nominees.  This  information  has been  furnished  to Flagg  Street  by the
Nominees. The Nominees are citizens of the United States of America.

      JONATHAN STARR (AGE 30) is a founding  member of Flagg Street Capital LLC,
an investment  firm,  and has served as its  Portfolio  Manager since June 2004.
From  May  2001 to  January  2003,  he was a  research  analyst  at SAB  Capital
Management,  L.P., an  opportunistic  investment  firm. From April 2000 to April
2001,  Mr. Starr worked as an investment  analyst for Blavin & Company,  a value
investment  partnership.  From  June  1998  to  April  2000,  he was a  research
associate  at Fidelity  Management  Research.  Mr.  Starr  graduated  from Emory
University in 1998 with a B.A.,  summa cum laude,  in Economics and was a member
of Phi Beta Kappa. The business address of Mr. Starr is c/o Flagg Street Capital
LLC, 44 Brattle Street,  Cambridge,  MA 02138. Mr. Starr, as the founding member
of the Flagg Street Funds with the power to exercise investment discretion,  may
be deemed to be the beneficial  owner of all the  securities  owned by the Flagg
Street  Funds.  Mr.  Starr,  as a  member  of the  Group,  is  deemed  to be the
beneficial  owner  of all the  Shares  owned  by the  Flagg  Street  Funds.  For
information regarding purchases and sales during the past two years by the Flagg
Street Funds of securities of Pomeroy that are deemed to be  beneficially  owned
by Mr. Starr, see Schedule I.

      MICHAEL A. RUFFOLO (AGE 45) has served as the Chief  Executive  Officer of
Liquid Machines, Inc., an enterprise rights management provider, since September
2004.  From August 2001 to September 2003, he served as Executive Vice President
of  Akamai  Technologies,   Inc.  ("Akamai"),  a  global  service  provider  for
accelerating content and business processes online. From September 2003 to March
2004, he served as Chief Operating Officer of Akamai.  From January 2000 to June
2001,  he served  as  Executive  Vice  President,  Global  Sales,  Services  and
Marketing,  of  EMC  Corporation,   a  developer  and  provider  of  information
infrastructure  technology  and  solutions.  From 1998 to 2000,  Mr. Ruffolo was
President,  Document  Solutions  Group,  of Xerox  Corporation,  a  provider  of
document outsourcing solutions,  services,  software and supplies.  From 1988 to
1998, he served in various capacities with NCR Corporation,  a global technology
company,  including  Vice President and Chief  Information  Officer from 1996 to
1998. Mr.  Ruffolo  graduated from the University of Dayton in 1982 with a B.S.,
summa cum laude, in Business  Administration and from Harvard Business School in
1988 with an M.B.A.  The business address of Mr. Ruffolo is c/o Liquid Machines,
Inc., 486 Totten Pond Road,  Waltham, MA 02451. Mr. Ruffolo has not purchased or
sold during the past two years any  securities  of Pomeroy.  Mr.  Ruffolo,  as a
member of the  Group,  is deemed to be the  beneficial  owner of all the  Shares
owned by the Flagg Street Funds. For information  regarding  purchases and sales
during the past two years by the Flagg  Street  Funds of  securities  of Pomeroy
that are deemed to be beneficially owned by Mr. Ruffolo, see Schedule I.

      RICHARD S.  PRESS  (AGE 68) has served as a member of the Global  Advisory
Group of Standish Mellon Asset  Management  Company,  an asset  management firm,
since April 2007. He has served as a Director of Transatlantic Holdings, Inc., a
reinsurance  company,  since  August  2006.  He has  served  as a member  of the
Investment Committee of Controlled Risk Insurance Company, a medical malpractice
insurance  company,  since  September  2006.  Mr.  Press  served as Senior  Vice
President  and  Director,   Insurance  Asset  Management  Group,  of  Wellington
Management  Company,  an asset  management firm, from 1994 to 2006. From 1982 to
1994,  he  served  as  Senior  Vice  President  and  Director,  Insurance  Asset
Management,  of Stein,  Roe & Farnham,  an asset  management  firm. From 1964 to
1982,  he served  as a Vice  President  of  Scudder  Stevens  & Clark,  an asset
management  firm. Mr. Press graduated from Brown  University in 1960 with a B.A.
in  Economics  and from  Harvard  Business  School in 1962  with an  M.B.A.  The
business address of Mr. Press is 101 Bogle Street,  Weston,  MA 02493. Mr. Press
has not  purchased or sold during the past two years any  securities of Pomeroy.
Mr. Press, as a member of the Group, is deemed to be the beneficial owner of all
the Shares owned by the Flagg Street Funds. For information  regarding purchases
and sales during the past two years by the Flagg Street Funds of  securities  of
Pomeroy that are deemed to be beneficially owned by Mr. Press, see Schedule I.


                                      -16-


      The Nominees will not receive any compensation from Flagg Street for their
services as  directors  of Pomeroy.  Other than as stated  herein,  there are no
arrangements or  understandings  between Flagg Street and any of the Nominees or
any other person or persons pursuant to which the nomination described herein is
to be made,  other than the consent by each of the  Nominees to be named in this
Proxy  Statement and to serve as a director of Pomeroy if elected as such at the
Annual  Meeting.  No  participant  in this  solicitation  is a party  adverse to
Pomeroy or any of its subsidiaries or has a material interest adverse to Pomeroy
or any of its subsidiaries in any material pending legal proceedings.

      We do not expect that the Nominees  will be unable to stand for  election,
but,  in the event that such  persons are unable to serve or for good cause will
not serve, the Shares  represented by the enclosed GOLD proxy card will be voted
for substitute  nominees,  to the extent this is not prohibited  under Pomeroy's
Bylaws  and  applicable  law.  In  addition,  we reserve  the right to  nominate
substitute  persons if Pomeroy  makes or announces  any changes to its Bylaws or
takes or announces any other action that has, or if consummated  would have, the
effect of disqualifying the Nominees, to the extent this is not prohibited under
the Bylaws and  applicable  law.  In any such case,  Shares  represented  by the
enclosed GOLD proxy card will be voted for such substitute nominees.  We reserve
the right to nominate  additional  persons, to the extent this is not prohibited
under Pomeroy's Bylaws and applicable law, if the Company  increases the size of
the Pomeroy  Board above its existing  size or increases the number of directors
whose terms expire at the Annual Meeting.  Additional  nominations made pursuant
to the preceding sentence are without prejudice to our position that any attempt
to increase the size of the Pomeroy Board or to  reconstitute or reconfigure the
classes  on  which  the  current   directors   serve   constitutes  an  unlawful
manipulation of the Company's corporate machinery.

YOU ARE URGED TO VOTE FOR THE  ELECTION  OF THE  NOMINEES ON THE  ENCLOSED  GOLD
PROXY CARD.


                                      -17-


                                 PROPOSAL NO. 2

              COMPANY PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT
                        REGISTERED PUBLIC ACCOUNTING FIRM

      As discussed  in further  detail in the  Company's  proxy  statement,  the
Company's Audit Committee engaged BDO Seidman, LLP as the Company's  independent
registered  public  accounting  firm for fiscal year 2007. The Company is asking
stockholders to ratify the Audit Committee's  appointment of BDO Seidman, LLP as
independent auditors for the Company's 2007 fiscal year.

      We do not object to the  ratification  of the  appointment of BDO Seidman,
LLP as the Company's independent auditors for the Company's 2007 fiscal year.


                                      -18-



VOTING AND PROXY PROCEDURES

      Only  stockholders of record on the Record Date will be entitled to notice
of and to vote at the  Annual  Meeting.  Each  Share is  entitled  to one  vote.
Stockholders  who sell Shares  before the Record Date (or acquire  them  without
voting rights after the Record Date) may not vote such Shares.  Stockholders  of
record on the Record Date will retain their voting rights in connection with the
Annual  Meeting even if they sell such Shares  after the Record  Date.  Based on
publicly  available  information,  we believe that the only outstanding class of
securities of Pomeroy  entitled to vote at the Annual  Meeting are its shares of
Common Stock.

      Shares  represented by properly executed GOLD proxy cards will be voted at
the Annual Meeting as marked and, in the absence of specific instructions,  will
be  voted  FOR the  election  of the  Nominees  to the  Pomeroy  Board,  FOR the
candidates  who have been  nominated  by the Company  other than David  Pomeroy,
Stephen Pomeroy and Vincent Rinaldi,  FOR the ratification of the appointment of
BDO Seidman,  LLP and in the  discretion  of the persons named as proxies on all
other matters as may properly come before the Annual Meeting.

      According to Pomeroy's proxy statement for the Annual Meeting, the Pomeroy
Board  intends to nominate  nine  candidates  for  election as  directors at the
Annual Meeting. This Proxy Statement is soliciting proxies to elect not only our
Nominees,  but also the  candidates who have been nominated by the Company other
than David Pomeroy, Stephen Pomeroy and Vincent Rinaldi. This gives stockholders
who wish to vote for our Nominees  and such other  persons the ability to do so.
Under  applicable proxy rules we are required either to solicit proxies only for
our  Nominees,  which could  result in limiting the ability of  stockholders  to
fully  exercise  their voting rights with respect to Pomeroy's  nominees,  or to
solicit for our Nominees and for fewer than all of the Company's nominees, which
enables a  stockholder  who  desires to vote for our  Nominees  to also vote for
those of the Company's nominees for whom we are soliciting  proxies.  The names,
backgrounds and qualifications of the Company's nominees,  and other information
about them, can be found in the Company's proxy statement. There is no assurance
that any of the  Company's  nominees will serve as directors if our Nominees are
elected.

QUORUM

      In order to conduct any business at the Annual  Meeting,  a quorum must be
present  in person or  represented  by valid  proxies.  A quorum  consists  of a
majority of the Shares  issued and  outstanding  on the Record Date.  All Shares
that are voted  "FOR",  "AGAINST"  or "ABSTAIN"  (or  "WITHHOLD"  in the case of
election of directors) on any matter will count for purposes of  establishing  a
quorum and will be treated as Shares entitled to vote at the Annual Meeting (the
"Votes Present").

VOTES REQUIRED FOR APPROVAL

      ELECTION OF  DIRECTORS.  A plurality of the total votes cast by holders of
the Shares for the Nominees is required  for the  election of directors  and the
nine  nominees who receive the most votes will be elected  (assuming a quorum is
present).  A vote to "WITHHOLD" for any nominee for director will be counted for
purposes of determining the Votes Present,  but will have no other effect on the
outcome of the vote on the election of directors.  A  stockholder  may cast such
votes for the Nominees  either by so marking the ballot at the Annual Meeting or
by specific voting  instructions sent with a signed proxy to either Flagg Street
in care of Morrow & Co., Inc. at the address set forth on the back cover of this
Proxy Statement or to Pomeroy at 1020 Petersburg Road,  Hebron,  KY 41048 or any
other address provided by Pomeroy.

      RATIFICATION OF APPOINTMENT OF BDO SEIDMAN,  LLP. The affirmative  vote of
the  holders of a majority  of the Shares  present in person or  represented  by
proxy at the Annual  Meeting is  required  to approve  the  ratification  of the
appointment of BDO Seidman, LLP.


                                      -19-


ABSTENTIONS

      Abstentions  will count as Votes  Present for the  purpose of  determining
whether a quorum is  present.  Abstentions  will not be counted as votes cast in
the election of  directors.  Abstentions  will have the effect of a vote against
the proposal to ratify the appointment of BDO Seidman, LLP.

DISCRETIONARY VOTING

      Shares  held in  "street  name" and held of record  by banks,  brokers  or
nominees  may not be  voted  by such  banks,  brokers  or  nominees  unless  the
beneficial owners of such Shares provide them with instructions on how to vote.

REVOCATION OF PROXIES

      Stockholders  of  Pomeroy  may revoke  their  proxies at any time prior to
exercise  by  attending  the  Annual  Meeting  and  voting in  person  (although
attendance at the Annual Meeting will not in and of itself constitute revocation
of a proxy) or by delivering a written notice of  revocation.  The delivery of a
subsequently   dated  proxy  which  is  properly  completed  will  constitute  a
revocation of any earlier proxy. The revocation may be delivered either to Flagg
Street in care of Morrow & Co.,  Inc. at the address set forth on the back cover
of this Proxy Statement or to Pomeroy at 1020 Petersburg Road,  Hebron, KY 41048
or any other address provided by Pomeroy.  Although a revocation is effective if
delivered to Pomeroy,  we request that either the original or photostatic copies
of all  revocations  be mailed to Flagg Street in care of Morrow & Co.,  Inc. at
the address set forth on the back cover of this Proxy  Statement so that we will
be  aware  of all  revocations  and can more  accurately  determine  if and when
proxies  have been  received  from the holders of record on the Record Date of a
majority of the  outstanding  Shares.  Additionally,  Morrow & Co., Inc. may use
this information to contact stockholders who have revoked their proxies in order
to solicit later dated proxies for the election of the Nominees.

IF YOU WISH TO VOTE FOR THE ELECTION OF THE NOMINEES TO THE POMEROY BOARD OR FOR
THE  RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN,  LLP, PLEASE SIGN, DATE AND
RETURN  PROMPTLY  THE  ENCLOSED  GOLD  PROXY CARD IN THE  POSTAGE-PAID  ENVELOPE
PROVIDED.

                             SOLICITATION OF PROXIES

      The solicitation of proxies pursuant to this Proxy Statement is being made
by the  members of the  Group.  Proxies  may be  solicited  by mail,  facsimile,
telephone, telegraph, Internet, in person and by advertisements.

      FSGP  has  entered  into  an  agreement   with  Morrow  &  Co.,  Inc.  for
solicitation  and advisory  services in connection with this  solicitation,  for
which Morrow & Co., Inc. will receive a fee not to exceed  $75,000.00,  together
with  reimbursement  for its  reasonable  out-of-pocket  expenses,  and  will be
indemnified  against  certain   liabilities  and  expenses,   including  certain
liabilities  under the federal  securities laws. Morrow & Co., Inc. will solicit
proxies from individuals,  brokers, banks, bank nominees and other institutional
holders.  We have  requested  banks,  brokerage  houses  and  other  custodians,
nominees and fiduciaries to forward all solicitation materials to the beneficial
owners of the Shares they hold of record. We will reimburse these record holders
for their reasonable  out-of-pocket expenses in so doing. It is anticipated that
Morrow & Co., Inc.  will employ  approximately  25 persons to solicit  Pomeroy's
stockholders for the Annual Meeting.


                                      -20-


      The entire  expense  of  soliciting  proxies  is being  borne by the Flagg
Street  Funds  pursuant  to the  terms  of the  Joint  Filing  and  Solicitation
Agreement  (as  defined  below).  Costs  of this  solicitation  of  proxies  are
currently  estimated  to be  approximately  $250,000.  The  Flagg  Street  Funds
estimate  that through the date hereof,  its  expenses in  connection  with this
solicitation are approximately  $120,000.  The Flagg Street Funds intend to seek
reimbursement  from Pomeroy of all expenses  they incur in  connection  with the
solicitation of proxies for the election of the Nominees to the Pomeroy Board at
the Annual Meeting.  The Flagg Street Funds do not intend to submit the question
of such reimbursement to a vote of security holders of Pomeroy.


                                      -21-


                          OTHER PARTICIPANT INFORMATION

      Each member of the Group is a participant in this  solicitation.  Jonathan
Starr is the founding member of FSGP. FSGP is the general partner of each of the
Flagg Street Funds. The principal  business of each of the Flagg Street Funds is
that  of a  private  investment  fund  engaging  in the  purchase  and  sale  of
investments for its own account. The principal business of FSGP is acting as the
general partner of each of the Flagg Street Funds.  The principal  occupation of
Jonathan  Starr is serving as the  portfolio  manager  for FSGP.  The  principal
business  address  of the Flagg  Street  Funds,  FSGP and  Jonathan  Starr is 44
Brattle Street,  Cambridge,  MA 02138. As of the date hereof, FSP directly owned
113,677  Shares,  FSPQ directly  owned 316,444  Shares,  and FSO directly  owned
819,204 Shares.  FSGP, as the general partner of the Flagg Street Funds,  may be
deemed to be the beneficial  owner of all  securities  owned by the Flagg Street
Funds. Jonathan Starr, as the founding member of FSGP with the power to exercise
investment  discretion,  may  be  deemed  to be  the  beneficial  owner  of  all
securities  owned  by  the  Flagg  Street  Funds.  The   consideration  for  the
acquisition  of the Shares owned by the Flagg  Street  Funds was funded  through
funds  invested by partners in the Flagg Street Funds (and proceeds  therefrom).
Since a portion of such Shares were  purchased  in, and such Shares from time to
time may be held in,  margin  accounts,  along  with  other  investments,  it is
impracticable  to determine the amounts,  if any,  borrowed with respect to such
Shares. Currently, neither Michael A. Ruffolo nor Richard S. Press directly owns
any  Shares.  Each of the  participants  in this  solicitation,  as members of a
"group" for the purposes of Section  13(d)(3) of the Securities  Exchange Act of
1934, as amended,  is deemed to be a beneficial  owner of all  1,249,325  Shares
owned by the Flagg Street Funds.  Each of the participants in this  solicitation
disclaims  beneficial  ownership of Shares that he or it does not directly  own.
Richard S.  Press and his spouse are  investors,  directly  and  indirectly,  in
certain of the Flagg Street Funds. For information regarding purchases and sales
of  securities  of Pomeroy  during the past two years by the Flagg Street Funds,
see Schedule I.

      On April 3, 2007, the members of the Group entered into a Joint Filing and
Solicitation  Agreement in which,  among other things, (i) the parties agreed to
the joint  filing on behalf of each of them of  statements  on Schedule 13D with
respect to the securities of Pomeroy, (ii) the parties agreed to solicit proxies
or written consents to elect the Nominees or any other person  designated by the
Group  as  directors  of  Pomeroy  and to take all  other  action  necessary  or
advisable to achieve the foregoing (the  "Solicitation"),  and (iii) each of the
Flagg Street Funds agreed to bear all expenses  incurred in connection  with the
Group's  activities,  including approved expenses incurred by any of the parties
in connection with the Solicitation,  on a pro-rata basis based on the number of
Shares owned by each of the Flagg Street Funds.

      Pursuant to letter  agreements dated April 3, 2007, the Flagg Street Funds
agreed to jointly and severally  indemnify  each of the Nominees  against claims
arising from the Solicitation and any related transactions.

      Except as set  forth in this  Proxy  Statement  (including  the  Schedules
hereto),  (i) during the past 10 years, no participant in this  solicitation has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors);  (ii) no participant in this solicitation  directly or indirectly
beneficially  owns any  securities  of  Pomeroy;  (iii) no  participant  in this
solicitation  owns any  securities  of Pomeroy which are owned of record but not
beneficially; (iv) no participant in this solicitation has purchased or sold any
securities  of Pomeroy  during the past two years;  (v) no part of the  purchase
price or market value of the  securities of Pomeroy owned by any  participant in


                                      -22-


this solicitation is represented by funds borrowed or otherwise obtained for the
purpose of acquiring or holding such  securities;  (vi) no  participant  in this
solicitation  is,  or  within  the  past  year  was,  a party  to any  contract,
arrangements or understandings with any person with respect to any securities of
Pomeroy,  including,  but  not  limited  to,  joint  ventures,  loan  or  option
arrangements,  puts or calls,  guarantees  against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies; (vii) no
associate of any participant in this solicitation owns beneficially, directly or
indirectly,   any   securities  of  Pomeroy;   (viii)  no  participant  in  this
solicitation owns  beneficially,  directly or indirectly,  any securities of any
parent or subsidiary of Pomeroy; (ix) no participant in this solicitation or any
of  his/its  associates  was a party to any  transaction,  or series of  similar
transactions,  since the beginning of Pomeroy's  last fiscal year, or is a party
to any currently proposed  transaction,  or series of similar  transactions,  to
which Pomeroy or any of its  subsidiaries  was or is to be a party, in which the
amount involved exceeds $120,000; (x) no participant in this solicitation or any
of his/its  associates has any arrangement or understanding with any person with
respect to any future  employment by Pomeroy or its affiliates,  or with respect
to any future transactions to which Pomeroy or any of its affiliates will or may
be a party; and (xi) no person, including the participants in this solicitation,
who is a party to an arrangement or understanding pursuant to which the Nominees
are proposed to be elected has a substantial  interest,  direct or indirect,  by
security  holdings  or  otherwise  in any  matter  to be acted on at the  Annual
Meeting.

                    OTHER MATTERS AND ADDITIONAL INFORMATION

OTHER MATTERS

      Flagg  Street is unaware  of any other  matters  to be  considered  at the
Annual Meeting.  However,  should other matters, which Flagg Street is not aware
of a  reasonable  time before this  solicitation,  be brought  before the Annual
Meeting,  the persons named as proxies on the enclosed GOLD proxy card will vote
on such matters in their discretion.

STOCKHOLDER PROPOSALS

      In order to be eligible for inclusion in Pomeroy's proxy statement for the
2008 annual meeting of stockholders,  stockholder  proposals must be received by
the  Secretary of the Company at its principal  office,  1020  Petersburg  Road,
Hebron,  KY 41048,  by  February 8, 2008.  Stockholders  who intend to present a
proposal at such meeting  without  inclusion of such proposal in Pomeroy's proxy
materials  pursuant to Rule 14a-8 under the Securities  Exchange Act of 1934, as
amended,  are  required  to  provide  advance  notice  of such  proposal  to the
Secretary of the Company at the aforementioned  address not later than April 24,
2008. If Pomeroy does not receive  notice of such a  stockholder  proposal on or
before April 24,  2008,  the  Company's  management  will use its  discretionary
authority to vote the Shares that they represent by proxy in accordance with the
recommendations of the Pomeroy Board.

      The  information  set forth above  regarding the procedures for submitting
stockholder  proposals for  consideration  at Pomeroy's  2008 annual  meeting of
stockholders is based on information contained in the Company's proxy statement.
The  incorporation  of this  information in this Proxy  Statement  should not be
construed  as an  admission  by us that  such  procedures  are  legal,  valid or
binding.


                                      -23-


INCORPORATION BY REFERENCE

      WE HAVE OMITTED FROM THIS PROXY STATEMENT CERTAIN  DISCLOSURE  REQUIRED BY
APPLICABLE  LAW THAT IS EXPECTED TO BE INCLUDED  IN  POMEROY'S  PROXY  STATEMENT
RELATING TO THE ANNUAL MEETING.  THIS  DISCLOSURE IS EXPECTED TO INCLUDE,  AMONG
OTHER THINGS,  CURRENT BIOGRAPHICAL  INFORMATION ON POMEROY'S CURRENT DIRECTORS,
INFORMATION CONCERNING EXECUTIVE COMPENSATION,  AND OTHER IMPORTANT INFORMATION.
ALTHOUGH WE DO NOT HAVE ANY KNOWLEDGE  INDICATING  THAT ANY STATEMENT MADE BY US
HEREIN  IS  UNTRUE,  WE DO NOT  TAKE  ANY  RESPONSIBILITY  FOR THE  ACCURACY  OR
COMPLETENESS OF STATEMENTS TAKEN FROM PUBLIC DOCUMENTS AND RECORDS THAT WERE NOT
PREPARED BY OR ON OUR BEHALF,  OR FOR ANY FAILURE BY POMEROY TO DISCLOSE  EVENTS
THAT MAY AFFECT THE SIGNIFICANCE OR ACCURACY OF SUCH  INFORMATION.  SEE SCHEDULE
II FOR INFORMATION  REGARDING  PERSONS WHO  BENEFICIALLY OWN MORE THAN 5% OF THE
SHARES  AND THE  OWNERSHIP  OF THE SHARES BY THE  DIRECTORS  AND  MANAGEMENT  OF
POMEROY.

      The information  concerning  Pomeroy contained in this Proxy Statement and
the Schedules  attached  hereto has been taken from, or is based upon,  publicly
available information.

                                    FLAGG STREET PARTNERS QUALIFIED LP

                                    June 11, 2007


                                      -24-


                                   SCHEDULE I

                      TRANSACTIONS IN SECURITIES OF POMEROY
                            DURING THE PAST TWO YEARS

        Class              Quantity           Price Per           Date of
     of Security      Purchased / (Sold)      Share ($)       Purchase / Sale
    ------------      ------------------      ---------       ---------------

                       Flagg Street Partners Qualified LP
--------------------------------------------------------------------------------
    Common Stock            2,424              9.4909             03/01/06
    Common Stock              500              9.6380             03/03/06
    Common Stock              500              9.6540             03/06/06
    Common Stock              925              9.6879             03/10/06
    Common Stock            5,302              9.7256             03/14/06
    Common Stock            1,906              9.7295             03/15/06
    Common Stock            1,510              9.7208             03/16/06
    Common Stock            3,039              9.7237             03/17/06
    Common Stock            1,697              9.6841             03/20/06
    Common Stock            2,761             10.0972             03/22/06
    Common Stock            7,893              8.8793             03/23/06
    Common Stock            2,209              8.9950             03/24/06
    Common Stock            8,909              8.7140             03/27/06
    Common Stock            5,103              8.5781             03/28/06
    Common Stock            3,584              8.5912             03/29/06
    Common Stock            5,296              8.5396             03/31/06
    Common Stock            4,500              8.9574             04/04/06
    Common Stock            4,371              8.7422             04/12/06
    Common Stock            9,932              8.8256             04/13/06
    Common Stock            4,045              8.4690             04/17/06
    Common Stock            4,100              8.6311             04/19/06
    Common Stock            7,035              8.9715             04/27/06
    Common Stock            4,886              7.1602             05/19/06
    Common Stock            1,901              7.1073             05/22/06
    Common Stock            5,606              7.1240             05/23/06
    Common Stock            2,645              7.1248             05/24/06


                                      I-1


        Class              Quantity           Price Per           Date of
     of Security      Purchased / (Sold)      Share ($)       Purchase / Sale
    ------------      ------------------      ---------       ---------------
    Common Stock            5,600              7.2527             05/26/06
    Common Stock            4,500              7.2945             06/09/06
    Common Stock            4,500              7.3146             06/15/06
    Common Stock           13,130              7.1309             06/21/06
    Common Stock           (6,236)             7.0262             08/11/06
    Common Stock             (711)             7.0481             08/14/06
    Common Stock            1,925              7.7155             08/17/06
    Common Stock            3,030              7.7435             08/21/06
    Common Stock            3,942              7.7812             08/22/06
    Common Stock            1,628              7.8145             08/23/06
    Common Stock            1,843              7.8734             08/24/06
    Common Stock            1,890              7.8838             08/25/06
    Common Stock              660              7.8220             08/28/06
    Common Stock              570              7.6960             08/29/06
    Common Stock            1,419              7.8412             08/30/06
    Common Stock            1,031              7.7290             08/31/06
    Common Stock              554              7.6973             09/05/06
    Common Stock           49,018              7.7800             09/06/06
    Common Stock            6,721              7.7197             09/06/06
    Common Stock            1,270              7.7672             09/07/06
    Common Stock              948              7.7332             09/08/06
    Common Stock            1,809              7.8325             09/11/06
    Common Stock            1,585              7.9378             09/12/06
    Common Stock              347              8.0086             09/13/06
    Common Stock              292              8.0060             09/22/06
    Common Stock              567              7.9255             09/26/06
    Common Stock              560              7.9900             09/27/06
    Common Stock           45,379              7.9800             10/05/06
    Common Stock            2,022              7.4468             11/14/06
    Common Stock            9,829              7.4084             11/15/06
    Common Stock              981              7.2246             12/08/06


                                      I-2


        Class              Quantity           Price Per           Date of
     of Security      Purchased / (Sold)      Share ($)       Purchase / Sale
    ------------      ------------------      ---------       ---------------
    Common Stock            1,639              7.3122             12/11/06
    Common Stock            4,358              7.3237             12/12/06
    Common Stock            1,538              7.3221             12/13/06
    Common Stock              139              7.3256             12/14/06
    Common Stock           18,896              7.6300             01/26/07
    Common Stock            5,584              7.7300             01/29/07
    Common Stock              223              7.5400             01/31/07
    Common Stock              133              7.7000             02/01/07
    Common Stock           16,929              7.7800             02/05/07
    Common Stock            3,823              7.7800             02/06/07

                            Flagg Street Partners LP
--------------------------------------------------------------------------------
    Common Stock            2,437              9.5627             03/02/06
    Common Stock            3,458              9.7268             03/14/06
    Common Stock            1,449              9.7281             03/17/06
    Common Stock            1,400              9.7067             03/21/06
    Common Stock            6,145              8.8798             03/23/06
    Common Stock            6,804              8.7145             03/27/06
    Common Stock            3,121              8.5795             03/28/06
    Common Stock            3,197              8.6214             03/30/06
    Common Stock            2,988              8.7272             04/03/06
    Common Stock            1,000              8.8410             04/06/06
    Common Stock            1,800              8.9200             04/11/06
    Common Stock            7,374              8.8260             04/13/06
    Common Stock            4,035              8.5530             04/18/06
    Common Stock            1,700              8.9606             04/25/06
    Common Stock            3,413              8.9733             04/27/06
    Common Stock          (22,597)*            8.8147             04/28/06
    Common Stock            2,218              7.1602             05/19/06


------------------------
*  Represents  Shares  transferred from Flagg Street Partners LP to Flagg Street
   Offshore, LP.


                                      I-3


        Class              Quantity           Price Per           Date of
     of Security      Purchased / (Sold)      Share ($)       Purchase / Sale
    ------------      ------------------      ---------       ---------------
    Common Stock              616              7.1073             05/22/06
    Common Stock            2,683              7.1248             05/24/06
    Common Stock              800              7.2241             06/01/06
    Common Stock            1,600              7.5086             06/05/06
    Common Stock            2,000              7.3445             06/06/06
    Common Stock            2,700              7.2066             06/19/06
    Common Stock            2,962              7.1309             06/21/06
    Common Stock           (1,665)             7.0262             08/11/06
    Common Stock              250              7.7155             08/17/06
    Common Stock            1,017              7.7435             08/21/06
    Common Stock            1,328              7.7812             08/22/06
    Common Stock              512              7.8145             08/23/06
    Common Stock              557              7.8734             08/24/06
    Common Stock              713              7.8838             08/25/06
    Common Stock              225              7.8220             08/28/06
    Common Stock              181              7.6960             08/29/06
    Common Stock              461              7.8412             08/30/06
    Common Stock              332              7.7290             08/31/06
    Common Stock            1,900              7.7837             09/01/06
    Common Stock           16,969              7.7800             09/06/06
    Common Stock            2,327              7.7197             09/06/06
    Common Stock              504              7.7672             09/07/06
    Common Stock              359              7.7332             09/08/06
    Common Stock              607              7.8325             09/11/06
    Common Stock              503              7.9378             09/12/06
    Common Stock               56              8.0086             09/13/06
    Common Stock              103              7.9255             09/26/06
    Common Stock              173              7.9900             09/27/06
    Common Stock           15,614              7.9800             10/05/06
    Common Stock            2,300              8.3435             11/02/06
    Common Stock              579              7.4468             11/14/06
    Common Stock            3,426              7.4084             11/15/06


                                      I-4


        Class              Quantity           Price Per           Date of
     of Security      Purchased / (Sold)      Share ($)       Purchase / Sale
    ------------      ------------------      ---------       ---------------
    Common Stock              828              7.2246             12/08/06
    Common Stock              558              7.3122             12/11/06
    Common Stock            1,532              7.3237             12/12/06
    Common Stock              607              7.3221             12/13/06
    Common Stock               59              7.3256             12/14/06
    Common Stock            8,172              7.6300             01/26/07
    Common Stock            2,002              7.7300             01/29/07
    Common Stock               77              7.5400             01/31/07
    Common Stock            7,208              7.7800             02/05/07

                            Flagg Street Offshore, LP
--------------------------------------------------------------------------------
    Common Stock            5,576              9.4882             03/01/06
    Common Stock            3,565              9.5612             03/02/06
    Common Stock            1,800              9.7339             03/13/06
    Common Stock           11,240              9.7244             03/14/06
    Common Stock            4,394              9.7259             03/15/06
    Common Stock            1,590              9.7204             03/16/06
    Common Stock            5,512              9.7220             03/17/06
    Common Stock            3,903              9.6801             03/20/06
    Common Stock            6,339             10.0948             03/22/06
    Common Stock           18,162              8.8785             03/23/06
    Common Stock            5,091              8.9920             03/24/06
    Common Stock           20,487              8.7133             03/27/06
    Common Stock           11,776              8.5767             03/28/06
    Common Stock            8,216              8.5894             03/29/06
    Common Stock           10,969              8.5384             03/31/06
    Common Stock            4,524              8.7259             04/03/06
    Common Stock            3,552              8.7591             04/05/06
    Common Stock            2,100              8.7671             04/07/06
    Common Stock            6,711              8.8926             04/10/06
    Common Stock            3,390              8.7430             04/12/06
    Common Stock           22,694              8.8249             04/13/06


                                      I-5


        Class              Quantity           Price Per           Date of
     of Security      Purchased / (Sold)      Share ($)       Purchase / Sale
    ------------      ------------------      ---------       ---------------
    Common Stock            9,225              8.4673             04/17/06
    Common Stock            5,965              8.5520             04/18/06
    Common Stock            1,100              8.7633             04/20/06
    Common Stock            3,700              8.6370             04/24/06
    Common Stock            3,674              8.9895             04/26/06
    Common Stock           11,552              8.9708             04/27/06
    Common Stock           22,597*             8.8250             04/28/06
    Common Stock           13,796              7.1602             05/19/06
    Common Stock            8,983              7.1073             05/22/06
    Common Stock           14,394              7.1240             05/23/06
    Common Stock            6,672              7.1248             05/24/06
    Common Stock            7,100              7.1741             05/25/06
    Common Stock           15,900              7.2527             05/26/06
    Common Stock            8,400              7.2306             05/30/06
    Common Stock            5,200              7.2548             05/31/06
    Common Stock            1,200              7.3515             06/07/06
    Common Stock            2,600              7.4595             06/08/06
    Common Stock            6,300              7.2103             06/12/06
    Common Stock            3,200              7.2685             06/13/06
    Common Stock            7,000              7.1798             06/14/06
    Common Stock            4,100              7.2522             06/16/06
    Common Stock            4,200              7.1477             06/20/06
    Common Stock            6,900              7.1247             06/21/06
    Common Stock           23,908              7.1309             06/21/06
    Common Stock             (500)             7.0878             08/09/06
    Common Stock           (2,664)             7.1104             08/10/06
    Common Stock          (10,000)             7.0386             08/11/06
    Common Stock           (7,334)             7.0262             08/11/06
    Common Stock           (1,689)             7.0481             08/14/06
    Common Stock            5,325              7.7155             08/17/06
    Common Stock            5,900              7.8349             08/18/06

------------------------
*  Represents  Shares  transferred from Flagg Street Partners LP to Flagg Street
   Offshore, LP.


                                      I-6


        Class              Quantity           Price Per           Date of
     of Security      Purchased / (Sold)      Share ($)       Purchase / Sale
    ------------      ------------------      ---------       ---------------
    Common Stock            2,453              7.7435             08/21/06
    Common Stock           10,730              7.7812             08/22/06
    Common Stock            4,460              7.8145             08/23/06
    Common Stock            5,100              7.8734             08/24/06
    Common Stock            5,397              7.8838             08/25/06
    Common Stock            1,815              7.8220             08/28/06
    Common Stock            1,549              7.6960             08/29/06
    Common Stock            4,020              7.8412             08/30/06
    Common Stock            2,840              7.7290             08/31/06
    Common Stock              546              7.6973             09/05/06
    Common Stock          134,013              7.7800             09/06/06
    Common Stock           18,352              7.7197             09/06/06
    Common Stock            3,226              7.7672             09/07/06
    Common Stock            2,722              7.7332             09/08/06
    Common Stock            5,055              7.8325             09/11/06
    Common Stock            4,412              7.9378             09/12/06
    Common Stock              997              8.0086             09/13/06
    Common Stock              708              8.0060             09/22/06
    Common Stock            1,330              7.9255             09/26/06
    Common Stock            1,568              7.9900             09/27/06
    Common Stock              600              8.0017             09/29/06
    Common Stock              100              8.0100             10/03/06
    Common Stock          126,459              7.9800             10/05/06
    Common Stock            6,121              7.4468             11/14/06
    Common Stock           26,745              7.4084             11/15/06
    Common Stock            3,156              7.2246             12/08/06
    Common Stock            4,618              7.3122             12/11/06
    Common Stock           12,023              7.3237             12/12/06
    Common Stock            4,455              7.3221             12/13/06
    Common Stock               27              7.3256             12/14/06
    Common Stock            5,886              7.6300             01/26/07
    Common Stock           14,514              7.7300             01/29/07


                                      I-7


        Class              Quantity           Price Per           Date of
     of Security      Purchased / (Sold)      Share ($)       Purchase / Sale
    ------------      ------------------      ---------       ---------------
    Common Stock              619              7.5400             01/31/07
    Common Stock              367              7.7000             02/01/07
    Common Stock           43,863              7.7800             02/05/07
    Common Stock           10,063              7.7800             02/06/07


                                      I-8

                                   SCHEDULE II

     THE FOLLOWING TABLE IS REPRINTED FROM POMEROY'S FORM 10-K/A FILED WITH
              THE SECURITIES AND EXCHANGE COMMISSION ON MAY 9, 2007

               STOCK OWNERSHIP OF PRINCIPAL OWNERS AND MANAGEMENT

      The  following  table  sets  forth,  as of April 5, 2007,  the  beneficial
ownership  of shares of the  Company's  Common  stock,  $.01 par value  ("Common
Stock"),  by each  Director  and  nominee  for  Director  of the  Company,  each
executive officer named in the Summary  Compensation Table, each person known to
the Company to be the  beneficial  owner of more than five  percent  (5%) of its
outstanding  shares of Common Stock, and by the Directors and executive officers
of the Company as a group.


                                        Amount & Nature of
Name and Address (1)                 Beneficial Ownership (2)     % of Class
---------------------------------    ------------------------     ----------

David B. Pomeroy, II (3)                   2,208,315                 17.24%

Stephen E. Pomeroy (4)                       677,315                  5.04%

Kevin G. Gregory (5)                          72,500                     *

Keith Blachowiak (6)                          64,688                     *

P. Hope Griffith (7)                          40,938                     *

John E. McKenzie (8)                          91,820                     *

James H. Smith, III (9)                       21,911                     *

William H. Lomicka (10)                       26,667                     *

Vincent D. Rinaldi (11)                       18,300                     *

Debra E. Tibey (12)                           25,800                     *

Kenneth R. Waters (13)                        17,050                     *

David G. Boucher (14)                         13,300                     *

Ronald E. Krieg (15)                          13,300                     *

Directors and all Executive                3,291,904                 23.38%
Officers as a Group(16)

FMR Corp. (17)                             1,290,645                 10.45%
82 Devonshire Street
Boston, MA 02109

Wells Fargo and Company (18)               1,674,673                 13.55%
420 Montgomery Street
San Francisco, CA 94104



                                      II-1


Wells Capital Management Inc. (19)         1,603,673                 12.98%
525 Market Street, 10th Floor
San Francisco, CA 94104

Dimensional Fund Advisors, Inc. (20)       1,069,440                  8.66%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401

Byram Capital Management LLC (21)            888,865                  7.19%
41 West Putnam Avenue
Greenwich, CT 06830

Certain funds and individuals (22)         1,249,325                 10.11%
related to Flagg Street Capital LLC
44 Brattle Street
Cambridge, MA 02138

---------------------
*  Less than one percent (1%)

(1)   The address for all  directors  and  executive  officers is the  corporate
      address.
(2)   The "Beneficial Owner" of a security includes any person who shares voting
      power or  investment  power with respect to such security or has the right
      to acquire  beneficial  ownership  of such  security  within 60 days based
      solely on information provided to the Company.
(3)   Includes  22,636  shares  owned by his  spouse  as to which  Mr.  David B.
      Pomeroy disclaims  beneficial  ownership.  Also includes 452,000 shares of
      common stock issuable upon exercise of stock options.
(4)   Includes  545,750  shares of Common Stock  issuable upon exercise of stock
      options. Also includes 99,000 restricted shares.
(5)   Includes  50,000  shares of Common Stock  issuable  upon exercise of stock
      options. Also includes 22,500 restricted shares.
(6)   Includes  50,000  shares of Common Stock  issuable  upon exercise of stock
      options. Also includes 14,688 shares of restricted stock.
(7)   Includes  20,000  shares of Common Stock  issuable  upon exercise of stock
      options. Also includes 17,438 restricted shares
(8)   Includes  69,833  shares of Common Stock  issuable  upon exercise of stock
      options. Also includes 20,875 restricted shares
(9)   Includes  15,000  shares of Common Stock  issuable  upon exercise of stock
      options. Also includes 3,300 restricted shares.
(10)  Includes  26,667  shares of Common Stock  issuable  upon exercise of stock
      options.
(11)  Includes  15,000  shares of Common Stock  issuable  upon exercise of stock
      options. Also includes 3,300 restricted shares.
(12)  Includes  22,500  shares of Common Stock  issuable  upon exercise of stock
      options. Also includes 3,300 restricted shares.
(13)  Includes  10,000  shares of Common Stock  issuable  upon exercise of stock
      options. Also includes 3,300 restricted shares.
(14)  Includes  10,000  shares of Common Stock  issuable  upon exercise of stock
      options. Also includes 3,300 restricted shares.


                                      II-2


(15)  Includes  10,000  shares of Common Stock  issuable  upon exercise of stock
      options. Also includes 3,300 restricted shares.
(16)  Includes  1,352,584 shares of Common Stock issuable upon exercise of stock
      options.  Includes 194,301  restricted  shares.  Includes 22,636 shares of
      Common  Stock owned by the spouse of Mr.  David B.  Pomeroy as to which he
      disclaims beneficial ownership.
(17)  Beneficial  ownership  information is taken from latest Schedule 13G filed
      February 14, 2007, for the reporting period ending December 31, 2006.
(18)  Beneficial  ownership  information is taken from latest Schedule 13G filed
      February 7, 2007, for the reporting period ending December 31, 2006.
(19)  Beneficial  ownership  information is taken from latest Schedule 13G filed
      February 7, 2007, for the reporting period ending December 31, 2006.
(20)  Beneficial  ownership  information is taken from latest Schedule 13G filed
      February 2, 2007, for the reporting period ending December 31, 2006.
(21)  Beneficial  ownership  information is taken from latest Schedule 13G filed
      February 12, 2007, for the reporting period ending December 31, 2006.
(22)  Beneficial  ownership  information is taken from latest Schedule 13D filed
      January 3, 2007, as amended  February 9, 2007 and April 3, 2007,  filed by
      Jonathan Starr, Flagg Street Capital, LLC, Flagg Street Partners LP, Flagg
      Street Partners  Qualified LP, Flagg Street Offshore,  LP, Michael Ruffolo
      and Richard Press.  Certain of such persons disclaim beneficial  ownership
      of all shares  reported as  beneficially  owned in such Schedule 13D as so
      amended.


                                      II-3


                                    IMPORTANT

      Tell your Board what you think! Your vote is important. No matter how many
Shares you own,  please  give Flagg  Street  your proxy FOR the  election of its
Nominees by taking three steps:

   o  SIGNING the enclosed GOLD proxy card,

   o  DATING the enclosed GOLD proxy card, and

   o  MAILING the enclosed  GOLD proxy card TODAY in the  envelope  provided (no
      postage is required if mailed in the United States).

      IF ANY OF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK, BANK
NOMINEE OR OTHER INSTITUTION, ONLY IT CAN VOTE SUCH SHARES AND ONLY UPON RECEIPT
OF YOUR SPECIFIC INSTRUCTIONS.  Depending upon your broker or custodian, you may
be able to vote either by toll-free  telephone or by the Internet.  Please refer
to the enclosed voting form for instructions on how to vote electronically.  You
may also vote by signing, dating and returning the enclosed GOLD voting form.

      If you have any questions or require any additional information concerning
this Proxy Statement, please contact Morrow & Co., Inc. at the address set forth
below.

--------------------------------------------------------------------------------

                               MORROW & CO., INC.

                                 470 West Avenue
                               Stamford, CT 06902
                                 (203) 658-9400

             BANKS AND BROKERAGE FIRMS, PLEASE CALL: (203) 658-9400
                   SHAREHOLDERS CALL TOLL FREE: (800) 662-5200
                      E-MAIL: flaggstreet.info@morrowco.com

--------------------------------------------------------------------------------




GOLD PROXY CARD

                           POMEROY IT SOLUTIONS, INC.

                       2007 ANNUAL MEETING OF STOCKHOLDERS

     THIS PROXY IS SOLICITED ON BEHALF OF FLAGG STREET PARTNERS QUALIFIED LP

              THE BOARD OF DIRECTORS OF POMEROY IT SOLUTIONS, INC.
                          IS NOT SOLICITING THIS PROXY

                                    P R O X Y

The  undersigned  appoints  Jonathan  Starr and Andrew  Moss,  and each of them,
attorneys  and  agents  with full  power of  substitution  to vote all shares of
Common Stock of Pomeroy IT Solutions, Inc. (the "Company") which the undersigned
would be  entitled  to vote if  personally  present  at the  Annual  Meeting  of
Stockholders of the Company scheduled to be held on Thursday,  July 12, 2007, at
9:00 A.M.  (E.D.T.),  at the Cincinnati  Airport Marriott,  2395 Progress Drive,
Hebron, Kentucky, and including at any adjournments or postponements thereof and
at any meeting called in lieu thereof (the "Annual Meeting").

The undersigned  hereby revokes any other proxy or proxies  heretofore  given to
vote or act with  respect to the shares of Common  Stock of the Company  held by
the  undersigned,  and hereby  ratifies and confirms all action the herein named
attorneys and proxies,  their  substitutes,  or any of them may lawfully take by
virtue hereof. If properly executed, this Proxy will be voted as directed on the
reverse and in the discretion of the herein named attorneys and proxies or their
substitutes  with respect to any other  matters as may properly  come before the
Annual  Meeting that are unknown to Flagg Street  Partners  Qualified LP ("Flagg
Street") a reasonable time before this solicitation.

IF NO DIRECTION IS INDICATED  WITH RESPECT TO ANY PROPOSAL ON THE REVERSE,  THIS
PROXY WILL BE VOTED "FOR" SUCH PROPOSAL.

This Proxy will be valid until the sooner of one year from the date indicated on
the reverse side and the completion of the Annual Meeting.

         IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!

                   CONTINUED AND TO BE SIGNED ON REVERSE SIDE




GOLD PROXY CARD

FLAGG STREET RECOMMENDS A VOTE "FOR" EACH OF ITS NOMINEES LISTED IN PROPOSAL NO.
1 AND "FOR" PROPOSAL NO. 2.

IN THE EVENT  THAT ANY OF FLAGG  STREET'S  NOMINEES  LISTED  BELOW ARE UNABLE TO
SERVE OR FOR GOOD CAUSE WILL NOT SERVE AS NOMINEES,  THE SHARES  REPRESENTED  BY
THIS  PROXY  CARD WILL BE VOTED FOR A  SUBSTITUTE  NOMINEE  DESIGNATED  BY FLAGG
STREET.

[X] PLEASE MARK VOTE AS IN THIS EXAMPLE

1.    APPROVAL OF FLAGG STREET'S PROPOSAL TO ELECT DIRECTORS:

                                                    WITHHOLD
                                                  AUTHORITY TO      FOR ALL
                                     FOR ALL      VOTE FOR ALL      NOMINEES
                                     NOMINEES       NOMINEES         EXCEPT

      Nominees: Jonathan Starr         [ ]             [ ]            [ ]
                Michael A. Ruffolo
                Richard S. Press

FLAGG STREET INTENDS TO USE THIS PROXY TO VOTE (I) "FOR" MESSRS.  STARR, RUFFOLO
AND PRESS AND (II) "FOR" THE  CANDIDATES  WHO HAVE BEEN NOMINATED BY THE COMPANY
TO SERVE AS  DIRECTORS  OTHER THAN DAVID  POMEROY,  STEPHEN  POMEROY AND VINCENT
RINALDI FOR WHOM FLAGG STREET IS NOT SEEKING  AUTHORITY TO VOTE FOR AND WILL NOT
EXERCISE ANY SUCH AUTHORITY.  THE NAMES,  BACKGROUNDS AND  QUALIFICATIONS OF THE
CANDIDATES WHO HAVE BEEN NOMINATED BY THE COMPANY,  AND OTHER  INFORMATION ABOUT
THEM, CAN BE FOUND IN THE COMPANY'S PROXY STATEMENT.

THERE IS NO ASSURANCE  THAT ANY OF THE CANDIDATES WHO HAVE BEEN NOMINATED BY THE
COMPANY WILL SERVE AS DIRECTORS IF FLAGG STREET'S NOMINEES ARE ELECTED.

NOTE:  IF YOU DO NOT WISH FOR YOUR SHARES TO BE VOTED "FOR" A  PARTICULAR  FLAGG
STREET NOMINEE,  MARK THE "FOR ALL NOMINEES EXCEPT" BOX AND WRITE THE NAME(S) OF
THE NOMINEE(S)  YOU DO NOT SUPPORT ON THE LINE BELOW.  YOUR SHARES WILL BE VOTED
FOR THE REMAINING FLAGG STREET  NOMINEE(S).  YOU MAY ALSO WITHHOLD  AUTHORITY TO
VOTE FOR ONE OR MORE  ADDITIONAL  CANDIDATES  WHO  HAVE  BEEN  NOMINATED  BY THE
COMPANY BY WRITING THE NAME OF THE NOMINEE(S) BELOW.

         ---------------------------------------------------------------

2.    APPROVAL OF THE COMPANY'S  PROPOSAL TO RATIFY  APPOINTMENT OF BDO SEIDMAN,
      LLP AS INDEPENDENT AUDITORS FOR THE COMPANY'S 2007 FISCAL YEAR:

            FOR                 AGAINST                 ABSTAIN
            [ ]                   [ ]                     [ ]


DATED:
       --------------------------

---------------------------------
(Signature)

---------------------------------
(Signature, if held jointly)

---------------------------------
(Title)

WHEN  SHARES ARE HELD  JOINTLY,  JOINT  OWNERS  SHOULD  EACH SIGN.  EXECUTORS,
ADMINISTRATORS,   TRUSTEES,  ETC.,  SHOULD  INDICATE  THE  CAPACITY  IN  WHICH
SIGNING.  PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY.