Edgar Filing: RESOURCES CONNECTION INC

As filed with the Securities and Exchange Commission on August 8, 2001

Registration No. 333-65272

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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AMENDMENT NO. 1

FORM S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

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RESOURCES CONNECTION, INC.
(Exact name of registrant as specified in its charter)

Delaware 8742 33-0832424
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation) Classification Code Number) Identification Number)

695 Town Center Drive, Suite 600
Costa Mesa, California 92626
(714) 430-6400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

Donald B. Murray
Chief Executive Officer
Resources Connection, Inc.
695 Town Center Drive, Suite 600
Costa Mesa, California 92626
(714) 430-6400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

Copies To:

David A. Krinsky Patrick T. Seaver
Terrence R. Allen Shayne Kennedy
Christopher M. Lal Latham & Watkins
O'Melveny & Myers LLP 650 Town Center Drive, Suite 2000
610 Newport Center Drive, Suite 1700 Costa Mesa, California 92626-1918
Newport Beach, California 92660 (714) 540-1235
(949) 760-9600

Approximate date of commencement of proposed sale to the public:

As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and is not soliciting an offer to buy the +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION, DATED August 8, 2001

3,532,591 Shares

[LOGO OF RESOURCES CONNECTION]

Common Stock

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We are selling 200,000 shares of our common stock and the selling
stockholders are selling 3,332,591 shares of common stock. We will not receive
any of the proceeds from the shares of common stock sold by the selling
stockholders.

Our common stock is listed on The Nasdaq Stock Market's National Market under
the symbol "RECN". The last reported sale price on August 7, 2001, was $19.95
per share.

The underwriters have an option to purchase a maximum of 529,889 additional
shares from us and the selling stockholders to cover over-allotments of shares.

Investing in our common stock involves risks. See "Risk Factors" on page 6.

Underwriting Proceeds to Proceeds to
Price to Discounts and Resources Selling
Public Commissions Connection Stockholders
------------- ------------- ------------- -------------

Per Share.............. $ $ $ $
Total.................. $ $ $ $

Delivery of the shares of common stock will be made on or about 2001.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

Credit Suisse First Boston Deutsche Banc Alex. Brown

Bear, Stearns & Co. Inc.
Merrill Lynch & Co.
Robert W. Baird & Co.

The date of this prospectus is , 2001.

[inside front cover]

[small logo]

THE PROFESSIONAL SERVICES FIRM OF THE FUTURE

[map depicting office locations and professional services lines delivered at
each office location]

[colored square] Finance and Accounting
[colored diamond] Finance and Accounting & Information Technology
[colored circle] Finance and Accounting & Human Resources Management
[colored triangle] Finance and Accounting, Information Technology & Human
Resources Management

United States International

Atlanta Costa Mesa Los Angeles Princeton Hong Kong
Austin Dallas Milwaukee San Antonio London - Summer 2001
Baltimore Denver Minneapolis San Diego Taipei
Boise Detroit New York San Francisco Toronto
Boston Ft. Worth Orlando Seattle
Charlotte Hartford Parsippany Silicon Valley
Chicago (2) Honolulu Philadelphia Stamford
Cincinnati Houston (2) Phoenix St. Louis
Cleveland Indianapolis Pittsburgh Tampa
Las Vegas Portland Washington, D.C.

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TABLE OF CONTENTS

Page Page
---- ----

Prospectus Summary...................... 1 Management.......................... 37
Risk Factors............................ 6 Related-Party Transactions.......... 48
Forward-Looking Statements.............. 13 Principal And Selling Stockholders.. 51
Use Of Proceeds......................... 14 Description Of Capital Stock........ 53
Price Range Of Common Stock And Dividend Shares Eligible For Future Sale..... 55
Policy................................. 14 Underwriting........................ 57
Capitalization.......................... 15 Notice To Canadian Residents........ 60
Selected Historical Consolidated Legal Matters....................... 61
Financial Data......................... 16 Experts............................. 61
Management's Discussion And Analysis Of Additional Information.............. 61
Financial Condition And Results Of Index To Consolidated Financial
Operations............................. 18 Statements......................... F-1
Business................................ 27

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You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.
This summary does not contain all of the information you should consider before
buying shares in this offering. You should read the entire prospectus
carefully. References in this prospectus to "Resources Connection," "company,"
"we," "us" and "our" refer to the business of Resources Connection LLC for all
periods prior to the sale of Resources Connection LLC by Deloitte & Touche LLP,
and to Resources Connection, Inc. and its subsidiaries for all periods after
the sale. References to "Deloitte & Touche" refer to Deloitte & Touche LLP.
References in this prospectus to "fiscal," "year" or "fiscal year" refer to our
fiscal years that consist of the 52- or 53-week period ending on the Saturday
in May closest to May 31st.

Overview

Resources Connection, Inc. is a professional services firm that provides
experienced accounting and finance, human resources management and information
technology professionals to clients on a project-by-project basis. In
accounting and finance, we assist our clients with discrete projects requiring
specialized professional expertise, such as mergers and acquisitions due
diligence, financial analyses (e.g., product costing and margin analyses) and
corporate reorganization and tax-related projects. In addition, we provide
human resources management services, such as compensation program design and
implementation, and information technology services, such as transitions of
management information systems. We also assist our clients with periodic needs
such as budgeting and forecasting, audit preparation and public reporting.

Since our inception in 1996, we have opened 41 offices in the United States
and four offices internationally. We have a growing and diverse client base of
over 1,800 clients ranging in size from large corporations, to mid-sized
companies to small entrepreneurial entities, in a broad range of industries. We
have grown revenues internally from $9.3 million in fiscal 1997 to $189.8
million in fiscal 2001, a four-year compounded annual growth rate, or CAGR, of
112%. Our income from operations over the same period has increased from
$869,000 to $25.8 million, a four-year CAGR of 134%. We have been profitable
each year since inception. We operated as an independent subsidiary of Deloitte
& Touche from 1996 to April 1999, when we completed a management-led buyout.
Prior to the management-led buyout, we were unable to provide certain
accounting services to audit clients of Deloitte & Touche due to regulatory
constraints applicable to us as part of a Big Five accounting firm.

Our management team, virtually all of whom have Big Five experience, has
created a culture that combines the commitment to quality and client-service
focus of a Big Five accounting firm with the entrepreneurial energy of an
innovative, high-growth company. Because of this culture, we believe we have
been able to attract and retain highly qualified, experienced associates,
which, in turn, is a significant component of our success. At the end of fiscal
2001, we employed more than 1,250 associates on assignment, who have
professional experience in a wide range of industries and functional areas. We
offer our associates careers that combine many of the advantages of working for
a traditional professional services firm with the flexibility of project-based
work. We provide our associates with challenging work assignments, competitive
compensation and benefits, and continuing education and training opportunities,
while offering flexible work schedules and more control over choosing client
engagements.

We believe that we provide our clients with high-quality service and a value
proposition because we are able to combine all of the following:

. a relationship-oriented approach to assess our clients' project needs;

. highly qualified professionals with the requisite skills and experience;

. competitive rates on an hourly, instead of a per project, basis; and

. significant client control over their projects.

Market Opportunity

According to a study by Staffing Industry Analysts, Inc., the market for
outsourcing professionals, including information technology, accounting and
finance, technical/engineering, medical and legal professionals, is large and
growing, with revenues estimated to grow from $40.1 billion in 1999 to $58.6
billion in 2002, representing a CAGR of 13.5%. Accounting and finance
professionals, according to the same study, represent one of the fastest
growing segments of this market, with revenues estimated to grow from $7.2
billion in 1999 to $13.6 billion in 2002, representing a CAGR of 23.6%.

We believe this growth is driven by the recognition that companies can
strategically access specialized skills and expertise and increase labor
flexibility by outsourcing their professional services. At the same time, we
believe many professionals are embracing project-based careers because of the
more flexible hours and work arrangements. Resources Connection is positioned
to capitalize on the confluence of these industry trends by providing clients
with high-quality, project-based professional assistance and by offering
professionals rewarding, flexible careers.

Growth Strategy

We believe we have significant opportunity for continued strong internal
growth in our core business. We will also evaluate potential strategic
acquisitions on a case-by-case basis. Our objective is to be the leading
provider of project-based professional services by:

. capturing more of our clients' total outsourced professional services
expenditures;

. adding additional clients in a broad range of industries;

. expanding our presence both in the United States and internationally;
and

. providing additional professional services lines to meet our clients'
project-based needs.

Recent Developments

We believe the analysts' revenue projections for the first quarter of fiscal
2002 range from $48.1 million to $50.0 million. We estimate that revenue for
the first nine weeks of the first quarter of fiscal 2002 (which quarter will
contain 13 weeks) will be approximately $34.2 million. This compares to revenue
in the first nine weeks of fiscal 2001 of $26.4 million. Historically, our
August revenue has increased from July levels, but if a similar trend does not
occur in the current August period due to softness in the general economy or
otherwise, we may slightly miss the low end of analysts' revenue and/or
earnings per share projections for the current quarter. We continue to have
confidence in the future of the company. Accordingly, we have made investments
in opening a new office in the United Kingdom and hiring new senior directors
for our Hong Kong and Toronto practices, which are not expected to contribute
to revenue for several months.

Our Company

Resources Connection was founded as a division of Deloitte & Touche in June
1996, and from January 1997 until April 1999, operated as Resources Connection
LLC, a Delaware limited liability company and a wholly owned subsidiary of
Deloitte & Touche. In November 1998, our management formed RC Transaction
Corp., a Delaware corporation, to raise capital for an intended management-led
buyout of Resources Connection LLC. The management-led buyout was consummated
in April 1999, and since that time, RC Transaction Corp., renamed Resources
Connection, Inc. in August 2000, has owned all of the membership units of
Resources Connection LLC. Resources Connection is an independent company that
is no longer affiliated with Deloitte & Touche. Our business is operated
primarily through Resources Connection LLC. Our principal executive offices are
located at 695 Town Center Drive, Suite 600, Costa Mesa, California 92626. Our
telephone number is (714) 430-6400. Our website is
http://www.resourcesconnection.com. We do not intend the information found on
our website to be a part of this prospectus.

The Offering

Common stock offered by:
Resources Connection, Inc. ..................... 200,000 shares
Selling stockholders............................ 3,332,591 shares
Total....................................... 3,532,591 shares

Common stock to be outstanding after the offering.. 20,992,080 shares
Use of proceeds.................................... We intend to use the
proceeds from this
offering for working
capital and general
corporate purposes. We
will not receive any of
the proceeds from the
sale of shares by the
selling stockholders.
See "Use of Proceeds".
Nasdaq National Market symbol...................... RECN

Common stock to be outstanding after this offering is based on 20,792,080
shares of common stock outstanding as of June 30, 2001. It does not include:

. 3,210,445 shares of common stock issuable on the exercise of stock
options outstanding as of June 30, 2001;

. 1,686,950 additional shares of common stock reserved for issuance under
the Resources Connection, Inc. 1999 Long-Term Incentive Plan as of June
30, 2001; and

. 1,156,815 additional shares of common stock reserved for issuance under
the Employee Stock Purchase Plan as of June 30, 2001.

Except as otherwise indicated, all of the information in this prospectus
assumes:

. no exercise of the underwriters' over-allotment option; and

. an estimated offering price of $19.95 per share.

Summary Consolidated Financial Information

The following table summarizes our consolidated financial data. You should
read the summary financial data below in conjunction with our consolidated
financial statements and related notes beginning on page F-1 and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
appearing on page 18. Resources Connection commenced operations on June 1,
1996. The statements of income data for the years ended May 31, 1997 and 1998
and for the period from June 1, 1998 to March 31, 1999 were derived from the
financial statements of our wholly owned subsidiary, Resources Connection LLC.
After forming Resources Connection, Inc. on November 16, 1998, we completed the
acquisition of Resources Connection LLC on April 1, 1999. Resources Connection,
Inc. accounted for the purchase of Resources Connection LLC using the purchase
method of accounting, in accordance with Accounting Principles Board Opinion
No. 16. The historical results presented are not necessarily indicative of
future results. The as adjusted balance sheet data reflect our sale of 200,000
shares of common stock in this offering at an assumed offering price of $19.95
per share, after deducting estimated underwriting discounts, commissions and
offering expenses.

Resources Connection LLC Resources Connection, Inc.
----------------------------------------- --------------------------------------
Period from
Period from November 16,
Year Ended Year Ended June 1, 1998 to 1998 to Year Ended Year Ended
May 31, 1997 May 31, 1998 March 31, 1999 May 31, 1999 May 31, 2000 May 31, 2001
------------ ------------ --------------- ------------ ------------ ------------
(unaudited)
(amounts in thousands, except per share data)

Consolidated Statements
of Income Data:
Revenue................. $9,331 $29,508 $55,438 $15,384 $126,332 $189,752
Direct cost of
services............... 5,367 16,671 31,253 8,618 73,541 110,811
------ ------- ------- ------- -------- --------
Gross profit............ 3,964 12,837 24,185 6,766 52,791 78,941
Selling, general and
administrative
expenses............... 3,086 9,035 17,071 4,274 34,648 49,964
Amortization of
intangible assets...... -- -- -- 371 2,231 2,273
Depreciation expense.... 9 79 118 30 285 866
------ ------- ------- ------- -------- --------
Income from operations.. 869 3,723 6,996 2,091 15,627 25,838
Interest expense, net... -- -- -- 734 4,717 2,043
------ ------- ------- ------- -------- --------
Income before provision
for income taxes and
extraordinary charge... 869 3,723 6,996 1,357 10,910 23,795
Provision for income
taxes (1).............. 348 1,489 2,798 565 4,364 9,518
------ ------- ------- ------- -------- --------
Income before
extraordinary charge .. 521 2,234 4,198 792 6,546 14,277
Extraordinary charge,
net of tax effect of
$381................... -- -- -- -- -- 572
------ ------- ------- ------- -------- --------
Net income(1)........... $ 521 $ 2,234 $ 4,198 $ 792 $ 6,546 $ 13,705
====== ======= ======= ======= ======== ========
Net income per common
share:
Basic before
extraordinary charge.. $ 0.09 $ 0.42 $ 0.80
Extraordinary charge... -- -- 0.03
------- -------- --------
Basic.................. $ 0.09 $ 0.42 $ 0.77
======= ======== ========
Diluted before
extraordinary charge.. $ 0.09 $ 0.42 $ 0.74
Extraordinary charge... -- -- 0.03
------- -------- --------
Diluted................ $ 0.09 $ 0.42 $ 0.71
======= ======== ========
Number of shares used in
computing net income
per share:
Basic.................. 8,691 15,630 17,864
======= ======== ========
Diluted................ 8,691 15,714 19,421
======= ======== ========

Resources Connection LLC Resources Connection, Inc.
---------------------------------------- --------------------------------------
Period from Period from
June 1, 1998 November 16,
Year Ended Year Ended to 1998 to Year Ended Year Ended
May 31, 1997 May 31, 1998 March 31, 1999 May 31, 1999 May 31, 2000 May 31, 2001
------------ ------------ -------------- ------------ ------------ ------------
(dollar amounts in thousands, except per share data)

Other Data:
Number of offices open
at end of period....... 9 18 27 28 35 44
Total number of
associates on
assignment at end of
period................. 127 326 675 697 1,056 1,283

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(1) Because Resources Connection LLC is a limited liability company, income
taxes on any income realized by Resources Connection LLC are the obligation
of its members and, accordingly, Resources Connection LLC records no
provision for income taxes. The pro forma net income for Resources
Connection LLC for periods through March 31, 1999 have been computed as if
Resources Connection LLC had been fully subject to federal and state income
taxes as a C corporation.

May 31, 2001
-------------------
Actual As Adjusted
------- -----------

Consolidated Balance Sheet Data:
Cash and cash equivalents................................... $34,503 $ 37,684
Working capital............................................. 42,965 46,146
Total assets................................................ 105,345 108,526
Stockholders' equity........................................ 86,032 89,213

RISK FACTORS

You should carefully consider the risks described below before making a
decision to buy our common stock. If any of the following risks actually
occurs, our business could be harmed. In that case, the trading price of our
common stock could decline, and you may lose all or part of your investment.
When determining whether to buy our common stock you should also refer to the
other information in this prospectus, including our financial statements and
the related notes.

Risks Related to Our Business

We must provide our clients with highly qualified and experienced associates,
and the loss of a significant number of our associates, or an inability to
attract and retain new associates, could adversely affect our business and
operating results.

Our business involves the delivery of professional services, and our success
depends on our ability to provide our clients with highly qualified and
experienced associates who possess the skills and experience necessary to
satisfy their needs. Such professionals are in great demand, particularly in
certain geographic areas, and are likely to remain a limited resource for the
foreseeable future. Our ability to attract and retain associates with the
requisite experience and skills depends on several factors including, but not
limited to, our ability to:

. provide our associates with full-time employment;

. obtain the type of challenging and high-quality projects that our
associates seek;

. pay competitive compensation and provide competitive benefits; and

. provide our associates with flexibility as to hours worked and
assignment of client engagements.

We cannot assure you that we will be successful in accomplishing each of
these items and, even if we are, that we will be successful in attracting and
retaining the number of highly qualified and experienced associates necessary
to maintain and grow our business.

The market for professional services is highly competitive, and if we are
unable to compete effectively against our competitors our business and
operating results could be adversely affected.

We operate in a competitive, fragmented market, and we compete for clients
and associates with a variety of organizations that offer similar services. The
competition is likely to increase in the future due to the expected growth of
the market and the relatively few barriers to entry. Our principal competitors
include:

. consulting firms;

. employees loaned by the Big Five accounting firms;

. traditional and Internet-based staffing firms; and

. the in-house resources of our clients.

We cannot assure you that we will be able to compete effectively against
existing or future competitors. Many of our competitors have significantly
greater financial resources, greater revenues and greater name recognition,
which may afford them an advantage in attracting and retaining clients and
associates. In addition, our competitors may be able to respond more quickly to
changes in companies' needs and developments in the professional services
industry.

An economic downturn or change in the use of outsourced professional services
associates could adversely affect our business.

Our business may be significantly affected if there is an economic downturn.
If the general level of economic activity slows, our clients may delay or
cancel plans that involve professional services, particularly

outsourced professional services. Consequently, the demand for our associates
could decline, resulting in a loss of revenues. In addition, the use of
professional services associates on a project-by-project basis could decline
for non-economic reasons. In the event of a non-economic reduction in the
demand for our associates, our financial results could suffer.

Our business depends upon our ability to secure new projects from clients and,
therefore, we could be adversely affected if we fail to do so.

We do not have long-term agreements with our clients for the provision of
services. The success of our business is dependent on our ability to secure new
projects from clients. For example, if we are unable to secure new client
projects because of improvements in our competitors' service offerings or
because of an economic downturn decreasing the demand for outsourced
professional services, our business is likely to be materially adversely
affected.

We may be unable to adequately protect our intellectual property rights,
including our brand name. If we fail to adequately protect our intellectual
property rights, the value of such rights may diminish and our results of
operations and financial condition may be adversely affected.

We believe that establishing, maintaining and enhancing the Resources
Connection brand name is essential to our business. We have filed an
application for a United States service mark registration of our name and logo.
We may be unable to secure this registration. We are aware of other companies
using the name "Resources Connection" or some variation thereof. There could be
potential trade name or trademark infringement claims brought against us by the
users of these similar names or trademarks, and those users may have trademark
rights that are senior to ours. If an infringement suit were to be brought
against us, the cost of defending such a suit could be substantial. If the suit
were successful, we could be forced to cease using the service mark "Resources
Connection". Even if an infringement claim is not brought against us, it is
also possible that our competitors or others will adopt service names similar
to ours or that our clients will be confused by another company using a name or
trademark similar to ours, thereby impeding our ability to build brand
identity. We cannot assure you that our business would not be adversely
affected if confusion did occur or if we are required to change our name.

Our clients may be confused by the presence of competitors and other companies
that have names similar to our name.

We are aware of other companies using the name "Resources Connection" or
some variation thereof. Some of these companies provide outsourced services, or
are otherwise engaged in businesses that could be similar to ours. One company
has a web address that is nearly identical to ours,
"www.resourceconnection.com". The existence of these companies may confuse our
clients, thereby impeding our ability to build our brand identity.

We may be legally liable for damages resulting from the performance of projects
by our associates or for our clients' mistreatment of our associates.

Many of our engagements with our clients involve projects that are critical
to our clients' businesses. If we fail to meet our contractual obligations, we
could be subject to legal liability or damage to our reputation, which could
adversely affect our business, operating results and financial condition. It is
likely, because of the nature of our business, that we will be sued in the
future. Claims brought against us could have a serious negative effect on our
reputation and on our business, financial condition and results of operations.

Because we are in the business of placing our associates in the workplaces
of other companies, we are subject to possible claims by our associates
alleging discrimination, sexual harassment, negligence and other similar
activities by our clients. We may also be subject to similar claims from our
clients based on activities by our associates. The cost of defending such
claims, even if groundless, could be substantial and the associated negative
publicity could adversely affect our ability to attract and retain associates
and clients.

We may not be able to grow our business, manage our growth or sustain our
current business.

We have grown rapidly since our inception in 1996 by opening new offices and
by increasing the volume of services we provide through existing offices. There
can be no assurance that we will continue to be able to maintain or expand our
market presence in our current locations or to successfully enter other markets
or locations. Our ability to successfully grow our business will depend upon a
number of factors, including our ability to:

. grow our client base;

. expand profitably into new cities;

. provide additional professional services lines;

. maintain margins in the face of pricing pressures; and

. manage costs.

Even if we are able to continue our growth, the growth will result in new
and increased responsibilities for our management as well as increased demands
on our internal systems, procedures and controls, and our administrative,
financial, marketing and other resources. Failure to adequately respond to
these new responsibilities and demands may adversely affect our business,
financial condition and results of operation.

An increase in our international activities will expose us to additional
operational challenges that we might not otherwise face.

As we increase our international activities, we will have to confront and
manage a number of risks and expenses that we would not otherwise face if we
conducted our operations solely in the United States. If any of these risks or
expenses occurs, there could be a material negative effect on our operating
results. These risks and expenses include:

. difficulties in staffing and managing foreign offices as a result of,
among other things, distance, language and cultural differences;

. expenses associated with customizing our professional services for
clients in foreign countries;

. foreign currency exchange rate fluctuations, when we sell our
professional services in denominations other than U.S. dollars;

. protectionist laws and business practices that favor local companies;

. political and economic instability in some international markets;

. multiple, conflicting and changing government laws and regulations;

. trade barriers;

. reduced protection for intellectual property rights in some countries;
and

. potentially adverse tax consequences.

We may acquire companies in the future, and these acquisitions could disrupt
our business.

We may acquire companies in the future. Entering into an acquisition entails
many risks, any of which could harm our business, including:

. diversion of management's attention from other business concerns;

. failure to integrate the acquired company with our existing business;

. failure to motivate, or loss of, key employees from either our existing
business or the acquired business;

. potential impairment of relationships with our employees and clients;

. additional operating expenses not offset by additional revenue;

. incurrence of significant non-recurring charges;

. incurrence of additional debt with restrictive covenants or other
limitations;

. dilution of our stock as a result of issuing equity securities; and

. assumption of liabilities of the acquired company.

We have a limited operating history as an independent company.

We commenced operations in June 1996 as a division of Deloitte & Touche.
From January 1997 through April 1999, we operated as a wholly owned subsidiary
of Deloitte & Touche. In April 1999, we were sold by Deloitte & Touche.
Therefore, our business as an independent company has a limited operating
history. Consequently, the historical and pro forma information contained in
this prospectus may not be indicative of our future financial condition and
performance.

The terms of our transition services agreement between Resources Connection and
Deloitte & Touche may not have been on terms indicative of those available from
an independent party.

As part of the management-led buyout in April 1999, we entered into a
transition services agreement with Deloitte & Touche under which Deloitte &
Touche agreed to provide certain services to us at negotiated rates until none
of our offices remained in Deloitte & Touche office space, which occurred on
August 31, 2000. The negotiated rates we agreed to pay to Deloitte & Touche
under the transition services agreement may not be indicative of the rates that
an independent third party would have charged us for providing the same
services. Specifically, an independent third party may have charged us rates
more or less favorable than those charged by Deloitte & Touche. If the terms of
the transition services agreement, particularly the rates charged by Deloitte &
Touche, were more favorable to us than those available from a third party, our
general and administrative expenses will likely increase.

Our business could suffer if we lose the services of one or more key members of
our management.

Our future success depends upon the continued employment of Donald B.
Murray, our chief executive officer, and Stephen J. Giusto, our chief financial
officer. The departure of Mr. Murray, Mr. Giusto or any of the other key
members of our senior management team could significantly disrupt our
operations. Key members of our senior management team include Karen M. Ferguson
and Brent M. Longnecker, both of whom are executive vice presidents, John D.
Bower, our vice president, finance, and Kate W. Duchene, our chief legal
officer and executive vice president of human relations. We do not have
employment agreements with Mr. Bower or Ms. Duchene.

Deloitte & Touche has agreed not to compete with us and we may be adversely
affected when the noncompete expires.

In connection with the management buy-out, Deloitte & Touche agreed not to
compete with us in a manner that replicates our business model for a period
ending on the earlier of April 1, 2003 or the date that Deloitte & Touche
enters into a significant business combination. The noncompete does not
prohibit Deloitte & Touche from using their personnel in a loaned staff
capacity or from allowing their personnel to work on a less than full time
basis in accordance with the human resources policies of Deloitte & Touche.
When the noncompete expires, we may be adversely affected if Deloitte & Touche
chooses to compete in a manner previously prohibited by the noncompete.

Our quarterly financial results may be subject to significant fluctuations that
may increase the volatility of our stock price.

Our results of operations could vary significantly from quarter to quarter.
Factors that could affect our quarterly operating results include:

. our ability to attract new clients and retain current clients;

. the mix of client projects;

. the announcement or introduction of new services by us or any of our
competitors;

. the expansion of the professional services offered by us or any of our
competitors into new locations both nationally and internationally;

. changes in the demand for our services by our clients;

. the entry of new competitors into any of our markets;

. the number of holidays in a quarter, particularly the day of the week on
which they occur;

. changes in the pricing of our professional services or those of our
competitors;

. the amount and timing of operating costs and capital expenditures
relating to management and expansion of our business; and

. the timing of acquisitions and related costs, such as compensation
charges that fluctuate based on the market price of our common stock.

Due to these and other factors, we believe that quarter-to-quarter
comparisons of our results of operations are not meaningful indicators of
future performance. It is possible that in some future periods, our results of
operations may be below the expectations of investors. If this occurs, the
price of our common stock could decline.

We may be subject to laws and regulations that impose difficult and costly
compliance requirements and subject us to potential liability and the loss of
clients.

In connection with providing services to clients in certain regulated
industries, such as the gaming and energy industries, we are subject to
industry-specific regulations, including licensing and reporting requirements.
Complying with these requirements is costly and, if we fail to comply, we could
be prevented from rendering services to clients in those industries in the
future.

Risks Related to this Offering

Our stock price has been volatile, and you may lose all or substantially all of
your investment.

The market price of our common stock has fluctuated widely in the past and
is likely to continue to fluctuate in the future. Fluctuations in the market
price of our common stock could occur in response to factors such as:

. loss of a significant client or group of clients;

. changes in market valuations of professional services companies;

. improvements in the outsourcing of professionals by our competitors; and

. the introduction of new competitors in the market for outsourced
professionals.

In addition to these specific factors, companies listed on the Nasdaq Stock
Market's National Market have recently experienced extreme price and volume
fluctuations that have often been unrelated or disproportionate

to the operating performance of companies listed on these markets. Our common
stock is listed on the Nasdaq Stock Market's National Market and therefore has
and will be subject to this volatility. The volatility of the market may
materially adversely affect the market price of our common stock, regardless of
our actual operating performance.

Substantial sales of our common stock by our existing investors could cause our
stock price to decline.

Upon completion of the offering, we will have 20,992,080 shares of common
stock outstanding, assuming no exercise of options after June 30, 2001. Of this
amount, 11,608,582 shares, including the 3,532,591 shares offered by this
prospectus, will be freely tradable without restriction in the public market
unless purchased by "affiliates" of ours as that term is defined in Rule 144
under the Securities Act. Following the expiration of the 90-day lockup
agreements between the underwriters for this offering and us, our directors,
our executive officers, the selling stockholders and certain employee
stockholders, an additional 6,190,571 shares will be available for sale in the
public market, subject in some cases to compliance with the volume and other
limitations of Rule 144.

If our existing stockholders sell substantial amounts of our common stock,
including shares issued upon the exercise of outstanding options, in the public
market following this offering, the market price of our common stock could
fall. These sales also might make it more difficult for us to sell equity or
equity-related securities in the future at a time and price that we deem
appropriate. For a further description of the eligibility of shares for sale
into the public market following the offering, see "Shares Eligible for Future
Sale".

Our existing stockholders will continue to control us after this offering, and
they may make decisions with which you disagree.

Under a stockholders agreement entered into prior to our initial public
offering, certain entities affiliated with Evercore Partners L.L.C., or the
Evercore Partners, have agreed to vote their shares in favor of board nominees
designated by some of our management stockholders--Donald B. Murray, Stephen J.
Giusto, Karen M. Ferguson and Brent M. Longnecker-- and these management
stockholders have agreed to vote their shares in favor of board nominees
designated by the Evercore Partners. Collectively, the Evercore Partners and
the management stockholders have designated five of our nine current directors.
In addition, upon consummation of this offering, our executive officers,
directors and principal stockholders, including Evercore Partners Inc. and
certain of its affiliates, will own approximately 26.1% of the outstanding
shares of common stock, or 23.9% if the underwriters' over-allotment option is
exercised in full. As a result, Evercore Partners Inc. and/or these other
stockholders will be able to control us and direct our affairs, including the
election of directors and approval of significant corporate transactions. This
control of our board of directors also may delay, defer or even prevent a
change in control of our company, and may make some transactions more difficult
or impossible without the support of these stockholders. These transactions
might include proxy contests, tender offers, mergers or other purchases of
common stock that could give you the opportunity to realize a premium over the
then-prevailing market price for shares of our common stock.

It may be difficult for a third party to acquire our company, and this could
depress our stock price.

Delaware corporate law and our second restated certificate of incorporation
and bylaws contain provisions that could delay, defer or prevent a change of
control of our company or our management. These provisions could also
discourage proxy contests and make it difficult for you and other stockholders
to elect directors and take other corporate actions. As a result, these
provisions could limit the price that future investors are willing to pay for
your shares. These provisions:

. authorize our board of directors to establish one or more series of
undesignated preferred stock, the terms of which can be determined by
the board of directors at the time of issuance;

. divide our board of directors into three classes of directors, with each
class serving a staggered three-year term. Because the classification of
the board of directors generally increases the difficulty of replacing a
majority of the directors, it may tend to discourage a third party from
making a tender offer or otherwise attempting to obtain control of us
and may make it difficult to change the composition of the board of
directors;

. prohibit cumulative voting in the election of directors which, if not
prohibited, could allow a minority stockholder holding a sufficient
percentage of a class of shares to ensure the election of one or more
directors;

. require that any action required or permitted to be taken by our
stockholders must be effected at a duly called annual or special meeting
of stockholders and may not be effected by any consent in writing;

. state that special meetings of our stockholders may be called only by
the chairman of the board of directors, our chief executive officer, by
the board of directors after a resolution is adopted by a majority of
the total number of authorized directors, or by the holders of not less
than 10% of our outstanding voting stock;

. establish advance notice requirements for submitting nominations for
election to the board of directors and for proposing matters that can be
acted upon by stockholders at a meeting;

. provide that certain provisions of our certificate of incorporation can
be amended only by supermajority vote of the outstanding shares, and
that our bylaws can be amended only by supermajority vote of the
outstanding shares or our board of directors;

. allow our directors, not our stockholders, to fill vacancies on our
board of directors; and

. provide that the authorized number of directors may be changed only by
resolution of the board of directors.

Management's use of the net proceeds from this offering may not increase our
operating results or market value.

Management plans to use our net proceeds from this offering for working
capital and general corporate purposes. Consequently, our management will have
broad discretion with respect to the application of these net proceeds, and you
will not have the opportunity, as part of your investment in our common stock,
to assess whether the proceeds are being used appropriately. The offering
proceeds may be used for purposes that do not increase our operating results or
market value. Pending application of the proceeds, they might be placed in
investments that do not produce income or that lose value.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. These statements relate
to future events or our future financial performance. We have attempted to
identify forward-looking statements by terminology including "anticipates,"
"believes," "can," "continue," "could," "estimates," "expects," "intends,"
"may," "plans," "potential," "predicts," "should" or "will" or the negative of
these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks outlined under "Risk Factors," that may cause our,
or our industry's, actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these forward-
looking statements.

We assume no obligation to publicly update or revise these forward-looking
statements for any reason, or to update the reasons actual results could differ
materially from those anticipated in these forward-looking statements, even if
new information becomes available in the future.

This prospectus contains estimates made by independent parties relating to
market size and growth. These estimates involve a number of assumptions and
limitations. Projections, assumptions and estimates of our future performance
and the future performance of our industry are necessarily subject to a high
degree of uncertainty and risk due to a variety of factors, including those
described in "Risk Factors" and elsewhere in this prospectus.

USE OF PROCEEDS

We estimate that the net proceeds from the sale of 200,000 shares of common
stock, offered by us at the estimated public offering price of $19.95 per
share, will be $3.2 million, after deducting the underwriting discounts and
commissions and estimated offerings expenses. We intend to use the net proceeds
from this offering for working capital and general corporate purposes. We will
not receive any of the proceeds from the sale of shares of common stock by the
selling stockholders.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our capital stock. We
currently intend to retain any future earnings to finance the growth and
development of our business and do not anticipate paying any cash dividends in
the foreseeable future. Our credit agreement currently prohibits us from
declaring or paying any dividends or other distributions on any shares of our
capital stock other than dividends payable solely in shares of capital or the
stock of our subsidiaries. Any future determination to pay cash dividends will
be at the discretion of our board of directors and will depend upon our
financial condition, results of operations, capital requirements, general
business condition, contractual restrictions contained in our credit agreement
and other agreements, and other factors deemed relevant by our board of
directors.

PRICE RANGE OF COMMON STOCK

Our common stock has traded on The Nasdaq National Market under the symbol
"RECN" since December 15, 2000. Prior to that time, there was no public market
for our common stock. The approximate number of holders of record of our common
stock as of May 31, 2001 was 202.

The following table sets forth the range of high and low sales prices
reported on The Nasdaq National Market for our common stock for the periods
indicated.

Price Range of
Common Stock
---------------
High Low
------- -------

Fiscal 2001:
Third Quarter (December 15, 2000 through February 24,
2001)................................................... $25.375 $13.437
Fourth Quarter........................................... $33.797 $16.625

Fiscal 2002:
First Quarter (through August 7, 2001)................... $34.250 $ 19.80

CAPITALIZATION

The following table sets forth as of May 31, 2001 our capitalization on an
actual basis and on an as adjusted basis to reflect the sale by us of 200,000
shares of common stock in this offering at the estimated public offering price
of $19.95 per share. You should read this information together with the
"Selected Historical Consolidated Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the financial
statements and related notes contained elsewhere in this prospectus.

As of May 31, 2001
--------------------
Actual As Adjusted
------- -----------
(in thousands)

Stockholders' equity:
Preferred Stock, $0.01 par value, 5,000,000 shares
authorized and no shares issued or outstanding, actual;
5,000,000 shares authorized and no shares issued and
outstanding, as adjusted............................... $ -- $ --
Common Stock, $0.01 par value, 35,000,000 shares
authorized and 20,735,000 shares issued and
outstanding, actual; 35,000,000 shares authorized and
20,935,000 issued and outstanding, as adjusted......... 207 209
Additional paid-in capital.............................. 66,507 69,686
Deferred stock compensation............................. (1,507) (1,507)
Accumulated other comprehensive loss.................... (53) (53)
Notes receivable from stockholders...................... (164) (164)
Retained earnings....................................... 21,043 21,043
Treasury stock, at cost, 48,000 shares at May 31, 2001.. (1) (1)
------- -------
Total stockholders' equity.............................. 86,032 89,213
------- -------
Total capitalization.................................. $86,032 $89,213
======= =======

This table excludes the following shares:

. 3,052,000 shares of common stock issuable on the exercise of stock
options outstanding as of May 31, 2001;

. 1,988,000 additional shares of common stock reserved for future grant or
issuance under the 1999 Long-Term Incentive Plan as of May 31, 2001; and

. 1,200,000 additional shares of common stock reserved for issuance under
the Employee Stock Purchase Plan as of May 31, 2001.

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

You should read the following selected historical consolidated financial
data in conjunction with our consolidated financial statements and related
notes beginning on page F-1 and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" appearing on page 18. The
statement of income data for the year ended May 31, 1997, and the consolidated
balance sheet data at May 31, 1997 were derived from the unaudited financial
statements of Resources Connection LLC and are not included in this prospectus.
The statements of income data for the year ended May 31, 1998, and the period
from June 1, 1998 to March 31, 1999, and the balance sheet data at May 31, 1998
were derived from the financial statements of Resources Connection LLC that
have been audited by PricewaterhouseCoopers LLP, independent accountants, and,
with respect to the statement of income data for the period from June 1, 1998
to March 31, 1999, is included elsewhere in this prospectus. The consolidated
statements of income data for the period from November 16, 1998 to May 31,
1999, and the years ended May 31, 2000 and 2001, and the consolidated balance
sheet data at May 31, 1999, 2000 and 2001 were derived from our consolidated
financial statements that have been audited by PricewaterhouseCoopers LLP and,
with respect to the consolidated statements of income data, and the
consolidated balance sheet data at May 31, 2000 and 2001, are included
elsewhere in this prospectus. Historical results are not necessarily indicative
of results that may be expected for any future periods.

Resources Connection LLC Resources Connection, Inc.
------------------------------------------- -------------------------------------------
Period from Period from
Year Ended Year Ended June 1, 1998 November 16, 1998 Year Ended Year Ended
May 31, 1997 May 31, 1998 to March 31, 1999 to May 31, 1999 May 31, 2000 May 31, 2001
------------ ------------ ----------------- ----------------- ------------ ------------
(unaudited)
(dollar amounts in thousands, except per share data)

Consolidated Statements of Income
Data:
Revenue................. $9,331 $29,508 $55,438 $15,384 $126,332 $189,752
Direct cost of
services............... 5,367 16,671 31,253 8,618 73,541 110,811
------ ------- ------- ------- -------- --------
Gross profit............ 3,964 12,837 24,185 6,766 52,791 78,941
Selling, general and
administrative
expenses............... 3,086 9,035 17,071 4,274 34,648 49,964
Amortization of
intangible assets...... -- -- -- 371 2,231 2,273
Depreciation expense.... 9 79 118 30 285 866
------ ------- ------- ------- -------- --------
Income from operations.. 869 3,723 6,996 2,091 15,627 25,838
Interest income......... -- -- -- -- -- (633)
Interest expense........ -- -- -- 734 4,717 2,676
------ ------- ------- ------- -------- --------
Income before provision
for income taxes and
extraordinary charge... 869 3,723 6,996 1,357 10,910 23,795
Provision for income
taxes.................. -- -- -- 565 4,364 9,518
------ ------- ------- ------- -------- --------
Income before
extraordinary charge... 869 3,723 6,996 792 6,546 14,277
Extraordinary charge,
net of tax effect of
$381................... -- -- -- -- -- 572
------ ------- ------- ------- -------- --------
Net income.............. $ 869 $ 3,723 $ 6,996 $ 792 $ 6,546 $ 13,705
====== ======= ======= ======= ======== ========
Pro Forma Data(1):
Income before provision
for income taxes....... $ 869 $ 3,723 $ 6,996
Pro forma provision for
income taxes........... 348 1,489 2,798
------ ------- -------
Pro forma net income.... $ 521 $ 2,234 $ 4,198
====== ======= =======
Net income per common
share:
Basic before
extraordinary charge.. $ 0.09 $ 0.42 $ 0.80
Extraordinary charge... -- -- 0.03
------- -------- --------
Basic.................. $ 0.09 $ 0.42 $ 0.77
======= ======== ========
Diluted before
extraordinary charge.. $ 0.09 $ 0.42 $ 0.74
Extraordinary charge... -- -- 0.03
------- -------- --------
Diluted................ $ 0.09 $ 0.42 $ 0.71
======= ======== ========
Number of shares used in
computing net income
per share (in
thousands):
Basic.................. 8,691 15,630 17,864
======= ======== ========
Diluted................ 8,691 15,714 19,421
======= ======== ========
Other Data:
Number of offices open
at end of period....... 9 18 27 28 35 44
Total number of
associates on
assignment at end of
period................. 127 326 675 697 1,056 1,283

Resources Resources Connection,
Connection LLC Inc.
------------------ ------------------------
May 31, May 31,
------------------ ------------------------
1997 1998 1999 2000 2001
----------- ------ ------- ------- --------
(unaudited)

Consolidated Balance Sheet Data:
Cash and cash equivalents......... $ -- $3,168 $ 876 $ 4,490 $ 34,503
Working capital................... 1,133 4,504 7,150 7,664 42,965
Total assets...................... 1,409 7,976 58,954 70,106 105,345
Long-term debt, including current
portion.......................... -- -- 42,531 41,771 --
Stockholders' equity.............. 1,205 4,928 10,610 17,185 86,032

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results
of operations should be read in conjunction with our financial statements and
related notes. This discussion and analysis contains forward-looking statements
that involve risks and uncertainties. Our actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors including, but not limited to, those discussed in
"Risk Factors" starting on page 6 and elsewhere in this prospectus.

Overview

Resources Connection is a professional services firm that provides
experienced accounting and finance, human resources management and information
technology professionals to clients on a project-by-project basis. We assist
our clients with discrete projects requiring specialized professional expertise
in accounting and finance, such as mergers and acquisitions due diligence,
financial analyses (e.g., product costing and margin analyses) and corporate
reorganization and tax-related projects. In addition, we provide human
resources management services, such as compensation program design and
implementation, and information technology services, such as transitions of
management information systems. We also assist our clients with periodic needs
such as budgeting and forecasting, audit preparation and public reporting.

We began operations in June 1996 as a division of Deloitte & Touche and
operated as a wholly owned subsidiary of Deloitte & Touche from January 1997
until April 1999. In November 1998, our management formed RC Transaction Corp.,
renamed Resources Connection, Inc., to raise capital for an intended
management-led buyout. In April 1999, we completed a management-led buyout in
partnership with our investor Evercore Partners, Inc., four of its affiliates
and six other investors. In connection with the buyout, we entered into a
transition services agreement with Deloitte & Touche, whereby Deloitte & Touche
agreed to provide certain services to us at negotiated rates during the period
that we maintained our offices within their locations. We have completed the
transition of all of our offices previously located in Deloitte & Touche space.
The financial statements of Resources Connection LLC for the period from June
1, 1998 to March 31, 1999, and financial statements of Resources Connection,
Inc. for all periods thereafter, include charges for services supplied by
Deloitte & Touche. Although these transition services were negotiated at arms
length, the charges for these services may not necessarily be indicative of
rates available from third parties. Our management has been unable to determine
the availability and the cost of similar services had they been provided by
third parties.

Growth in revenue, to date, has generally been the result of establishing
offices in major markets throughout the United States. We established nine
offices during fiscal 1997, our initial fiscal year, all in the Western United
States. In fiscal 1998, we established nine additional offices, which extended
our geographic reach to the Midwest and Eastern United States. For the year
ended May 31, 1999, we opened ten more offices and established a new service
line in information technology. In fiscal 2000, we established four more
domestic offices, established a new service line in human resources management
and also began operations in Toronto, Canada; Taipei, Taiwan; and Hong Kong,
People's Republic of China. In fiscal 2001, we established nine additional
domestic offices. In the first quarter of fiscal 2002, we have begun operations
in London, England. Our new service lines were introduced in a limited number
of our offices. As a result, we currently serve our clients through 41 offices
in the United States and four offices abroad.

We earn revenue primarily by charging our corporate clients on an hourly
basis for the professional services of our associates. We recognize revenue
once services have been rendered and invoice our clients on a weekly basis. Our
clients are contractually obligated to pay us for all hours billed. To a much
lesser extent, we also earn revenue if a client hires an associate onto its
permanent payroll. This type of contractually non-refundable revenue is
recognized at the time our client completes the hiring process and represented
less than 4% of our revenue in each of the following periods: June 1, 1998 to
March 31, 1999, April 1, 1999 to May 31, 1999 and fiscal 2000. In fiscal 2001,
this type of revenue represented less than 3% of our revenue. We

periodically review our outstanding accounts receivable balance and determine
an estimate of the amount of those receivables we believe may prove
uncollectible. Our provision for bad debts is included in our selling, general
and administrative expenses.

The costs to pay our professional associates and all related benefit and
incentive costs, including provisions for paid time off and other employee
benefits, are included in direct cost of services. We pay our associates on an
hourly basis for all hours worked on client engagements and, therefore, direct
cost of services tends to vary directly with the volume of revenue we earn. We
expense the benefits we pay to our associates as they are earned. These
benefits include paid vacation and holidays; referral bonus programs; group
health, dental and life insurance programs; a matching 401(k) retirement plan;
a bonus incentive plan; and professional development and career training. In
addition, we pay the related costs of employment, including state and federal
payroll taxes, workers' compensation insurance, unemployment insurance and
associated costs. Typically, an associate must work a threshold number of hours
to be eligible for all of the benefits. We recognize direct cost of services
when incurred.

Selling, general and administrative expenses include the payroll and related
costs of our national and local management as well as general and
administrative, marketing and recruiting costs. Our sales and marketing efforts
are led by our management team who are paid a salary and earn bonuses based on
operating results for our company as a whole and within each manager's
geographic market.

Results of Operations

The following tables set forth, for the periods indicated, our consolidated
statements of income data. These historical results are not necessarily
indicative of future results.

Resources Connection LLC Resources Connection, Inc.
------------------------ ------------------------------------------------
Period from Period from
June 1, 1998 to November 16, 1998 to Year Ended Year Ended
March 31, 1999 May 31, 1999 May 31, 2000 May 31, 2001
------------------------ ---------------------- ------------ ------------
(amounts in thousands)

Revenue............................................ $55,438 $15,384 $126,332 $189,752
Direct cost of services............................ 31,253 8,618 73,541 110,811
------- ------- -------- --------
Gross profit....................................... 24,185 6,766 52,791 78,941
Selling, general and administrative expenses....... 17,071 4,274 34,648 49,964
Amortization of intangible assets.................. -- 371 2,231 2,273
Depreciation expense............................... 118 30 285 866
------- ------- -------- --------
Income from operations............................. 6,996 2,091 15,627 25,838
Interest expense, net.............................. -- 734 4,717 2,043
------- ------- -------- --------
Income before provision for income taxes and
extraordinary charge.............................. 6,996 1,357 10,910 23,795
Provision for income taxes(1)...................... -- 565 4,364 9,518
------- ------- -------- --------
Income before extraordinary charge................. 6,996 792 6,546 14,277
Extraordinary charge, net of tax effect of $381.... -- -- -- 572
------- ------- -------- --------
Net income(1)...................................... $ 6,996 $ 792 $ 6,546 $ 13,705
--------------------------------------------------
======= ======= ======== ========

Our operating results for the periods indicated are expressed as a percentage
of revenue below.

Resources Connection LLC Resources Connection, Inc.
------------------------ ----------------------------------------------
Period from Period from
June 1, 1998 to November 16, 1998 to Year Ended Year Ended
March 31, 1999 May 31, 1999 May 31, 2000 May 31, 2001
------------------------ -------------------- ------------ ------------

Revenue.............................................. 100.0% 100.0% 100.0% 100.0%
Direct cost of services.............................. 56.4 56.0 58.2 58.4
----- ----- ----- -----
Gross profit......................................... 43.6 44.0 41.8 41.6
Selling, general and administrative
expenses............................................ 30.8 27.8 27.4 26.3
Amortization of intangible assets.................... -- 2.4 1.8 1.2
Depreciation expense................................. 0.2 0.2 0.2 0.5
----- ----- ----- -----
Income from operations............................... 12.6 13.6 12.4 13.6
Interest expense, net................................ -- 4.8 3.7 1.1
----- ----- ----- -----
Income before provision for income taxes and
extraordinary charge................................ 12.6 8.8 8.7 12.5
Provision for income taxes(1)........................ -- 3.7 3.5 5.0
----- ----- ----- -----
Income before extraordinary charge................... 12.6 5.1 5.2 7.5
Extraordinary charge, net of tax effect of $381...... -- -- -- 0.3
----- ----- ----- -----
Net income(1)........................................ 12.6% 5.1% 5.2% 7.2%
--------------------------------------------------
===== ===== ===== =====

Year Ended May 31, 2001 compared to Year Ended May 31, 2000

Revenue. Revenue increased $63.4 million or 50.2% to $189.8 million for the
year ended May 31, 2001 from $126.3 million for the year ended May 31, 2000.
The increase in total revenue was primarily due to the growth in total billable
hours resulting from an increase in the number of associates on assignment from
1,056 at the end of fiscal 2000 to 1,283 at the end of fiscal 2001 and a 12%
increase in the average billing rate per hour. Despite the increase in rates,
the increase in revenue is primarily attributable to the increase in the number
of associates. Revenue also increased from the contribution of the nine new
offices during fiscal 2001.

Direct Cost of Services. Direct cost of services increased $37.3 million or
50.7% to $110.8 million for the year ended May 31, 2001 from $73.5 million for
the year ended May 31, 2000. This increase was primarily the result of the
growth in the number of associates on assignment during fiscal 2001 and a 1.0%
increase in the average pay rate per hour between the two years. Direct cost of
services increased slightly as a percentage of revenue from 58.2% for fiscal
year 2000 to 58.4% for fiscal year 2001. This net increase reflects the impact
of our enriched benefit programs for associates offset by the incremental
increase in billing rate per hour compared to pay rate per hour.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $15.3 million or 44.2% to $50.0 million for
the year ended May 31, 2001 from $34.6 million for the year ended May 31, 2000.
This increase was attributable to the cost of operating and staffing the nine
new offices opened during fiscal 2001 and the growth in operations at offices
opened prior to fiscal 2001. Management and administrative headcount increased
from 224 at the end of fiscal 2000 to 290 at the end of fiscal 2001. Selling,
general and administrative expenses decreased as a percentage of revenue from
27.4% for the year ended May 31, 2000 to 26.3% for the year ended May 31, 2001.
This percentage decrease resulted primarily from improved operating leverage
experienced in offices that had been open more than one year.

Amortization and Depreciation Expenses. Amortization of intangible assets
was relatively unchanged at $2.3 million for the year ended May 31, 2001
compared to $2.2 million for the year ended May 31, 2000. In

June 2001, the Financial Accounting Standards Board, or FASB, approved SFAS No.
142, "Goodwill and Other Intangible Assets," which supercedes APB Opinion No.
17, "Intangible Assets". The FASB is currently finalizing this statement with
an expected issuance in July 2001. Under its proposed changes, SFAS No. 142
establishes new standards for goodwill acquired in a business combination and
eliminates amortization of goodwill and instead sets forth methods to
periodically evaluate goodwill for impairment. We expect to adopt this
statement during the first quarter of fiscal 2002. During the year ended May
31, 2001, goodwill amortization totaled $2.1 million.

Depreciation expense increased from $285,000 for the year ended May 31, 2000
to $866,000 for the year ended May 31, 2001. This increase reflects the impact
of the completed moves out of our former parent's office space into our own
space resulting in additional investment in furniture and leasehold
improvements, continuing growth in our number of offices and our investment in
information technology.

Interest Expense, Net. Net interest expense decreased from $4.7 million for
the year ended May 31, 2000 to $2.0 million for the year ended May 31, 2001.
This decrease is the result of the repayment of our term loan and subordinated
notes on December 20, 2000 using the proceeds from our initial public offering
of our common stock. After the repayment, we had no outstanding long-term debt
balances. The remaining net proceeds from the offering of approximately $15.3
million, as well as cash generated from operations, have been invested in money
market funds and commercial paper and are classified as cash equivalents due to
the short maturities of these investments. Interest income was $633,000 for the
year ended May 31, 2001.

Income Taxes. The provision for income taxes increased from $4.4 million for
the year ended May 31, 2000 to $9.5 million for the year ended May 31, 2001.
The effective tax rate remained at 40% in both fiscal years. Our effective rate
differs from the federal statutory rate primarily due to state taxes, net of
federal benefit.

Extraordinary Charge. The extraordinary charge of $572,000 (net of tax
effect of $381,000) is the result of the write-off of the net remaining balance
of unamortized debt issuance costs associated with our term loan and
subordinated debt. The approximately $38.8 million of debt was repaid in full
on December 20, 2000 using a portion of the proceeds of our initial public
offering of our common stock.

Year Ended May 31, 2000 compared to the period from November 16, 1998 to May
31, 1999

Revenue. Revenue increased $110.9 million or 720.1% to $126.3 million for
the year ended May 31, 2000 from $15.4 million for the period from November 16,
1998 to May 31, 1999. The increase in total revenue was the result of the
comparison of a full year of operations in fiscal 2000, compared to only two
months of operations following the acquisition on April 1, 1999. Prior to April
1, 1999, Resources Connection, Inc. had no substantial operations.

Direct Cost of Services. Direct cost of services increased $64.9 million or
754.7% to $73.5 million for the year ended May 31, 2000 from $8.6 million for
the period from November 16, 1998 to May 31, 1999. The increase in direct cost
of services was primarily the result of the comparison of a full year of
operations compared to only two months of operations following the acquisition.
Direct cost of services increased as a percentage of revenue from 56.0% for the
period from November 16, 1998 to May 31, 1999 to 58.2% for the year ended May
31, 2000. During the year ended May 31, 2000, we enriched our benefit programs
for associates and more associates qualified for benefits.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $30.3 million or 704.7% to $34.6 million for
the year ended May 31, 2000 from $4.3 million for the period from November 16,
1998 to May 31, 1999. The increase in selling, general and administrative
expenses was primarily the result of the comparison of a full year of
operations compared to only two months of operations following the acquisition
and partially the result of an increase in number of offices from 28 at May 31,
1999 to 35 at May 31, 2000. Selling, general and administrative expenses
decreased as a percentage of revenue from

27.8% for the period from November 16, 1998 to May 31, 1999 to 27.4% for the
year ended May 31, 2000 due to these expenses being spread over a larger
revenue base.

Amortization and Depreciation Expenses. Amortization of intangible assets
increased from $371,000 for the period from November 16, 1998 to May 31, 1999
to $2.2 million for the year ended May 31, 2000. The increase was related to
our acquisition of Resources Connection LLC. Results for the year ended May 31,
2000 reflect a full year of amortization expense compared with only two months
subsequent to the acquisition in the period from November 16, 1998 to May 31,
1999.

Depreciation expense increased from $30,000 for the period from November 16,
1998 to May 31, 1999 to $285,000 for the year ended May 31, 2000. The increase
in depreciation expense was primarily the result of the comparison of a full
year of operations compared to only two months of operations in the period from
November 16, 1998 to May 31, 1999.

Interest Expense. Interest expense increased from $734,000 for the period
from November 16, 1998 to May 31, 1999 to $4.7 million for the year ended May
31, 2000, related primarily to debt incurred in connection with the acquisition
of Resources Connection LLC. From May 31, 1999 to May 31, 2000, the term loan
portion of the acquisition debt was reduced from $18.0 million to $16.5
million. The balance due on the subordinated notes increased from $22.4 million
as of May 31, 1999 to $25.3 million as of May 31, 2000 as we deferred interest
payments due on the subordinated debt. The outstanding balance due on the
revolver as of May 31, 1999 of $2.1 million was repaid during the first quarter
of fiscal 2000; the revolver has not been utilized since January 2000.

Income Taxes. The provision for income taxes increased from $565,000 for the
period from November 16, 1998 to May 31, 1999 to $4.4 million for the year
ended May 31, 2000. The effective tax rate decreased from 41.6% for the period
from November 16, 1998 to May 31, 1999 to 40.0% for the year ended May 31,
2000. Our effective rate differs from the federal statutory rate primarily due
to state taxes, net of federal benefit.

Fiscal 2000 compared to Pro Forma Fiscal 1999 (Revenue and Direct Cost of
Services)

The following paragraphs compare the revenue and direct cost of services of
Resources Connection, Inc. for fiscal 2000 to the pro forma revenue and direct
cost of service for Resources Connection, Inc. for the period from November 1,
1998 to May 31, 1999 as if our acquisition of Resources Connection LLC had
occurred on June 1, 1998.

Pro Forma Revenue. Revenue increased $55.5 million, or 78.4%, to $126.3
million in fiscal 2000 from $70.8 million in pro forma fiscal 1999. The
increase in total revenues was primarily due to the growth in the total
billable hours resulting from the increase in the number of associates on
assignment from 697 at the end of pro forma fiscal 1999 to 1,056 at the end of
fiscal 2000 and an increase of 6.3% in the average billing rate per hour.
Substantially all of the increase in revenues is attributable to the increase
in the number of associates. During fiscal 2000, we opened seven new offices,
introduced our human resources management service line to certain existing
markets and expanded our recently introduced information technology service
line in existing market places. Our new service line contributed $2.3 million
to revenues during the year or 1.8% of our increase in revenue.

Pro Forma Direct Cost of Services. Direct cost of services increased $33.7
million, or 84.5%, to $73.5 million in fiscal 2000 from $39.9 million in pro
forma fiscal 1999. This increase was the result of the growth in the number of
associates on assignment from 697 at the end of pro forma fiscal 1999 to 1,056
at the end of fiscal 2000 and an increase of 5.7% in the average pay rate per
hour. Substantially all of the increase in direct cost of services is
attributable to the increase in the number of associates. In addition, we
enriched certain of our benefit programs for associates during fiscal 2000 and
more of our associates qualified for benefits. Direct cost of services as a
percentage of revenue in fiscal 2000 was 58.2% as compared to 56.4% in pro
forma fiscal 1999, reflecting primarily the impact of these enriched benefit
programs.

Quarterly Results

The following table sets forth our unaudited quarterly consolidated
statements of income data for each of the eight quarters in the two-year period
ended May 31, 2001. In the opinion of management, this data has been prepared
on a basis substantially consistent with our audited consolidated financial
statements appearing elsewhere in this prospectus, and reflect and include all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of the data. The quarterly data should be read together with our
consolidated financial statements and related notes appearing elsewhere in this
prospectus. The operating results are not necessarily indicative of the results
to be expected in any future period.

Resources Connection, Inc.
-------------------------------------------------------------------
Quarter Ended
-------------------------------------------------------------------
Nov. Feb. Aug. Nov. Feb.
Aug. 31, 30, 29, May 31, 31, 30, 28, May 31,
1999 1999 2000 2000 2000 2000 2001 2001
-------- ------- ------- ------- ------- ------- ------- -------
(in thousands)

Consolidated Statements
of
Income Data:
Revenue................. $25,533 $28,581 $33,384 $38,834 $39,155 $45,046 $49,830 $55,721
Direct cost of
services............... 14,491 16,626 19,765 22,659 22,749 25,987 29,457 32,618
------- ------- ------- ------- ------- ------- ------- -------
Gross profit............ 11,042 11,955 13,619 16,175 16,406 19,059 20,373 23,103
Selling, general and
administrative
expenses............... 6,813 8,050 9,365 10,420 10,720 12,493 12,680 14,071
Amortization of
intangible assets...... 511 577 572 571 578 565 565 565
Depreciation expense.... 51 49 31 154 192 216 227 231
------- ------- ------- ------- ------- ------- ------- -------
Income from operations.. 3,667 3,279 3,651 5,030 4,916 5,785 6,901 8,236
Interest income......... -- -- -- -- (19) (44) (251) (319)
Interest expense........ 1,154 1,186 1,199 1,178 1,228 1,184 248 16
------- ------- ------- ------- ------- ------- ------- -------
Income before provision
for income taxes and
extraordinary charge... 2,513 2,093 2,452 3,852 3,707 4,645 6,904 8,539
Provision for income
taxes.................. 1,006 835 981 1,542 1,483 1,858 2,762 3,415
------- ------- ------- ------- ------- ------- ------- -------
Income before
extraordinary charge... 1,507 1,258 1,471 2,310 2,224 2,787 4,142 5,124
Extraordinary charge,
net of tax effect of
$381................... -- -- -- -- -- -- 572 --
------- ------- ------- ------- ------- ------- ------- -------
Net income.............. $ 1,507 $ 1,258 $ 1,471 $ 2,310 $ 2,224 $ 2,787 $ 3,570 $ 5,124
======= ======= ======= ======= ======= ======= ======= =======
Net income per common
share(1):
Basic................. $ 0.10 $ 0.08 $ 0.09 $ 0.15 $ 0.14 $ 0.18 $ 0.18 $ 0.25
======= ======= ======= ======= ======= ======= ======= =======
Diluted............... $ 0.10 $ 0.08 $ 0.09 $ 0.15 $ 0.13 $ 0.16 $ 0.17 $ 0.23
======= ======= ======= ======= ======= ======= ======= =======

--------
(1) Net income per common share calculations for each of the quarters were
based upon the weighted average number of shares outstanding for each
period, and the sum of the quarters may not necessarily be equal to the
full year net income per common share amount.

Our quarterly results have fluctuated in the past and we believe they will
continue to do so in the future. Factors that could affect our quarterly
operating results include:

. our ability to attract new clients and retain current clients;

. the mix of client projects;

. the announcement or introduction of new services by us or any of our
competitors;

. the expansion of the professional services offered by us or any of our
competitors into new locations both nationally and internationally;

. changes in the demand for our services by our clients;

. the entry of new competitors into any of our markets;

. the number of holidays in a quarter, particularly the day of the week on
which they occur;

. changes in the pricing of our professional services or those of our
competitors;

. the amount and timing of operating costs and capital expenditures
relating to management and expansion of our business; and

. the timing of acquisitions and related costs, such as compensation
charges that fluctuate based on the market price of our common stock.

Due to these and other factors, we believe that quarter-to-quarter
comparisons of our results of operations are not meaningful indicators of
future performance.

Liquidity and Capital Resources

Our primary source of liquidity is cash provided by our operations and, to
the extent necessary, available commitments under our revolving line of credit.
We have generated positive cash flows from operations since inception, and we
continued to do so during the year ended May 31, 2001.

In April 1999, in connection with the acquisition of Resources Connection
LLC, we entered into a $28.0 million credit agreement with Bankers Trust
Company, an affiliate of Deutsche Banc Alex. Brown Inc., U.S. Bank National
Association and BankBoston, N.A., which provides for an $18.0 million term loan
facility and a $10.0 million revolving credit facility. On December 20, 2000,
we repaid the remaining balance on the term loan of $11.9 million using the
proceeds from our initial public offering of common stock. The credit agreement
expires on October 1, 2003. As of May 31, 2001, we had no outstanding
borrowings under the revolving credit facility. Borrowings under the credit
agreement are collateralized by all of our assets. Our interest rate options
under our credit agreement are prime rate plus 0.5% to 1.5% and a Eurodollar-
based rate plus 1.5% to 2.5%. Interest is payable on the revolving credit
facility at various intervals no less frequent than quarterly.

In April 1999, we issued $22.0 million of 12% subordinated promissory notes
to certain investors. Interest accrued on the notes at 12% and was payable on a
quarterly basis; however, we could elect and did elect to defer payment of the
interest and to add the balance due to the outstanding principal balance. On
December 20, 2000, we used approximately $26.9 million of the net proceeds from
our initial public offering to retire the then outstanding balance on these
subordinated promissory notes.

Net cash provided by operating activities totaled $20.9 million in fiscal
2001, $10.5 million in fiscal 2000, and $3.0 million in fiscal 1999 on a pro
forma combined basis (including $5.0 million in cash acquired in connection
with our acquisition of Resources Connection LLC). Cash provided by operations
resulted primarily from the net earnings of the company partially offset by
growth in working capital.

Net cash used in investing activities totaled $2.0 million in fiscal 2001,
$3.3 million in fiscal 2000 and $51.1 million in fiscal 1999 on a pro forma
combined basis. Other than in fiscal 1999, when we used cash to purchase
Resources Connection LLC, cash used in investing activities was a result of
purchases of property and equipment.

Net cash provided by financing activities was $11.1 million in fiscal 2001
and $50.8 million in fiscal 1999 on a pro forma combined basis, while cash used
in financing activities was $3.6 million in fiscal 2000. The net cash provided
by financing activities in fiscal 2001 reflects the payment required under our
term debt agreement following the completion of our initial public offering of
common stock, and retirement of our subordinated promissory notes, offset by
the remaining proceeds of the offering. Cash used in financing activities
during fiscal 2000 resulted from the repayment of our term debt and the net
decrease in borrowings under our

revolving line of credit. Net cash generated from financing activities in
fiscal 1999 resulted from the issuance of common stock, the issuance of
subordinated promissory notes and proceeds from bank debt associated with the
purchase of Resources Connection LLC and the resultant financing of the ongoing
operations of our company thereafter.

Our ongoing operations and anticipated growth will require us to continue
making investments in capital equipment, primarily technology, hardware and
software. In addition, we may consider making certain strategic acquisitions.
We anticipate that our current cash, existing availability under our revolving
line of credit and the ongoing cash flows from our operations will be adequate
to meet our working capital and capital expenditure needs for at least the next
12 months. Our longer-term plans for expanding our business anticipate that
these sources of liquidity will be sufficient for the foreseeable future. If we
require additional capital resources to grow our business, either internally or
through acquisition, we may seek to sell additional equity securities or to
secure additional debt financing. The sale of additional equity securities or
the addition of new debt financing could result in additional dilution to our
stockholders. We may not be able to obtain financing arrangements in amounts or
on terms acceptable to us in the future. In the event we are unable to obtain
additional financing when needed, we may be compelled to delay or curtail our
plans to develop our business, which could have a material adverse affect on
our operations, market position and competitiveness.

Qualitative and Quantitative Disclosure About Market Risk

Interest Rate Risk. At the end of fiscal 2001, we had approximately $34.5
million of cash and highly liquid short-term investments. These investments are
subject to changes in interest rates, and to the extent interest rates were to
decline, it would reduce our interest income.

Foreign Currency Exchange Rate Risk. To date, our foreign operations have
not been significant to our overall operations, and our exposure to foreign
currency exchange rate risk has been low. However, as our strategy to continue
expanding foreign operations progresses, we expect more of our revenues will be
derived from foreign operations denominated in the currency of the applicable
markets. As a result, our operating results could become subject to
fluctuations based upon changes in the exchange rates of foreign currencies in
relation to the U.S. dollar. Although we intend to monitor our exposure to
foreign currency fluctuations, including the use of financial hedging
techniques when we deem it appropriate, we cannot assure you that exchange rate
fluctuations will not adversely affect our financial results in the future.

Recent Accounting Pronouncements

In December 1999, the SEC issued Staff Accounting Bulletin No. 101 (SAB 101)
entitled "Revenue Recognition," which outlines the basic criteria that must be
met to recognize revenue and provides guidance for the presentation of revenue
and for disclosure related to revenue recognition policies in financial
statements filed with the SEC. The adoption of SAB 101 did not have a material
impact on our financial position or results of operation.

In March 2000, the FASB issued Interpretation No. 44, or FIN 44, entitled
"Accounting for Certain Transactions Involving Stock Compensation," which is an
interpretation of Accounting Principles Board No. 25, or APB 25. This
interpretation clarifies:

. the definition of an employee for purposes of applying APB 25;

. the criteria for determining whether a plan qualifies as a
noncompensatory plan;

. the accounting consequences of various modifications to the terms of a
previously fixed stock option or award; and

. the accounting for an exchange of stock compensation awards in a
business combination.

This interpretation was effective July 1, 2000. The adoption of FIN 44 did
not have a material impact on our financial position or results of operations.

In June 2001, the FASB approved SFAS No. 141, "Business Combinations" and is
currently finalizing this statement with an expected issuance in July 2001.
Under its proposed changes, SFAS No. 141 establishes new standards for
accounting and reporting requirements for business combinations and will
require that the purchase method of accounting be used for all business
combinations initiated after June 30, 2001. Use of the pooling-of-interests
method will be prohibited. The Company expects to adopt this statement during
the first quarter of fiscal 2002. Management does not believe that SFAS No. 141
will have a material impact on the Company's consolidated financial statements.

In June 2001, the FASB approved SFAS No. 142, "Goodwill and Other Intangible
Assets," which supersedes APB Opinion No. 17, "Intangible Assets". The FASB is
currently finalizing this statement with an expected issuance in July 2001.
Under its proposed changes, SFAS No. 142 establishes new standards for goodwill
acquired in a business combination and eliminates amortization of goodwill and
instead sets forth methods to periodically evaluate goodwill for impairment.
The Company expects to adopt this statement during the first quarter of fiscal
2002. During the year ended May 31, 2001, goodwill amortization totaled
$2.1 million.

BUSINESS

Overview

Resources Connection is a professional services firm that provides
experienced accounting and finance, human resources management and information
technology professionals to clients on a project-by-project basis. We assist
our clients with discrete projects requiring specialized professional expertise
in accounting and finance, such as mergers and acquisitions due diligence,
financial analyses (e.g., product costing and margin analyses), corporate
reorganization and tax-related projects. In addition, we provide human
resources management services, such as compensation program design and
implementation, and information technology services, such as transitions of
management information systems. We also assist our clients with periodic needs
such as budgeting and forecasting, audit preparation and public reporting.

We were founded in June 1996 by a team at Deloitte & Touche, led by our
current chief executive officer, Donald B. Murray, who was then a senior
partner with Deloitte & Touche. Our other founding members include our current
chief financial officer, Stephen J. Giusto, then also a partner, Karen M.
Ferguson, the current managing director of our New York area practice, and
David L. Schnitt, our former national director of information technology
services. Our founders created Resources Connection to capitalize on the
increasing demand for high-quality, outsourced professional services. We
operated as a division of Deloitte & Touche from our inception in June 1996
until January 1997. From January 1997 until April 1999, we operated as an
independent subsidiary of Deloitte & Touche. During these periods due to
regulatory constraints applicable to us as part of a Big Five accounting firm,
we were unable to provide certain accounting services to audit clients of
Deloitte & Touche. In April 1999, we completed a management-led buyout.
Subsequent to the management-led buyout, we were able to expand the scope of
services we provide to our clients.

Our business model combines the client service orientation and commitment to
quality of a Big Five accounting firm with the entrepreneurial culture of an
innovative, high-growth company. We are positioned to take advantage of what we
believe are two converging trends in the outsourced professional services
industry: increasing demand for outsourced professional services by corporate
clients and increasing supply of professionals interested in working on an
outsourced basis. We believe our business model allows us to offer challenging
yet flexible career opportunities, attract highly qualified, experienced
professionals and, in turn, attract clients.

As of May 31, 2001, we employed more than 1,250 professional service
associates on assignment. Our associates have professional experience in a wide
range of industries and functional areas. Based upon an internal, annual survey
conducted in late calendar year 2000 to which approximately 53% of all active
associates responded, 52% of respondents were CPAs, 35% had MBAs, and the
average years of professional experience was 20. We offer our associates
careers that combine the flexibility of project-based work with many of the
advantages of working for a traditional professional services firm.

We have established a growing and diverse client base of over 1,800 clients,
ranging from large corporations to mid-sized companies to small entrepreneurial
entities, in a broad range of industries. For example, our clients include more
than half of the Fortune 100, which accounted for 10.9% of our revenues in
fiscal 2001, and all of the Big Five accounting firms. We serve our clients
through 41 offices in the United States and four offices abroad. We have grown
revenues internally from $9.3 million in fiscal 1997 to $189.8 million in
fiscal 2001, a four-year CAGR of 112% and our income from operations over the
same period has increased from $869,000 to $25.8 million, a four-year CAGR of
134%. We have been profitable every year since our inception.

We believe our distinctive culture is a valuable asset and is in large part
due to our management team, which has extensive experience in the professional
services industry. Virtually all of our senior management and office directors
have Big Five experience and all of our management has an equity interest in
our company. This team has created a culture of professionalism that we believe
fosters in our associates a feeling of personal responsibility for, and pride
in, client projects and enables us to deliver high-quality service to our
clients.

Industry Background

Increasing Demand for Outsourced Professional Services

According to a study by Staffing Industry Analysts, Inc., the market for
outsourcing of professionals, including information technology, accounting and
finance, technical/engineering, medical and legal professionals, is large and
growing, with revenues estimated to grow from $40.1 billion in 1999 to $58.6
billion in 2002, representing a CAGR of 13.5%. Accounting and finance
professionals, according to the same study, represent one of the fastest
growing segments of this market, with revenues estimated to grow from $7.2
billion in 1999 to $13.6 billion in 2002, representing a CAGR of 23.6%. We
believe, based on discussions with our clients, this growth is driven by the
recognition that by outsourcing professionals companies can:

. strategically access specialized skills and expertise;

. effectively supplement internal resources;

. increase labor flexibility; and

. reduce their overall hiring and training costs.

Typically, companies use a variety of alternatives to fill their project-
based professional services needs. Companies outsource entire projects to
consulting firms, which provides access to the expertise of the firm but often
entails significant cost and less management control of the project. Companies
also supplement their internal resources with employees from the Big Five
accounting firms; however, these arrangements are on an ad hoc basis and have
been increasingly limited by regulatory concerns. Companies use temporary
employees from traditional and Internet-based staffing firms, who may be less
experienced or less qualified than employees of professional services firms.
Finally, some companies rely solely on their own employees who may lack the
requisite time, experience or skills.

Increasing Supply of Project Professionals

Concurrent with the growth in demand for outsourced professional services,
we believe, based on discussions with our associates, that the number of
professionals seeking to work on a project basis has increased due to a desire
for:

. more flexible hours and work arrangements, coupled with competitive
wages and benefits and a professional culture;

. challenging engagements that advance their careers, develop their skills
and add to their experience base; and

. a work environment that provides a diversity of, and more control over,
client engagements.

The employment alternatives historically available to professionals may
fulfill some, but not all, of an individual's career objectives. A professional
working for a Big Five accounting firm or a consulting firm may receive
challenging assignments and training, but may encounter a career path with less
flexible hours and limited control over work engagements. Alternatively, a
professional who works as an independent contractor faces the ongoing task of
sourcing assignments and significant administrative burdens.

Resources Connection Solution

Resources Connection is positioned to capitalize on the confluence of these
industry trends. We believe, based on discussions with our clients, that
Resources Connection provides clients seeking outsourced professionals with
high-quality services because we are able to combine all of the following:

. a relationship-oriented approach to assess our clients' project needs;

. highly qualified professionals with the requisite skills and experience;

. competitive rates on an hourly, instead of a per project, basis; and

. significant client control of their projects.

Resources Connection Strategy

Our Business Strategy

We are dedicated to providing highly qualified and experienced accounting
and finance, human resources management and information technology
professionals to meet our clients' project-based and interim professional
services needs. Our objective is to be the leading provider of these outsourced
professional services. We have developed the following business strategies to
achieve this objective:

. Hire and retain highly qualified, experienced associates. We believe our
highly qualified, experienced associates provide us with a distinct
competitive advantage. Therefore, one of our priorities is to continue
to attract and retain high-caliber associates. We believe we have been
successful in attracting and retaining qualified professionals by
providing challenging work assignments, competitive compensation and
benefits, and continuing education and training opportunities, while
offering flexible work schedules and more control over choosing client
engagements.

. Maintain our distinctive culture. Our corporate culture is central to
our business strategy and we believe has been a significant component of
our success. Our senior management, virtually all of whom are Big Five
alumni, has created a culture that combines the commitment to quality
and the client service focus of a Big Five accounting firm with the
entrepreneurial energy of an innovative, high-growth company. We seek
associates and management with talent, integrity, enthusiasm and loyalty
to strengthen our team and support our ability to provide clients with
high-quality services. We believe that our culture has been instrumental
to our success in hiring and retaining highly qualified associates and,
in turn, attracting clients.

. Build consultative relationships with clients. We emphasize a
relationship-oriented approach to business rather than a transaction- or
assignment-oriented approach. We believe the professional services
experience of our management and associates enables us to understand the
needs of our clients and to deliver an integrated, relationship-oriented
approach to meeting their professional services needs. We regularly meet
with our existing and prospective clients to understand their businesses
and help them define their project needs. Once a project is defined, we
identify associates with the appropriate skills and experience to meet
the client's needs. We believe that by partnering with our clients to
solve their professional services needs, we can generate new
opportunities to serve them. The strength of our client relationships is
demonstrated by the fact that 47 of our top 50 clients in fiscal 2000
remained clients in fiscal 2001.

. Build the Resources Connection brand. Our objective is to establish
Resources Connection as the premier provider of project-based
professional services. Our primary means of building our brand is by
consistently providing high-quality, value-added services to our
clients. We have also focused on building a significant referral network
through our more than 1,250 associates on assignment and 290 management
employees, most of whom have established relationships with a number of
potential clients. In addition, we have ongoing national and local
marketing efforts that reinforce the Resources Connection brand.

Our Growth Strategy

All of our growth since inception has been internal. We believe we have
significant opportunity for continued strong internal growth in our core
business and will evaluate potential strategic acquisitions on a case-by-case
basis. Key elements of our growth strategy include:

. Expanding work from existing clients. A principal component of our
strategy is to secure additional project work from the more than 1,800
clients we served in fiscal 2001. Prior to the management-led buyout, we
were unable to provide certain services to some of our clients due to
regulatory constraints applicable to us as part of a Big Five accounting
firm. Subsequent to the management-led

buyout, we were able to expand the scope of the services we provide to
our clients. We believe, based on discussions with our clients, that the
amount of revenue we currently receive from most of our clients
represents a relatively small percentage of the amount they spend on
outsourced professional services, and that, consistent with industry
trends, they will continue to increase the amount they spend on these
services. We believe that by continuing to deliver high-quality services
and by further developing our relationships with our clients, we will
capture a significantly larger share of our clients' expenditures for
outsourced professional services.

. Growing our client base. We will continue to focus on attracting new
clients. Since fiscal 1999, we increased our client base by more than
600 new clients. We plan to develop new client relationships primarily
by leveraging the significant contact networks of our management and
associates and through referrals from existing clients. In addition, we
believe we will attract new clients by building our brand name and
reputation and through our national and local marketing efforts.

. Expanding geographically. We plan to expand geographically to meet the
demand for outsourced professional services. We expect to add to our
existing domestic office network with new offices strategically located
to meet the needs of our existing clients and to create additional new
client opportunities. We believe that there are also significant
opportunities to grow our business internationally and, consequently, we
intend to expand our international presence on a strategic and
opportunistic basis.

. Providing additional professional services lines. We will continue to
explore, and consider entry into, new professional services lines. Since
fiscal 1999, we have diversified our professional services lines by
entering into the human resources management and the information
technology segments. Our considerations when evaluating new professional
services lines include growth potential, profitability, cross-marketing
opportunities and competition.

Associates

We believe that an important component of our success over the past four
years has been our highly qualified and experienced associates. As of May 31,
2001, we employed over 1,250 associates on assignment. Our associates have
professional experience in a wide range of industries and functional areas. We
provide our associates with challenging work assignments, competitive
compensation and benefits, and continuing education and training opportunities,
while offering flexible work schedules and more control over choosing client
engagements.

Our associates are employees of Resources Connection. We pay each associate
an hourly rate, pay overtime, and offer benefits, including paid vacation and
holidays; referral bonus programs; group health and basic term life insurance
programs, each with an approximate 50% contribution by the associate; a
matching 401(k) retirement plan; and professional development and career
training. Typically, an associate must work a threshold number of hours to be
eligible for all of the benefits. We also have a long-term incentive plan for
our associates, which affords them the opportunity to earn an annual cash bonus
that vests over time. We intend to maintain competitive compensation and
benefit programs.

Clients

We provide our services to a diverse client base in a broad range of
industries. In fiscal 2001, we served over 1,800 clients. Our revenues are not
concentrated with any particular client or clients, or within any particular
industry. In fiscal 2001, no single client accounted for more than 3% of our
revenue and the top 10 clients accounted for approximately 15.4% of our
revenues.

The clients listed below represent the geographic and industry diversity of
our client base in fiscal 2001.

Air BP, a subsidiary of BP Amoco Kaiser Permanente Insurance Company
Allied Waste The LTV Corporation
Aventis Pharmaceuticals Nordstrom
Banc of America Securities LLC PepsiCo Inc.
Blue Shield of California Pharmacia Corporation
CB Richard Ellis Southwest Airlines
Credit Suisse First Boston Corporation Toshiba America Electronic Components, Inc.
Exelon Corporation Toyota Motor Sales, USA, Inc.
Great West Life and Annuity Life Insurance
Company UCLA Medical Center

Services

Our current professional services capabilities include accounting and
finance, human resources management and information technology. In fiscal 2001,
accounting and finance services accounted for a substantial majority of our
revenue. Our engagements are project-based and often last three months or
longer.

Accounting and Finance

Our accounting and finance services include:

Special Projects: Our accounting and finance associates work on a variety of
special projects including:

. financial analyses, such as product costing and margin analyses;

. tax-related projects, such as tax compliance and analysis of tax
liabilities resulting from acquisitions; and

. resolving complex accounting problems, such as large out-of-balance
accounts and unreconciled balances.

Sample Engagement: We provided two associates over a 14-month period to
assist the global operations and finance group of a major bank in
establishing a cash management system that would be used to monitor its
daily cash needs in U.S. dollars and various foreign currencies. Our
associates were responsible for:

. reviewing the daily trades of foreign securities and projecting the
surplus/shortfall for the various currencies resulting from these
trades;

. recommending transfers, purchases of foreign currencies and
borrowings; and

. redesigning and testing systems to accurately report foreign currency
activities.

Mergers and Acquisitions: Our accounting and finance associates have
assisted with the following functions for clients involved in mergers and
acquisitions:

. due diligence work;

. integration of financial reporting and accounting systems; and

. public reporting filings associated with the transaction.

Sample Engagement: We have provided more than 50 associates to assist
with the post-acquisition integration of a multi-billion dollar solid waste
management company. Our services were delivered through 19 of our offices
with coordination provided by one of our offices. We assigned a specially

designated project manager to oversee the delivery of our services, thereby
facilitating project management and client control. Our associates were
responsible for:

. performing controller responsibilities at various sites, including
preparing internal financial statements, closing the general ledger
and managing the accounting staff;

. restructuring the fixed asset reporting system;

. assisting with the transition of financial functions during the
divestiture of solid waste facilities and closing of other
facilities;

. assisting with converting the newly acquired facilities' systems to
the parent's systems; and

. preparing fuel tax returns and related tax schedules.

Finance and Accounting System Implementation and Conversion: When a company
implements a new system, the conversion often entails additional work that
burdens management's time. To address this problem, we provide associates that:

. assist with the finance and accounting issues of system implementations;
and

. maintain daily operations during the implementation and conversion
process in order to minimize disruption to the organization.

Sample Engagement: We provided 15 associates over a 14-month period to
assist one of the world's largest energy groups in converting to a new
proprietary accounting software system through operations worldwide,
developing the relevant required software documentation and relocating its
accounting and commercial services departments between two metropolitan
areas. Our associates were responsible for:

. documenting and preparing a flowchart of the accounting system and
existing business processes, practices and workflows;

. reviewing internal controls and developing an operations manual;

. documenting the new accounting system processes and procedures;

. performing pre- and post-conversion testing;

. hiring and training new employees; and

. designing training programs.

Periodic Accounting and Finance Needs: Our associates help clients with
periodic needs such as:

. interim senior financial management, including controller or accounting
manager tasks;

. monthly/quarterly/year-end closings;

. audit preparation;

. public reporting; and

. budgeting and forecasting.

Sample Engagement: We provided 40 associates over a 19-month period to
assist a multi-unit medical company, currently under reorganization, with a
comprehensive review and clean-up of the company's consolidated balance
sheet in preparation for its year-end audit. Our associates were
responsible for:

. designing a work program and package format to be used by 23
associates in teams across six states;

. completing a detailed review of approximately 180 entities' balance
sheets, compiling documentation, and obtaining support for the
entire trial balance; and

. proposing adjusting entries and recommending subsequent internal
accounting control system and procedure changes.

Assist Start-Ups: We provide accounting and finance professional services to
start-up companies who do not yet have the appropriate management or staff to
support their accounting and finance functions.

Sample Engagement: We have provided two associates over a nine-month
period to assist an Internet incubator that provides services to start-up
companies in setting up its accounting function. Our associates were
responsible for:

. designing a scalable general ledger system to accommodate multiple
entities;

. setting up the accounts payable system for all entities including
check disbursements and wire transfers of funds;

. designing a system for processing semi-monthly payroll;

. developing cash receipts function including the performance of all
treasury functions (collections, deposits, investments); and

. creating a model for projecting cash flows from individual entities.

Human Resources Management

Our human resources management professional services group was formed in
June 1999. These services are currently available in 16 of our offices. Our
human resources management services include:

. development of human resources management procedures, training and
policies;

. compensation program design and implementation;

. interim senior human resources management; and

. assistance in complying with governmental employment regulations.

Sample Engagement: We have provided three associates over a three-month
period to assist a leading provider of business information and related
products and services with a number of projects. Our associates were
responsible for:

. evaluating the existing human resources information system, or HRIS;

. reviewing vendors and implementing a new HRIS system;

. updating human resources policies and procedures to reflect
consistent corporate policies across numerous acquired companies;
and

. evaluating the various retirement benefits for each of the multiple
subsidiaries and acquired companies.

Information Technology

Our information technology professional services group was formed in June
1998. These services are currently available in 15 of our offices. Our
information technology services include:

. providing interim information technology management such as interim
chief technology officers and chief information officers;

. leading systems selection process; and

. assisting with project management of information systems
implementations, conversions and upgrades.

Sample Engagement: We provided an interim chief information officer with
significant foodservice operations/restaurant experience over a 21-month
period to support a rapidly growing chain of upscale restaurants with 106
locations in 22 states. Our associate was responsible for:

. designing technology initiatives;

. establishing and maintaining an information technology department
capable of supporting and delivering technology solutions;

. monitoring and guiding multiple project teams;

. communicating with various business units; and

. prioritizing projects and resources.

Operations

We generally provide our professional services to clients at a local level
through our 41 domestic offices and four international offices, with the
oversight and consultation of our corporate management team located in our
corporate service center. The office director and client service manager in
each office are responsible for initiating client relationships, providing
associates specifically skilled to perform client projects, ensuring client
satisfaction throughout engagements and maintaining client relationships post-
engagement. Throughout this process, the corporate management team is available
to consult with the office director with respect to client services.

Our offices are operated in a decentralized, entrepreneurial manner. Our
office directors are given significant autonomy in the daily operations of
their respective offices, and with respect to such offices, are responsible for
overall guidance and supervision, budgeting and forecasting, sales and
marketing, pricing and hiring. We believe that a substantial portion of the
buying decisions made by our clients are made on a local or regional basis and
that our offices most often compete with other professional services providers
on a local or regional basis. Because our office directors are in the best
position to understand the local and regional outsourced professional services
market and because clients often prefer local providers, we believe that a
decentralized operating environment maximizes operating performance and
contributes to employee and client satisfaction.

We believe that our ability to successfully deliver professional services to
clients is dependent on our office directors working together as a collegial
and collaborative team, at times working jointly on client projects. To build a
sense of team effort and increase camaraderie among our office directors, we
have an incentive program for our office management that awards annual bonuses
based on both the performance of the company and the performance of the
manager's particular office. In addition, each member of our office management
owns equity in our company. We also have a management mentor program whereby
each new office director is trained by an experienced office director, who is
responsible for providing support to the new office director on an ongoing
basis.

From our corporate headquarters in Costa Mesa, California, we provide our
offices with centralized administrative, marketing, finance and legal support.
Our financial reporting is centralized in our corporate service center. This
center also handles billing, accounts payable and accounts receivable, and
administers human resources including employee compensation and benefits. In
addition, we have a corporate networked information technology platform with
centralized financial reporting capabilities and a front office client
management system. These centralized functions minimize the administrative
burdens on our office management and allow them to spend more time focused on
client development.

Business Development

Our business development initiatives are composed of:

. local sales initiatives focused on existing clients and target
companies;

. brand marketing activities; and

. national and local direct mail programs.

Our business development efforts are driven by the networking and sales
efforts of our management. The office director and client service manager in
each of our offices develop a list of targeted potential clients and key
existing clients. They are responsible for initiating and fostering
relationships with the senior management of these companies. These local
efforts are supplemented with national marketing assistance. We have a national
business development director who, with our top executives, assists with major
client opportunities. We believe that these efforts have been effective in
generating incremental revenues from existing clients and developing new client
relationships.

Our brand marketing initiatives help develop Resources Connection's image in
the markets we serve. Our brand is reinforced by our professionally designed
website, brochures and pamphlets, direct mail and advertising materials. We
believe that our branding initiatives coupled with our high-quality client
service differentiate us from our competitors and establish Resources
Connection as a credible and reputable professional services firm.

Our national marketing group develops our direct mail campaigns to focus on
our targeted client and associate populations. These campaigns are intended to
support our branding, sales and marketing, and associate hiring initiatives.

Competition

We operate in a competitive, fragmented market and compete for clients and
associates with a variety of organizations that offer similar services. Our
principal competitors include:

. consulting firms;

. loaned employees of the Big Five accounting firms;

. traditional and Internet-based staffing firms; and

. the in-house resources of our clients.

We compete for clients on the basis of the quality of professionals, the
timely availability of professionals with requisite skills, the scope and price
of services, and the geographic reach of services. We believe that our
attractive value proposition, consisting of our highly qualified associates,
relationship-oriented approach and professional culture, enables us to
differentiate ourselves from our competitors. Although we believe we compete
favorably with our competitors, many of our competitors have significantly
greater financial resources, generate greater revenues and have greater name
recognition than our company.

Employees

As of May 31, 2001, we had a total of 1,573 employees, including 290
corporate and office-level employees and 1,283 professional services
associates. None of our employees is covered by a collective bargaining
agreement.

Facilities

We maintain 41 domestic offices in the following metropolitan areas:

Phoenix, Arizona Boise, Idaho Cincinnati, Ohio
Costa Mesa, California Chicago, Illinois (2 locations) Cleveland, Ohio
Los Angeles, California Indianapolis, Indiana Portland, Oregon
Santa Clara, California Boston, Massachusetts Philadelphia, Pennsylvania
San Diego, California Baltimore, Maryland Pittsburgh, Pennsylvania
San Francisco, California Detroit, Michigan Austin, Texas
Denver, Colorado Minneapolis, Minnesota Dallas, Texas
Hartford, Connecticut St. Louis, Missouri Fort Worth, Texas
Stamford, Connecticut Las Vegas, Nevada Houston, Texas (2 locations)
Orlando, Florida Parsippany, New Jersey San Antonio, Texas
Tampa, Florida Princeton, New Jersey Seattle, Washington
Atlanta, Georgia New York, New York Milwaukee, Wisconsin
Honolulu, Hawaii Charlotte, North Carolina Washington, D.C.

Our corporate offices are located in the Costa Mesa, California office in a
16,366 square foot facility under a lease expiring in June 2007. We maintain
four international offices: Toronto, Canada; London, England; Taipei, Taiwan;
and Hong Kong, People's Republic of China.

Legal Proceedings

We are not currently subject to any material legal proceedings; however, we
may from time to time become a party to various legal proceedings arising in
the ordinary course of our business.

MANAGEMENT

Executive Officers and Directors

The following table sets forth information about our executive officers and
directors as of June 30, 2001:

Name Age Position
---- --- --------

Donald B. Murray........ 54 Chairman of the Board of Directors, Chief
Executive Officer, President and Director
Stephen J. Giusto....... 38 Chief Financial Officer, Executive Vice President
of Corporate Development, Secretary and Director
Karen M. Ferguson....... 37 Executive Vice President and Director
Brent M. Longnecker..... 45 Executive Vice President
John D. Bower........... 40 Vice President, Finance
Kate W. Duchene......... 37 Chief Legal Officer, Executive Vice President of
Human Relations and Assistant Secretary
David G. Offensend...... 48 Director
Gerald Rosenfeld........ 54 Director
Leonard Schutzman....... 54 Director
John C. Shaw............ 67 Director
C. Stephen Mansfield.... 61 Director

Donald B. Murray. Mr. Murray co-founded Resources Connection in June 1996
and served as our Managing Director from inception until April 1999. Mr.
Murray has served as our Chairman, Chief Executive Officer and President since
the management buyout in April 1999. Prior to founding Resources Connection,
Mr. Murray was Partner-In-Charge of Accounting and Assurance Services for the
Orange County, California office of Deloitte & Touche, a professional services
firm, from 1988 to 1996. From 1984 to 1987, Mr. Murray was the Partner-In-
Charge of the Woodland Hills office of Touche Ross & Co., a predecessor firm
to Deloitte & Touche, a professional services firm, an office he founded in
1984. Mr. Murray was admitted to the Deloitte & Touche partnership in 1983.
Mr. Murray also serves on the board of Ledgent, Inc.

Stephen J. Giusto. Mr. Giusto co-founded Resources Connection in June 1996
and served as our National Director of Operations from inception until April
1999. Mr. Giusto has served as our Chief Financial Officer, Executive Vice
President of Corporate Development and Secretary since April 1999. Mr. Giusto
is also a director of Resources Connection, a position he has held since April
1999. Prior to founding Resources Connection, Mr. Giusto was in the Orange
County real estate practice of Deloitte & Touche, a professional services
firm, from 1992 to 1996. He also previously served for two years in the
Deloitte & Touche national office in the Office of the Managing Partner. Mr.
Giusto was admitted to the Deloitte & Touche partnership in 1996.

Karen M. Ferguson. Ms. Ferguson co-founded Resources Connection in June
1996. From inception to August 1998, Ms. Ferguson served as Managing Director
of our Northern California practice. She currently serves as the Managing
Director of our New York area practice and as an Executive Vice President,
positions she has held since August 1998 and April 1999, respectively. Ms.
Ferguson is also a director of Resources Connection, a position she has held
since April 1999. Prior to joining us, Ms. Ferguson was a director with
Accounting Solutions, a regional Northern California contract staffing firm
from 1994 to 1995. From 1985 to 1994 Ms. Ferguson was in the San Francisco
office of Deloitte & Touche, a professional services firm, most recently as a
Senior Manager.

Brent M. Longnecker. Mr. Longnecker is as an Executive Vice President of
Resources Connection, a position he has held since June 1999. From 1985 to
1999, Mr. Longnecker held various positions at KPMG and Deloitte & Touche,
both of which are professional services firms, most recently as Partner-In-
Charge of the performance management and compensation consulting practices at
Deloitte & Touche. Mr. Longnecker also serves on the faculty of Certified
Professional Education, Inc. and as a director of the Strategy Factory, Inc.
and SkyAuction.com, Inc.

John D. Bower. Mr. Bower is our Vice President, Finance, a position he has
held since April 1999. Mr. Bower served as our Director of Financial Reporting
and Controller from January 1998 to April 1999. Mr. Bower served as Vice
President, Finance of Mossimo, Inc., a clothing manufacturing company, from
January 1997 to November 1997 and as Director, Finance for FHP International
Corporation, a health maintenance organization, from June 1992 to January 1997.
From 1982 through 1992, Mr. Bower worked in the Orange County, California
office of Deloitte & Touche, a professional services firm, most recently as a
Senior Manager.

Kate W. Duchene. Ms. Duchene is our Chief Legal Officer, a position she has
held since December 1999. Ms. Duchene is also our Assistant Secretary and
Executive Vice President, Human Relations, positions she has held since August
2000. Prior to joining Resources Connection, Ms. Duchene practiced law with
O'Melveny & Myers LLP, a law firm, in Los Angeles, California, specializing in
labor and employment matters. Ms. Duchene was with O'Melveny & Myers LLP from
October 1990 through December 1999, most recently as a Special Counsel.

David G. Offensend. Mr. Offensend is a director of Resources Connection, a
position he has held since April 1999. Mr. Offensend is the Vice Chairman of
Evercore Partners and a managing member of the general partner of Evercore
Capital Partners L.P. Prior to founding Evercore Partners in 1995,
Mr. Offensend was Vice President of Keystone Inc., the investment organization
of Robert M. Bass. Prior to joining Keystone in 1990, Mr. Offensend was a
Managing Director of Lehman Brothers, an investment bank, where he was
President and Chief Executive Officer of the Lehman Brothers Merchant Banking
Partnerships. Mr. Offensend is also a director of Specialty Products &
Insulation Co.

Gerald Rosenfeld. Mr. Rosenfeld is a director of Resources Connection, a
position he has held since April 1999. Mr. Rosenfeld is the Chief Executive
Officer of Rothschild North America, an investment banking firm, a position he
has held since January 2000. Previously, from November 1998 to January 2000, he
was the Managing Member of G. Rosenfeld & Co. LLC, an investment banking and
consulting firm. Prior to that time, Mr. Rosenfeld was Senior Managing Director
of NationsBanc Montgomery Securities LLC, an investment banking firm, from
April to November 1998, and a Managing Director and head of Investment Banking
of Lazard Freres & Co. LLC, an investment banking firm, from 1992 to 1998. Mr.
Rosenfeld is also a director of ContiGroup, Inc.

Leonard Schutzman. Mr. Schutzman is a director of Resources Connection, a
position he has held since April 1999. From April 1999 to November 1999, Mr.
Schutzman was a member of Venture Marketing Group LLC, a venture marketing
firm. From 1976 to 1993, he held several positions at Pepsi-Co., Inc., a
company involved in the snack food, soft drink and juice businesses, most
recently as Senior Vice President and Treasurer. Mr. Schutzman also serves on
the board of directors of BML Pharmaceutical, Inc., SkyAuction.com, Inc. and
TwinLab and currently serves as Chairman of the Board of INNX, Inc. He is a
member of the board of advisors of Evercore Capital Partners LLP.

John C. Shaw. Mr. Shaw is a director of Resources Connection, a position he
has held since June 1999. Mr. Shaw currently also serves as a partner of The
Shaw Group LLC, a general management and consulting company he founded in
February 1997. From February 1997 to December 1999, Mr. Shaw served as the Dean
of the Peter F. Drucker Graduate School of Management at Claremont Graduate
University. In addition, from November 1994 to February 1997, Mr. Shaw served
in the Office of the Chairman of Wellpoint Health Networks, Inc., a managed
health care company.

C. Stephen Mansfield. Mr. Mansfield is a director of Resources Connection, a
position he has held since August 2000. Mr. Mansfield is a lecturer at
California Polytechnic State University, San Luis Obispo, a position he has
held since 1999. From 1983 to 1989, Mr. Mansfield was the Partner-In-Charge of
the Orange County office of Deloitte, Haskins & Sells, a professional services
firm which was a predecessor firm to Deloitte & Touche. Mr. Mansfield retired
from Deloitte & Touche LLP in 1990, as a senior partner.

Board Composition

In accordance with the terms of our second restated certificate of
incorporation, the terms of office of our board of directors are divided into
three classes:

. Class I directors, whose term will expire at the annual meeting of
stockholders to be held in 2001;

. Class II directors, whose term will expire at the annual meeting of
stockholders to be held in 2002; and

. Class III directors, whose term will expire at the annual meeting of
stockholders to be held in 2003.

Our Class I directors are Ms. Ferguson, Mr. Mansfield and Mr. Schutzman, our
Class II directors are Mr. Giusto and Mr. Shaw, and our Class III directors are
Mr. Murray, Mr. Offensend and Mr. Rosenfeld. At each annual meeting of
stockholders, the successors to directors whose terms will then expire will be
elected to serve from the time of election and qualification until the third
annual meeting following election. Any additional directorships resulting from
an increase in the number of directors will be distributed among the three
classes so that, as nearly as possible, each class will consist of one-third of
the directors. This classification of our board of directors may have the
effect of delaying or preventing changes in control or management of our
company. Pursuant to a stockholders agreement between the company and certain
entities affiliated with the Evercore Partners, Donald B. Murray, Stephen J.
Giusto, Karen M. Ferguson and Brent M. Longnecker, the company has agreed to
nominate, and the stockholders party to that agreement have agreed to vote
their shares in favor of, board nominees designated by the Evercore Partners
and the management stockholders. After this offering, the Evercore Partners
will have the right to designate one director nominee to our board of
directors.

Board Committees

Our board of directors has established an audit committee. The audit
committee consists of Mr. Mansfield, Mr. Rosenfeld and Mr. Shaw. The audit
committee, which is composed solely of independent directors, makes
recommendations to our board of directors regarding the selection of
independent auditors, reviews the results and scope of the audit and other
services provided by our independent auditors, and reviews and evaluates our
audit and control functions.

Our board of directors has established a compensation committee consisting
of the following directors: Mr. Offensend, Mr. Rosenfeld and Mr. Shaw. The
compensation committee oversees our equity compensation plans and makes
decisions concerning salaries and incentive compensation for our employees and
consultants.

Compensation Committee Interlocks and Insider Participation

None of the members of the compensation committee of our board of directors
is an officer or employee of our company. No executive officer of our company
serves as a member of the board of directors or compensation committee of any
entity that has one or more executive officers serving on our compensation
committee.

Director Compensation

As compensation for their services on our board of directors, our non-
employee directors receive:

. $12,000 per year to be paid in cash or discounted stock options;

. a one-time grant of 5,000 shares at the time a director joins the board;

. discretionary stock option grants; and

. reimbursement for expenses they incur in attending board and committee
meetings.

Directors who serve on committees receive a flat fee of $300 per committee
meeting attended as well.

Executive Compensation

Summary of Compensation

The following table sets forth summary information concerning compensation
awarded to, earned by, or accrued for services rendered to us in all capacities
during fiscal 2000 and fiscal 2001 by our Chief Executive Officer and the four
other most highly compensated officers whose total salary and bonuses exceeded
$100,000 in fiscal 2001. The individuals listed in the table below are
collectively referred to as the named executive officers.

Summary Compensation Table

Long-Term
Compensation
Annual Compensation Awards
--------------------------------------- ------------
All Other Securities
Name and Principal Annual Underlying
Position Year Salary($) Bonus($) Compensation($) Options(#)
------------------ ---- --------- -------- --------------- ------------

Donald B. Murray, Chief
Executive Officer...... 2001 447,665(4) 300,518(1) 0 40,000
2000 425,000 212,500(2) 0 0

Stephen J. Giusto, Chief
Financial Officer...... 2001 267,038(4) 136,404(1) 0 20,000
2000 250,000 125,000(2) 0 0

Karen M. Ferguson,
Executive Vice
President.............. 2001 259,023(4) 136,404(1) 1,118(5) 20,000
2000 200,000 130,000(3) 0 0

Brent M. Longnecker,
Executive Vice
President.............. 2001 318,646(4) 156,600(1) 0 20,000
2000 300,000 150,000(2) 50,000(6) 0

Kate W. Duchene, Chief
Legal Officer.......... 2001 174,423 79,335(1) 0 20,000
2000 86,538 27,800(2) 0 50,000

--------
(1) Consists of bonuses earned in fiscal 2001 and paid in fiscal 2002.

(2) Consists of bonuses earned in fiscal 2000 and paid in fiscal 2001.

(3) Consists of bonuses earned in fiscal 2000 and paid in part in fiscal 2000
and in part in fiscal 2001.

(4) Includes an automobile allowance of $9,000.

(5) Consists of a matching contribution under the terms of Resources' defined
contribution 401(k) plan.

(6) In May 1999, Mr. Longnecker received a loan in the amount of $200,000 from
the company. On January 1, 2000, Resources Connection forgave $50,000 of
the loan.

Stock Options and Long-Term Incentive Awards in Fiscal 2001

The table below sets forth the options granted to named executive officers
during fiscal 2001. No restricted stock awards were granted to named executive
officers in fiscal 2001.

Individual Grants Potential Realizable
----------------------------------------------- Value at Assumed
% of Total Annual Rate of
Number of Options Stock Price
Securities Granted to Appreciation for
Underlying Employees Exercise Price Option Term
Options in Fiscal per Share Expiration ---------------------
Granted 2001 ($/Share) Date 5%($) 10%($)
---------- ---------- -------------- ---------- --------- -----------

Donald B. Murray........ 40,000 2.35% 17.63 1/10/11 443,600 1,124,000
Stephen J. Giusto....... 20,000 1.17% 17.63 1/10/11 221,800 562,000
Karen M. Ferguson....... 20,000 1.17% 17.63 1/10/11 221,800 562,000
Brent M. Longnecker..... 20,000 1.17% 17.63 1/10/11 221,800 562,000
Kate W. Duchene......... 20,000 1.17% 17.63 1/10/11 221,800 562,000

Each option vests in equal annual installments over the four-year period
commencing on the grant date and has a maximum term of 10 years, subject to
earlier termination upon the optionee's cessation of service with Resources
Connection.

The potential realizable values are based on an assumption that the stock
price of our common stock will appreciate at the annual rate shown (compounded
annually) from the date of grant until the end of the option term. These values
do not take into account amounts required to be paid as income taxes under the
Internal Revenue Code and any applicable state laws or option provisions
providing for termination of an option following termination of employment,
non-transferability or vesting. These amounts are calculated based on the
requirements promulgated by the Securities and Exchange Commission and do not
reflect our estimate of future stock price growth of the shares of our common
stock.

Exercise of Options And Year-End Values

No stock options have been exercised by any named executive officer since
our inception. The following table provides summary information of the number
of shares of our common stock represented by outstanding stock options held by
each of our named executive officers as of May 31, 2001.

Aggregated Option Exercises In Last Fiscal Year and
Fiscal Year-End Option Value

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at May 31,
Options at May 31, 2001 2001
Shares Acquired Value ------------------------- -------------------------------
on Exercise Realized Exercisable Unexercisable Exercisable($) Unexercisable($)
--------------- -------- ----------- ------------- -------------- ----------------

Donald B. Murray........ -- -- -- 40,000 -- 626,800
Stephen J. Giusto....... -- -- -- 20,000 -- 313,400
Karen M. Ferguson....... -- -- -- 20,000 -- 313,400
Brent M. Longnecker..... -- -- -- 20,000 -- 313,400
Kate W. Duchene......... -- -- 12,500 57,500 378,750 1,449,650

Dollar values in the table shown above are calculated by taking the fair
market value of our common stock on May 25, 2001 (the last trading day prior to
our fiscal year end), subtracting the per share exercise price of the options,
and multiplying the result by the number of shares.

Employee Benefit Plans

1998 Employee Stock Purchase Plan

In December 1998, we adopted the Resources Connection, Inc. 1998 Employee
Stock Purchase Plan, or the 1998 Employee Stock Purchase Plan, to provide an
additional means to attract, motivate, reward and retain officers and
management-level employees. The plan gives the administrator the authority to
grant awards to select participants. We do not, however, anticipate granting
any additional awards under the 1998 Employee Stock Purchase Plan. The
following summary is qualified by reference to the complete plan, which was
filed as an exhibit to our Registration Statement on Form S-1 filed with the
Securities and Exchange Commission on September 1, 2000.

Share Limits. A total of 5,630,000 shares of our common stock may be issued
under the plan (not including shares that are repurchased by us which upon
repurchase become again available for issuance). This share limit and the
number of shares subject to each award under the plan is subject to adjustment
for certain changes in our capital structure, reorganizations and other
extraordinary events.

Awards. An award under the plan gives the participant the right to acquire a
specified number of shares of our common stock, at a specified price, for a
limited period of time. Officers and management-level employees of Resources
Connection, Inc. may be selected to receive awards under the plan. The purchase
price for each share of stock acquired under the plan must be at least 85%
(100% in the case of an owner of 10% or more of the voting stock of Resources
Connection, Inc.) of the fair market value of the stock on the date the related
award was granted. Awards under the plan generally are nontransferable. The
stock purchased on exercise of an award generally will be subject to a vesting
schedule--20% of the shares of stock purchased on exercise of the award
generally will vest each year following the exercise of the award and the
shares will fully vest on the fifth anniversary of the participant's hire date
with Resources Connection. If the participant's employment terminates before
his or her stock is fully vested, we generally may repurchase the unvested
stock for the price that participant paid to acquire the stock. The
administrator may accelerate the vesting of stock acquired under the plan in
the event of a change in control.

Administration. A committee of one or more directors appointed by the board
will administer the plan. The administrator of the plan has broad authority to
approve awards and determine the specific terms and conditions of awards, and
construe and interpret the plan. Our board of directors may amend, suspend or
discontinue the plan at any time. Plan amendments will generally not be
submitted to stockholders for their approval unless applicable law requires
such approval.

Certain Specific Awards. As of June 30, 2001, 5,630,000 shares had been
acquired under the plan, of which 3,156,693 had become vested, 1,574,350 were
not yet vested, 483,557 had been sold and 367,720 were fully vested and held by
terminated employees and 47,680 shares had been repurchased from terminated
employees and were held as treasury shares. No shares were subject to
outstanding but unexercised awards, and no shares remained available for award
purposes under the plan.

1999 Long-Term Incentive Plan

In June 1999, our board of directors adopted the 1999 Long-Term Incentive
Plan to provide an additional means to attract, motivate, reward and retain key
personnel. Our stockholders approved the plan on June 17, 1999. The plan gives
our board of directors, or a committee appointed by our board of directors, the
authority to determine who may participate in the plan and to grant different
types of stock incentive awards. Employees, officers, directors, and
consultants of Resources Connection or one of our subsidiaries may be selected
to receive awards under the plan. The following summary is qualified by
reference to the complete plan, which was filed as an exhibit to our
Registration Statement on Form S-1 filed with the Securities and Exchange
Commission on September 1, 2000.

Share Limits. We initially reserved a total of 2,340,000 shares of our
common stock for issuance under the plan. In August 2000, we increased this
number to 5,040,000 shares. The aggregate number of shares subject to stock
options and stock appreciation rights granted under the plan to any one person
in a calendar year cannot exceed 200,000 shares.

Awards. Awards under the plan may be in the form of nonqualified stock
options, incentive stock options, stock appreciation rights, or SARs, limited
stock appreciation rights or SARs limited to specific events, such as in a
change in control or other special circumstances, restricted stock, performance
share awards, or stock bonuses. Awards under the plan generally will be
nontransferable.

Nonqualified stock options and other awards may be granted at prices below
the fair market value of the common stock on the date of grant. Restricted
stock awards can be issued for nominal or the minimum lawful consideration.
Incentive stock options must have an exercise price that is at least equal to
the fair market value of the common stock, or 110% of fair market value of the
common stock for any 10% owners of our common stock, on the date of grant.
These and other awards may also be issued solely or in part for services.

Administration. Our board of directors, or a committee of directors
appointed by the board, has the authority to administer the plan. The
administrator of the plan has broad authority to:

. designate recipients of awards;

. determine or modify, subject to any required consent, the terms and
provisions of awards, including the price, vesting provisions, terms of
exercise and expiration dates;

. approve the form of award agreements;

. determine specific objectives and performance criteria with respect to
performance awards;

. construe and interpret the plan; and

. reprice, accelerate and extend the exercisability or term, and establish
the events of termination or reversion of outstanding awards.

Change in Control. Upon a change in control event, the compensation
committee may provide that each option and stock appreciation right will become
immediately vested and exercisable, each award of restricted stock will
immediately vest free of restrictions, and each performance share award will
become payable to the holder of the award. Generally speaking, a change in
control event will be triggered under the plan:

. upon stockholder approval of our dissolution or liquidation;

. upon stockholder approval of the sale of all or substantially all of our
assets to an entity that is not an affiliate; or

. upon stockholder approval of a merger, consolidation, reorganization, or
sale of all or substantially all of our assets in which any person
becomes the beneficial owner of 50% or more of our outstanding common
stock.

Plan Amendment, Termination and Term. Our board of directors may amend,
suspend or discontinue the plan at any time, but no such action will affect any
outstanding award in any manner materially adverse to a participant without the
consent of the participant. Plan amendments will be submitted to stockholders
for their approval as required by applicable law.

The plan will terminate on June 16, 2009; however, the committee will retain
its authority until all outstanding awards are exercised or terminated. The
maximum term of options, SARs and other rights to acquire common stock under
the plan is ten years after the initial date of the award, subject to
provisions for further deferred payment in certain circumstances.

Payment for Shares. The exercise price of options or other awards may
generally be paid in cash or, subject to certain restrictions, shares of our
common stock. Subject to any applicable limits, we may finance or offset shares
to cover any minimum withholding taxes due in connection with an award.

Federal Tax Consequences. The current federal income tax consequences of
awards authorized under the plan follow certain basic patterns. Generally,
awards under the plan that are includable in the income of the recipient at the
time of exercise, vesting or payment (such as nonqualified stock options, stock
appreciation rights, restricted stock and performance awards), are deductible
by Resources Connection, and awards that are not required to be included in the
income of the recipient (such as incentive stock options) are not deductible by
Resources Connection.

Generally speaking, Section 162(m) of the Internal Revenue Code provides
that a public company may not deduct compensation (except for certain
compensation that is commission or performance-based) paid to its chief
executive officer or to any of its four other highest compensated officers to
the extent that the compensation paid to such person exceeds $1,000,000 in a
tax year. The regulations exclude from these limits compensation that is paid
pursuant to a plan in effect prior to the time that a company is publicly held.
We expect that compensation paid under the plan will not be subject to Section
162(m) in reliance on this transition rule, as long as such compensation is
paid (or stock options, stock appreciation rights, and/or restricted stock
awards are granted) before the earlier of a material amendment to the plan or
the annual stockholders meeting in the year 2004.

In addition, we may not be able to deduct certain compensation attributable
to the acceleration of payment and/or vesting of awards in connection with a
change in control event should that compensation exceed certain threshold
limits under Section 280G of the Internal Revenue Code of 1986, as amended, or
the Internal Revenue Code.

Certain Specific Awards. As of June 30, 2001, 3,210,445 shares of common
stock were subject to outstanding options granted under the plan, 442,820 of
which had vested and 2,767,625 of which were unvested, and 1,686,950 shares of
common stock remained available for grant purposes under the plan. The
outstanding options were granted for 10-year terms and at exercise prices
between $3.00 and $23.78 per share. The shares covered by currently outstanding
options represent the 10-year stock option grants authorized by our board of
directors on June 17, 1999.

Employee Stock Purchase Plan

On October 17, 2000, our board of directors adopted our Employee Stock
Purchase Plan to provide certain of our employees (and the employees of certain
of our participating subsidiaries) with an incentive to advance the best
interests of the company by providing a method whereby they may voluntarily
purchase our common stock at a favorable price and upon favorable terms. Our
stockholders approved this plan on October 17, 2000. Generally, all of our
officers and employees who have been employed by us for at least 90 days, who
are regularly scheduled to work more than 10 hours per week, and who are
customarily employed more than five months per year are eligible to participate
in the plan. The plan became effective upon the consummation of our initial
public offering.

Operation. The plan generally operates in successive six-month periods, or
offering periods, commencing on each January 1 and July 1. The first offering
period under the plan commenced on March 19, 2001.

On the first day of each offering period, or grant date, each employee
eligible to participate in the plan who has timely filed a valid election to
participate for that offering period will be granted an option to purchase
shares of our common stock. A participant must designate in his or her election
the percentage of his or her compensation (subject to certain limits in the
plan and limits under the Internal Revenue Code) to be withheld from his or her
pay during that offering period on an after-tax basis and credited to a
bookkeeping account maintained under the plan in his or her name.

Each option granted with respect to an offering period will automatically be
exercised on the last day of that offering period, or the exercise date. The
number of shares of our common stock acquired by the holder of the option will
be determined by dividing the participant's plan account balance as of the
exercise date by the option price.

Generally, a participant's plan participation will terminate during an
offering period, and his or her plan account balance will be paid to him or her
in cash, if the participant elects a withdrawal of his of her contributions or
if the participant's employment by us or one of our participating subsidiaries
terminates.

Authorized Shares; Limits on Contributions. The maximum aggregate number of
shares of our common stock available under the plan is 1,200,000. As required
by the Internal Revenue Code, a participant cannot purchase more than $25,000
of stock (valued at the start of the applicable offering period) under the plan
in any one calendar year. In the event of a merger, consolidation,
recapitalization, stock split, stock dividend, combination of shares, or other
change affecting our common stock, a proportionate and equitable adjustment
will be made to the number of shares subject to the plan and outstanding plan
options.

Administration. The plan will be administered by our board of directors or a
committee appointed by our board of directors. The plan administrator is
currently the compensation committee of our board of directors. The plan will
not limit the authority of our board of directors or the compensation committee
to grant awards or authorize any other compensation, with or without reference
to our common stock, under any other plan or authority.

Amendment or Termination of the Employee Stock Purchase Plan. Our board of
directors may amend, modify or terminate the plan at any time and in any
manner, provided that the existing rights of participants are not materially
adversely affected thereby. Stockholder approval for any amendment will only be
required to the extent necessary to meet the requirements of Section 423 of the
Internal Revenue Code or to the extent otherwise required by law. Unless
previously terminated by our board of directors, no new offering periods will
commence on or after October 16, 2010 or, if earlier, when no shares remain
available for options under the plan.

Federal Tax Consequences. Participant contributions to the plan are made on
an after-tax basis. Generally, no taxable income will be recognized by a
participant as of either the grant date or the exercise date of an option. A
participant will generally recognize income (or loss) upon a sale or
disposition of the shares acquired under the plan. The company generally will
not be entitled to a federal income tax deduction with respect to any shares
that are acquired under the Employee Stock Purchase Plan.

401(k) Plan

Resources Connection has a defined contribution 401(k) plan that covers all
employees who have completed three months of service and are age 21 or older.
Participants may contribute up to 15% of their annual salary or the maximum
allowed by statute. As defined in the plan agreement, the company may make
matching contributions in such amount, if any, up to 6% of employees' annual
salaries. We may, at our sole discretion, determine the matching contribution
made from year to year. To receive a matching contribution, an employee must be
employed by us on the last day of the fiscal year.

Employment Agreements

We have entered into employment agreements with Mr. Murray, Mr. Giusto, Ms.
Ferguson and Mr. Longnecker. Certain aspects of these employment agreements are
specific to the agreement:

Mr. Murray. Pursuant to his employment agreement, Mr. Murray serves as our
Chief Executive Officer and receives an annual base salary of $442,000,
increased in September 2000 from an initial annual base salary of $425,000. The
employment agreement has an initial term ending on March 31, 2004. If any
payment Mr. Murray receives pursuant to his employment agreement is deemed to
constitute "excess parachute payment" under

Section 280G of the Internal Revenue Code, or compensation subject to excise
tax under Section 4999 of the Internal Revenue Code, Mr. Murray is entitled to
an excise tax gross-up payment not to exceed $1.0 million.

Mr. Giusto. Pursuant to his employment agreement, Mr. Giusto serves as our
Chief Financial Officer and receives an annual base salary of $260,000,
increased in September 2000 from an initial annual base salary of $250,000. The
employment agreement has an initial term ending on March 31, 2002.

Ms. Ferguson. Pursuant to her employment agreement, Ms. Ferguson serves as
an Executive Vice President and receives an annual base salary of $250,000,
increased in June 2000 from an initial annual base salary of $200,000. The
employment agreement has an initial term ending on March 31, 2002. If Ms.
Ferguson is terminated without cause, in addition to the severance payment
described below, she will also receive reimbursement for her relocation
expenses up to $100,000.

Mr. Longnecker. Pursuant to his employment agreement, Mr. Longnecker serves
as an Executive Vice President and receives an annual base salary of $312,000,
increased in September 2000 from an initial annual base salary of $300,000. The
employment agreement has an initial term ending on April 30, 2002. If any
payment Mr. Longnecker receives pursuant to his employment agreement is deemed
to constitute "excess parachute payment" under Section 280G of the Internal
Revenue Code, Mr. Longnecker is entitled to an excise tax gross-up payment not
to exceed $750,000. Pursuant to his employment agreement, on May 1, 1999, we
loaned $200,000 to Mr. Longnecker as further described in "Related-Party
Transactions".

Each of the above-described employment agreements has the following uniform
terms:

Automatic Renewal. Upon termination of the initial term of the employment
agreement, the agreement will automatically renew for one-year periods unless
the employee or we elect not to extend the agreement.

Termination by Us Without Cause or by Employee for Good Reason. In the event
we do not renew the agreement or the employee is terminated other than for
"cause" (which is defined in the agreement to include, among other things,
conviction of a felony, fraudulent conduct, failure to perform duties or
observe covenants of the agreement, or theft) or if the employee terminates his
or her employment for "good reason" (which is defined in the agreement to
include, among other reasons, a change in control) the employee will receive
severance pay which includes:

. any accrued but unpaid base salary as of the date of the employee's
termination;

. the earned but unpaid annual bonus, if any;

. the target annual incentive compensation, if any, that the employee
would have been entitled to receive pursuant to the employment agreement
in respect of the fiscal year in which the termination occurs; and

. the employee's then current base salary multiplied by the greater of
either (1) two, for Mr. Giusto and Ms. Ferguson, or three, for Mr.
Murray and Mr. Longnecker, and (2) the number of years (including
fractions) remaining in the initial term of the agreement.

The employment agreements also provide that the employee shall be entitled
to receive employee benefits to which the employee may be entitled under the
employee benefit plans and continued participation in our group health
insurance plans at our expense until the earlier of three years from the date
of termination or the employee's eligibility for participation in the group
health plan of a subsequent employer.

Indemnification of Directors and Executive Officers and Limitation on Liability

Our amended and restated bylaws provide that we shall indemnify our
directors and officers and may indemnify our other employees and agents to the
fullest extent permitted by Delaware law, except with respect to proceedings
initiated by these persons. We are also empowered under our bylaws to enter
into

indemnification contracts with our directors and officers and to purchase
insurance on behalf of any person we are required or permitted to indemnify.

In addition, our amended and restated bylaws provide that our directors will
not be personally liable to us or our stockholders for monetary damages for any
breach of fiduciary duty as a director, except for liability:

. for any breach of the director's duty of loyalty to us or its
stockholders;

. for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;

. under Section 174 of the Delaware General Corporation Law; or

. for any transaction from which the director derives an improper personal
benefit.

RELATED-PARTY TRANSACTIONS

The following is a description of transactions:

. to which we have been a party during the last three years;

. in which the amount involved exceeds $60,000; and

. in which any director, executive officer or holder of more than 5% of
our capital stock had or will have a direct or indirect material
interest.

You should also review certain arrangements with our executive officers that
are described under "Management".

Registration Rights and Board Representation of Evercore and Management

Under a stockholders agreement entered into prior to our initial public
offering, certain entities affiliated with Evercore Partners L.L.C., or the
Evercore Partners, have agreed to vote their shares in favor of board nominees
designated by some of our management stockholders--Donald B. Murray, Stephen J.
Giusto, Karen M. Ferguson and Brent M. Longnecker-- and these management
stockholders have agreed to vote their shares in favor of board nominees
designated by the Evercore Partners. Collectively, the Evercore Partners and
the management stockholders have designated five of our nine current directors.
As the Evercore Partners' percentage ownership in the company decreases, so
does the number of nominees they can designate to the board. As the management
stockholders' percentage ownership in the company decreases, so does the number
of director nominees they can designate to the board. The rights of either the
Evercore Partners or the management stockholders will terminate when that group
owns less than 7.5% of the outstanding shares of common stock of the company.
The company has agreed to take such action as may be required to cause the
board to consist of the number of directors specified in the Stockholders
Agreement. After the consummation of this offering, the Evercore Partners will
own approximately 13.5% of the outstanding shares of our common stock. The
Evercore Partners will therefore have the right to designate one director
nominee to our board of directors.

Pursuant to the Stockholders Agreement, the Evercore Partners and the
management stockholders each have the right to demand that the company register
their shares of common stock of the company two additional times; provided that
the board of directors of the company has the right to postpone a demand
registration in certain circumstances. The company has agreed to pay for two
demand registrations of each of the Evercore Partners and the management
stockholders. This offering is made pursuant to one of the three original
demand registrations and we will pay certain costs associated with this
offering.

In addition, if we propose to register additional shares of our common stock
under the Securities Act, the Evercore Partners, Richard Gersten, Paul
Lattanzio, Gerald Rosenfeld, Mainz Holdings Ltd., DB Capital Investors, L.P.,
certain management stockholders and certain employee stockholders are entitled
to notice of the registration and to include a pro rata number of their shares
of our common stock in that offering. The underwriters have the right to limit
the number of shares included in the registration in their discretion.

Immediately after this offering, the following directors, executive officers
and holders of 5% or more of our outstanding shares will have registration
rights with respect to the shares identified below:

Number of Registrable Shares
Name of Common Stock
---- ----------------------------

Donald B. Murray.............................. 1,385,083
Stephen J. Giusto............................. 354,956
Karen Ferguson................................ 300,250
Brent Longnecker.............................. 185,994
John Bower.................................... 4,690
Gerald Rosenfeld.............................. 136,882
Entities affiliated with Evercore Capital
Partners L.L.C............................... 2,835,580

Longnecker Loan

Pursuant to our employment agreement with Mr. Longnecker, on May 1, 1999, we
loaned $200,000 to Mr. Longnecker. The loan is interest-free and matures on
April 1, 2007. On January 1, 2000, $50,000 of the loan was forgiven as a
portion of Mr. Longnecker's compensation. As of May 31, 2001, the outstanding
balance of the loan was $150,000. Additional amounts may be forgiven at the
discretion of our chief executive officer. If Mr. Longnecker is terminated for
cause, as defined in his employment agreement, or terminates his employment
without good reason, as defined in his employment agreement, all remaining loan
amounts owed will be due and payable.

Sale of Shares Pursuant to the 1998 Employee Stock Purchase Plan

In November 1998, we formed RC Transaction Corp., renamed Resources
Connection, Inc. In December 1998, we issued 5,243,000 shares of our common
stock pursuant to the 1998 Employee Stock Purchase Plan to certain members of
our management for an aggregate purchase price of $52,430. Between January and
February 1999, we issued and sold the remaining 387,000 shares of our common
stock to certain members of our management for an aggregate purchase price of
$3,870. Directors and officers who participated in these transactions include:

Number of Shares
of Common Stock
Name Acquired
---- ----------------

Donald B. Murray ........................................... 1,450,600
Stephen J. Giusto........................................... 400,000
Karen M. Ferguson........................................... 355,000
Brent M. Longnecker......................................... 200,000
John D. Bower............................................... 70,000
Kate W. Duchene............................................. 20,000

Management-led Buyout

In April 1999, we entered into a series of transactions pursuant to which we
purchased all of the membership units of Resources Connection LLC from Deloitte
& Touche. We financed the purchase in part with capital provided by our
management and an investor group led by Evercore Capital Partners L.L.C. and
certain of its affiliates. We issued and sold 9,855,260 shares of our Common
Stock and 144,740 shares of our Class B Common Stock to 22 accredited investors
and 30 additional investors. Simultaneously, we issued and sold subordinated
notes, bearing 12% annual interest with a maturity date of April 15, 2004, in
an aggregate principal amount of $22.0 million to the same investors. After the
close of our initial public offering in December 2000, we used a portion of the
proceeds to prepay the outstanding principal and all accrued and unpaid
interest on the notes. Stockholders owning 5% or more of our outstanding
shares, directors and officers who participated in these transactions include:

Number of Shares Aggregate
Number of Shares of Class B Principal Amount of
of Common Stock Common Stock Subordinated Notes
Name Acquired Acquired Acquired($)
---- ---------------- ---------------- -------------------

Donald B. Murray........ 54,690 0 120,318
Stephen J. Giusto....... 20,000 0 44,000
Brent M. Longnecker..... 75,000 0 165,000
John D. Bower........... 4,690 0 10,318
Gerald Rosenfeld........ 185,010 0 239,990
Entities affiliated with
Evercore Capital
Partners L.L.C. ....... 7,742,630 144,740 17,889,654

Joint Marketing Agreement with and Investment in Ledgent

In September 2000, we entered into a Joint Marketing Agreement with Complete
BackOffice.com, Inc., later renamed Ledgent, Inc. Ledgent is a privately held
corporation engaged in the business of outsourcing complete accounting and
human resources functions over the Internet. Our agreement with Ledgent is to
cooperate in the promotion of each party's services to both new and existing
customers. To that end, we have agreed to provide our customer list and
marketing databases to Ledgent in exchange for its customer list and marketing
databases. We have also agreed to provide the Ledgent sales staff with office
space and administrative staff and support for one year from the date of the
agreement at no cost to Ledgent. In addition, both parties agree not to compete
with the business of the other party during the term of the agreement, the
initial term of which is two years. The agreement also contemplates a referral
service whereby we receive 1% of the gross profits generated by Ledgent during
the first year of a client relationship that results from one of our leads, and
Ledgent receives 1% of the gross profits generated by us during the first year
of a client relationship that results from one of its leads.

We and several of our stockholders, including some members of our management
team, own collectively, a 13.4% indirect interest in Ledgent through our
majority-owned subsidiary, which we control. We own 57% of the subsidiary,
Donald B. Murray, our chief executive officer, owns 4.9% of the subsidiary and
our executive officers, other than Mr. Murray, collectively own 3.5% of the
subsidiary. Entities affiliated with Evercore Partners L.L.C. collectively have
a right to acquire 25.7% of the subsidiary.

Our subsidiary has the right to designate one director to serve on the board
of directors of Ledgent. Donald B. Murray, our chief executive officer, is
currently serving as the designee.

Relationship Between Our Financial Printing Company and Our Chief Legal
Officer and Executive Vice President, Human Relations

We have hired R.R. Donnelley Financial Printing, or Donnelley, to provide
certain printing and related services. We estimate that the total amount we
will pay to Donnelley for its services in connection with this offering will be
$200,000. The spouse of Ms. Duchene is employed by Donnelley. We may engage
Donnelley in the future to provide additional printing and related services.

PRINCIPAL AND SELLING STOCKHOLDERS

The following table contains information about the beneficial ownership of
our common stock as of June 30, 2001 and immediately after the offering for:

. each person who beneficially owns more than five percent of the common
stock;

. each of our directors;

. each named executive officer and each executive officer;

. all directors, named executive officers and executive officers as a
group; and

. all selling stockholders.

Unless otherwise indicated, the address for each person or entity named
below is c/o Resources Connection, Inc., 695 Town Center Drive, Suite 600,
Costa Mesa, California 92626.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Except as indicated by footnote, and except
for community property laws where applicable, the persons named in the table
below have sole voting and investment power with respect to all shares of
common stock shown as beneficially owned by them. The table assumes no exercise
of the underwriters' over-allotment option. If the underwriters' over-allotment
option is exercised in full, we and the selling stockholders will sell up to an
aggregate of 529,889 additional shares of common stock. The percentage of
beneficial ownership before the offering is based on 20,792,080 shares of
common stock outstanding as of June 30, 2001.

Percentage of
Number of Shares Shares Number of
Beneficially Owned Outstanding Shares to
------------------- ----------------- be Sold
Before After Before After in
Offering Offering Offering Offering Offering
--------- --------- -------- -------- ---------

Directors and Officers(1)
Donald B. Murray(2)............ 1,421,083 1,421,083 6.8% 6.8% --
Stephen J. Giusto(3)........... 387,456 387,456 1.9% 1.8% --
Karen M. Ferguson.............. 335,250 335,250 1.6% 1.6% --
Brent M. Longnecker............ 240,994 240,994 1.2% 1.1% --
John D. Bower.................. 75,627 75,627 * * --
Kate W. Duchene(4)............. 32,500 32,500 * * --
David G. Offensend(5).......... -- -- * * --
Gerald Rosenfeld(6)............ 136,882 136,882 * * --
Leonard Schutzman(5)........... -- -- * * --
John C. Shaw(7)................ 16,000 16,000 * * --
C. Stephen Mansfield........... 750 750 * * --
Named Executive Officers,
Executive Officers and
Directors as a group (11
persons)...................... 2,646,542 2,646,542 12.7% 12.6% --

Selling Stockholders
Evercore Partners L.L.C.(8).... 5,835,580 2,835,580 28.1% 13.5% 3,000,000
DB Capital Investors, L.P.(9).. 382,480 49,889 1.8% * 332,591

--------
* Represents less than 1%.

(1) Since June 30, 2001, Mr. Murray, Mr. Giusto, Ms. Ferguson, Mr. Longnecker,
Mr. Bower, Ms. Duchene and Mr. Shaw have sold 36,000, 30,500, 35,000,
55,000, 20,000, 4,000 and 15,000 shares, respectively.

(2) Includes shares owned by Mr. Murray and shares beneficially owned by Mr.
Murray in The Murray Family Trust, Donald B. Murray, Trustee; Murray Fam
Income TR312000 Shimizu Ronald J Ttee; Patrick Murray, Sr. as Custodian for
Patrick Murray, Jr. until age 21 under the CUTMA; and Brian Murray.

(3) Includes shares owned by Mr. Giusto, beneficially owned by Mr. Giusto in
The Giusto Family Income Trust dated 9/12/2000, Michael J. Giusto, trustee
and 1,000 shares owned by Susan P. Giusto, the spouse of Mr. Giusto.

(4) Ms. Duchene has 12,500 shares of common stock subject to options
exercisable within 60 days of June 30, 2001.

(5) David G. Offensend, a managing member of Evercore Partners L.L.C., may be
deemed to share beneficial ownership of any shares beneficially owned by
Evercore Partners L.L.C., but hereby disclaims such beneficial ownership,
except to the extent of his pecuniary interest in the Evercore Investors or
Evercore Partners L.L.C. Leonard Schutzman is a director and is an
executive of, or consultant to, Evercore Partners, Inc. Mr. Schutzman may
be deemed to share beneficial ownership of any shares beneficially owned by
Evercore Partners L.L.C., but hereby disclaims beneficial ownership of any
shares beneficially owned by Evercore Partners L.L.C., except to the extent
of his pecuniary interest in the Evercore Investors or Evercore Partners
L.L.C. The address for Mr. Offensend and Mr. Schutzman is c/o Evercore
Partners L.L.C., 65 East 55th Street, 33rd Floor, New York, New York 10022.

(6) Includes shares owned by Mr. Rosenfeld and shares beneficially owned by Mr.
Rosenfeld in the Rosenfeld August 2000 GRAT. Mr. Rosenfeld's address is c/o
Rothschild Inc., 1251 Avenue of the Americas, New York, New York 10020.

(7) Mr. Shaw has been a director of Resources Connection since June 1999. Mr.
Shaw has 15,000 shares of common stock subject to options exercisable
within 60 days of June 30, 2001. Mr. Shaw's address is The Shaw Group LLC,
P.O. Box 3369, Newport Beach, California 92659.

(8) Shares shown as owned by Evercore Partners L.L.C. are the aggregate number
of shares owned of record by Evercore Capital Partners L.P., Evercore
Capital Partners (NQ) L.P., Evercore Capital Offshore Partners L.P. and
Evercore Co-Investment Partnership L.P., or, collectively, the Evercore
Investors. Evercore Partners L.L.C. is directly or indirectly the general
partner of each of the Evercore Investors. The address for Evercore
Partners L.L.C. is 65 East 55th Street, 33rd Floor, New York, New York
10022.

(9) Shares are owned by DB Capital Investors, L.P., an indirect wholly owned
subsidiary of Deutsche Bank A.G. The address for DB Capital Investors, L.P.
is 130 Liberty Street, 34th Floor, New York, New York 10006.

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 35,000,000 shares of common stock,
$0.01 par value per share, and 5,000,000 shares of preferred stock, $0.01 par
value per share. As of June 30, 2001, there were 20,792,080 shares of common
stock outstanding, held of record by approximately 190 stockholders, and
options to purchase 3,210,445 shares of common stock.

Common Stock

Under our second restated certificate of incorporation, the holders of
common stock are entitled to one vote per share on all matters to be voted on
by the stockholders. After payment of any dividends due and owing to the
holders of preferred stock, holders of common stock are entitled to receive
dividends declared by the board of directors out of funds legally available for
dividends. In the event of our liquidation, dissolution or winding up, holders
of common stock are entitled to share in all assets remaining after payment of
liabilities and liquidation preferences of outstanding shares of preferred
stock. Holders of common stock have no preemptive, conversion, subscription or
other rights. There are no redemption or sinking fund provisions applicable to
the common stock. All outstanding shares of common stock are fully paid and
nonassessable.

Preferred Stock

Under our second restated certificate of incorporation, the board has the
authority, without further action by stockholders, to issue up to 5,000,000
shares of preferred stock. The board may issue preferred stock in one or more
series and may determine the rights, preferences, privileges, qualifications
and restrictions granted to or imposed upon the preferred stock, including
dividend rights, conversion rights, voting rights, rights and terms of
redemption, liquidation preferences and sinking fund terms, any or all of which
may be greater than the rights of the common stock. The issuance of preferred
stock could adversely affect the voting power of holders of common stock and
reduce the likelihood that common stockholders will receive dividend payments
and payments upon liquidation. The issuance of preferred stock could also have
the effect of decreasing the market price of the common stock and could delay,
deter or prevent a change in control of our company. We have no present plans
to issue any shares of preferred stock.

Registration Rights

If we propose to register our common stock under the Securities Act for our
own account or the account of any of our stockholders or both, the Evercore
Partners, Richard Gersten, Paul Lattanzio, Gerald Rosenfeld, Mainz Holdings
Ltd., DB Capital Investors, L.P,, BancBoston Investments Inc., certain
management stockholders and certain employee stockholders are entitled to
notice of the registration and to include registrable shares in that offering,
provided that the underwriters of that offering do not limit the number of
shares included in the registration. In addition, pursuant to a Stockholders
Agreement between us, the Evercore Partners, Donald B. Murray, Stephen J.
Giusto, Karen M. Ferguson and Brent M. Longnecker, the Evercore stockholders
and the management stockholders can demand registration of their shares up to
three times, subject to postponement by the company under certain
circumstances. We have agreed to pay for two demand registrations of each of
the Evercore Partners and the management stockholders, subject to an aggregate
expense limit of $500,000 for each group. This offering is made pursuant to one
of these demand registrations. The stockholders with these registration rights
hold an aggregate of 6,446,178 shares, after deducting shares to be sold
pursuant to this offering by the selling stockholders. We are required to bear
substantially all of the costs incurred in these registrations, other than
underwriting discounts and commissions. The registration rights described above
could result in future expenses for us and adversely affect any future equity
or debt offerings.

Anti-Takeover Provisions

Delaware Law

We are governed by the provisions of Section 203 of the Delaware Law. In
general, Section 203 prohibits a public Delaware corporation from engaging in a
"business combination" with an "interested stockholder"

for a period of three years after the date of the transaction in which the
person became an interested stockholder, unless the business combination is
approved in a prescribed manner. A "business combination" includes mergers,
asset sales or other transactions resulting in a financial benefit to the
interested stockholder. An "interested stockholder" is a person who, together
with affiliates and associates, owns (or within three years, did own) 15% or
more of the company's voting stock. The statute could delay, defer or prevent a
change in control of our company.

Certificate of Incorporation and Bylaw Provisions

Various provisions contained in our second restated certificate of
incorporation and bylaws could delay or discourage some transactions involving
an actual or potential change in control of us or our management and may limit
the ability of stockholders to remove current management or approve
transactions that stockholders may deem to be in their best interests and could
adversely affect the price of our common stock. These provisions:

. authorize our board of directors to establish one or more series of
undesignated preferred stock, the terms of which can be determined by
the board of directors at the time of issuance;

. divide our board of directors into three classes of directors, with each
class serving a staggered three-year term. As the classification of the
board of directors generally increases the difficulty of replacing a
majority of the directors, it may tend to discourage a third party from
making a tender offer or otherwise attempting to obtain control of us
and may maintain the composition of the board of directors;

. prohibit cumulative voting in the election of directors unless required
by applicable law. Under cumulative voting, a minority stockholder
holding a sufficient percentage of a class of shares may be able to
ensure the election of one or more directors;

. state that special meetings of our stockholders may be called only by
the Chairman of the board of directors, our Chief Executive Officer, by
the board of directors after a resolution is adopted by a majority of
the total number of authorized directors, or by the holders of not less
than 10% of our outstanding voting stock;

. establish advance notice requirements for submitting nominations for
election to the board of directors and for proposing matters that can be
acted upon by stockholders at a meeting;

. allow our directors, not our stockholders, to fill vacancies on our
board of directors; and

. provide that the authorized number of directors may be changed only by
resolution of the board of directors.

The Nasdaq Stock Market's National Market

Our common stock is listed on The Nasdaq Stock Market's National Market
under the trading symbol "RECN".

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock
Transfer & Trust.

SHARES ELIGIBLE FOR FUTURE SALE

Our common stock has traded on the Nasdaq National Market under the symbol
"RECN" since December 15, 2000. Future sales of substantial amounts of our
common stock in the public market could adversely affect the prevailing market
price and our ability to raise equity capital in the future.

After completion of this offering, we will have 20,992,080 outstanding
shares of common stock. Of these shares, the 3,532,591 shares of common stock
to be sold in this offering, the 7,475,000 shares of common stock sold in our
initial public offering and the shares sold to date by our stockholders
pursuant to Rule 144 or Rule 701 under the Securities Act will be freely
tradable without restriction or further registration under the Securities Act,
unless purchased by our affiliates or covered by a separate lock-up agreement
with the underwriters.

The remaining 9,383,498 shares of common stock held by existing stockholders
are restricted securities. Restricted securities may be sold in the public
market only if registered or if they qualify for an exemption from registration
described below under Rules 144, 144(k) or 701 promulgated under the Securities
Act.

As a result of the lock-up agreements described in "Underwriting" and the
provisions of Rules 144, 144(k) and 701 described below, these restricted
shares will be available for sale in the public market as follows:

. 6,190,571 shares held by persons subject to the lock-up agreements will
be released 91 days after the date of this prospectus, 6,040,571 of
which will have been held long enough to be sold under Rule 144 or Rule
701; and

. the remaining shares may be sold under Rule 144 or 144(k) once they have
been held for the required time.

Credit Suisse First Boston Corporation and Deutsche Banc Alex. Brown Inc.
may agree to release shares subject to the lock-up agreements prior to the end
of the 90-day lock-up period, although they have no current intention to do so.
For further details, see "Underwriting".

Rule 144. In general, under Rule 144, a person who has beneficially owned
restricted securities for at least one year would be entitled to sell within
any three-month period a number of shares that does not exceed the greater of:

. 1% of the number of shares of our common stock then outstanding, which
currently equals approximately 207,921 shares; or

. the average weekly trading volume of our common stock on the Nasdaq
National Market during the four calendar weeks preceding the filing of a
notice on Form 144 with respect to the sale.

Sales under Rule 144 are also limited by manner-of-sale provisions and
notice requirements and to the availability of current public information about
us.

Rule 144(k). Under Rule 144(k), a person who is not deemed to have been one
of our affiliates at any time during the 90 days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years is
entitled to sell these shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144 discussed
above.

Rule 701. In general, under Rule 701, any of our employees, consultants or
advisors who purchase or receive shares from us under a compensatory stock
purchase plan or option plan or other written agreement is eligible to resell
those shares. Non-affiliates will be able to sell their shares subject only to
the manner-of-sale provisions of Rule 144. Affiliates will be able to sell
their shares without compliance with the holding period requirements of Rule
144.

Registration Rights. Upon completion of this offering, the holders of
6,446,178 shares of our common stock will be entitled to rights with respect to
the registration of their shares under the Securities Act. See "Description of
Capital Stock--Registration Rights". Except for shares purchased by affiliates,
registration of their shares under the Securities Act would result in these
shares becoming freely tradable without restriction under the Securities Act
immediately upon the effectiveness of the registration.

Stock and Stock Options. On December 22, 2000, we filed a registration
statement on Form S-8 to register the issuance of all the shares of common
stock that could be purchased upon the exercise of stock options outstanding on
that date and all the shares of common stock reserved for issuance pursuant to
the 1999 Long-Term Incentive Plan. On February 2, 2001, we filed a registration
statement on Form S-8 to register the issuance of all the shares of common
stock that could be purchased upon the exercise of stock options outstanding on
that date and all the shares of common stock reserved for issuance pursuant to
the Resources Connection, Inc. Employee Stock Purchase Plan. Accordingly,
shares registered under both of these registration statements are freely
tradable by holders, except with respect to Rule 144 volume limitations that
apply to our affiliates.

UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting
agreement dated , 2001 the selling stockholders have agreed to sell to
the underwriters named below, for whom Credit Suisse First Boston Corporation
and Deutsche Banc Alex. Brown Inc., as joint bookrunners, and Bear, Stearns &
Co. Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Robert W.
Baird & Co. Incorporated are acting as representatives, the following
respective numbers of shares of common stock:

Number
Underwriter of Shares
----------- ---------

Credit Suisse First Boston Corporation.............................
Deutsche Banc Alex. Brown Inc......................................
Bear, Stearns & Co. Inc............................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..............................................
Robert W. Baird & Co. Incorporated.................................
---------

Total............................................................ 3,532,591
=========

As joint bookrunners, Credit Suisse First Boston Corporation and Deutsche
Banc Alex. Brown Inc. have equal responsibility for this offering. The
underwriting agreement provides that the underwriters are obligated to purchase
all the shares of common stock in the offering if any are purchased, other than
those shares covered by the over-allotment option described below. The
underwriting agreement also provides that if an underwriter defaults the
purchase commitments of non-defaulting underwriters may be increased or the
offering may be terminated.

We and the selling stockholders have granted to the underwriters a 30-day
option to purchase on a pro rata basis up to an aggregate 30,000 additional
shares from us and 499,889 additional shares from the selling stockholders at
the public offering price less the underwriting discounts and commissions. The
option may be exercised only to cover any over-allotments of common stock.

The underwriters propose to offer the shares of common stock initially at
the public offering price on the cover page of this prospectus and to selling
group members at that price less a selling concession of $ per share. The
underwriters and selling group members may allow a discount of $ per share on
sales to other broker/dealers. After the public offering, the representatives
may change the public offering price and concession and discount to
broker/dealers.

The following table summarizes the compensation and estimated expenses we
and the selling stockholders will pay:

Per Share Total
----------------------------- -----------------------------
Without With Without With
Over-allotment Over-allotment Over-allotment Over-allotment
-------------- -------------- -------------- --------------

Underwriting Discounts
and Commissions
paid by us............. $ $ $ $
Expenses payable by us.. $ $ $ $
Underwriting Discounts
and Commissions
paid by selling
stockholders........... $ $ $ $
Expenses payable by the
selling stockholders... $ $ $ $

We have agreed that we will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Securities and
Exchange Commission a registration statement under the Securities Act of 1933
(the "Securities Act") relating to, any shares of our common stock or
securities convertible into or exchangeable or exercisable for any shares of
our common stock, or publicly disclose the

intention to make any offer, sale, pledge, disposition or filing, without the
prior written consent of Credit Suisse First Boston Corporation and Deutsche
Banc Alex. Brown Inc. for a period of 90 days after the date of this
prospectus, except grants or issuances of any such securities under any of our
employee benefit plans existing on the date of this prospectus.

Our officers, directors and certain stockholders have agreed that they will
not offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, any shares of our common stock or securities convertible into or
exchangeable or exercisable for any shares of our common stock, enter into a
transaction that would have the same effect, or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of our common stock, whether any of these
transactions are to be settled by delivery of our common stock or other
securities, in cash or otherwise, or publicly disclose the intention to make
any offer, sale, pledge or disposition, or to enter into any transaction, swap,
hedge or other arrangement, without, in each case, the prior written consent of
Credit Suisse First Boston Corporation and Deutsche Banc Alex. Brown Inc. for a
period of 90 days after the date of this prospectus.

We and the selling stockholders have agreed to indemnify the underwriters
against liabilities under the Securities Act, or contribute to payments that
the underwriters may be required to make in that respect.

Our common stock is listed on the Nasdaq National Market under the symbol
"RECN". We have applied to list the shares of common stock to be sold by us in
this offering on the Nasdaq National Market.

Some of the underwriters and their affiliates have engaged in, and may in
the future engage in, investment banking and other commercial dealings in the
ordinary course of business with us. They have received customary fees and
commissions for these transactions. For example, Credit Suisse First Boston
Corporation, Deutsche Banc Alex. Brown Inc. and Robert W. Baird & Co.
Incorporated were each engaged by us to offer the sale of our common stock in
our initial public offering in December 2000.

In addition, DB Capital Investors, L.P., an affiliate of Deutsche Banc Alex.
Brown Inc., owns 382,480 shares of our common stock, representing 1.8% of our
outstanding common stock as of June 30, 2001. DB Capital Investors, L.P.
purchased these shares in April 1999 and intends to sell certain of these
shares in this offering.

In connection with the offering, the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions,
penalty bids and passive market making in accordance with Regulation M under
the Securities Exchange Act of 1934 (the "Exchange Act").

. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified
maximum.

. Over-allotment involves sales by the underwriters of shares in
excess of the number of shares the underwriters are obligated to
purchase, which creates a syndicate short position. The short
position may be either a covered short position or a naked short
position. In a covered short position, the number of shares over-
allotted by the underwriters is not greater than the number of
shares that they may purchase in the over-allotment option. In a
naked short position, the number of shares involved is greater than
the number of shares in the over-allotment option. The underwriters
may close out any short position by either exercising their over-
allotment option and/or purchasing shares in the open market.

. Syndicate covering transactions involve purchases of the common
stock in the open market after the distribution has been completed
in order to cover syndicate short positions. In determining the
source of shares to close out the short position, the underwriters
will consider, among other things, the price of shares available for
purchase in the open market as compared to the price at which they
may purchase shares through the over-allotment option. If the
underwriters sell more shares than could be covered by the over-
allotment option--a naked short position--the position

can only be closed out by buying shares in the open market. A naked
short position is more likely to be created if the underwriters are
concerned that there could be downward pressure on the price of the
shares in the open market after pricing that could adversely affect
investors who purchase in the offering.

. Penalty bids permit the representatives to reclaim a selling
concession from a syndicate member when the common stock originally
sold by the syndicate member is purchased in a stabilizing or
syndicate covering transaction to cover syndicate short positions.

. In passive market making, market makers in the common stock who are
underwriters or prospective underwriters may, subject to
limitations, make bids for or purchases of our common stock until
the time, if any, at which a stabilizing bid is made.

These stabilizing transactions, syndicate covering transactions and penalty
bids may have the effect of raising or maintaining the market price of our
common stock or preventing or retarding a decline in the market price of the
common stock. As a result the price of our common stock may be higher than the
price that might otherwise exist in the open market. These transactions may be
effected on The Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.

A prospectus in electronic format may be made available on the websites
maintained by one or more of the underwriters participating in this offering.
The representatives may agree to allocate a number of shares to underwriters
for sale to their online brokerage account holders. Internet distributions will
be allocated by the underwriters that will make internet distributions on the
same basis as other allocations. Credit Suisse First Boston Corporation may
effect an on-line distribution through its affiliate, CSFBdirect Inc., an on-
line broker dealer, as a selling group member.

NOTICE TO CANADIAN RESIDENTS

Resale Restrictions

The distribution of the common stock in Canada is being made only on a
private placement basis exempt from the requirement that we and the selling
shareholder(s) prepare and file a prospectus with the securities regulatory
authorities in each province where trades of common stock are made. Any resale
of the common stock in Canada must be made under applicable securities laws
which will vary depending on the relevant jurisdiction, and which may require
resales to be made under available statutory exemptions or under a
discretionary exemption granted by the applicable Canadian securities
regulatory authority. Purchasers are advised to seek legal advice prior to any
resale of the common stock.

Representations of Purchasers

By purchasing common stock in Canada and accepting a purchase confirmation a
purchaser is representing to us, the selling shareholder(s) and the dealer from
whom the purchase confirmation is received that

. the purchaser is entitled under applicable provincial securities laws to
purchase the common stock without the benefit of a prospectus qualified
under those securities laws,

. where required by law, that the purchaser is purchasing as principal and
not as agent, and

. the purchaser has reviewed the text above under Resale Restrictions.

Rights of Action (Ontario Purchasers)

The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.

Enforcement of Legal Rights

All of the issuer's directors and officers as well as the experts named
herein and the selling shareholder(s) may be located outside of Canada and, as
a result, it may not be possible for Canadian purchasers to effect service of
process within Canada upon the issuer or such persons. All or a substantial
portion of the assets of the issuer and such persons may be located outside of
Canada and, as a result, it may not be possible to satisfy a judgment against
the issuer or such persons in Canada or to enforce a judgment obtained in
Canadian courts against such issuer or persons outside of Canada.

Notice to British Columbia Residents

A purchaser of common stock to whom the Securities Act (British Columbia)
applies is advised that the purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
common stock acquired by the purchaser in this offering. The report must be in
the form attached to British Columbia Securities Commission Blanket Order BOR
#95/17, a copy of which may be obtained from us. Only one report must be filed
for common stock acquired on the same date and under the same prospectus
exemption.

Taxation and Eligibility for Investment

Canadian purchasers of common stock should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the common
stock in their particular circumstances and about the eligibility of the common
stock for investment by the purchaser under relevant Canadian legislation.

LEGAL MATTERS

The validity of the shares of common stock offered in this prospectus will
be passed upon for us by O'Melveny & Myers LLP, Newport Beach, California.
Latham & Watkins, Costa Mesa, California, will pass upon certain legal matters
in connection with this offering for the underwriters.

EXPERTS

The consolidated financial statements of Resources Connection, Inc. and its
subsidiaries as of May 31, 2000 and 2001 and for the period from inception,
November 16, 1998, through May 31, 1999, and for the years ended May 31, 2000
and 2001, included in this prospectus have been included in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.

The financial statements of Resources Connection LLC for the period June 1,
1998 through March 31, 1999, included in this prospectus have been included in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission, or the
Commission, a registration statement on Form S-1 under the Securities Act, with
respect to the common stock offered by this prospectus. As permitted by the
rules and regulations of the Commission, this prospectus, which is a part of
the registration statement, omits certain information, exhibits, schedules and
undertakings included in the registration statement. For further information
pertaining to us and the common stock offered under this prospectus, reference
is made to the registration statement and the attached exhibits and schedules.
Although required material information has been presented in this prospectus,
statements contained in this prospectus as to the contents or provisions of any
contract or other document referred to in this prospectus may be summary in
nature, and in each instance reference is made to the copy of this contract or
other document filed as an exhibit to the registration statement, and each
statement is qualified in all respects by this reference. A copy of the
registration statement may be inspected without charge at the office of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of all or
any part of the registration statement may be obtained from the Commission's
offices upon the payment of the fees prescribed by the Commission. In addition,
registration statements and certain other filings made with the Commission
through its Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system,
including our registration statement and all exhibits and amendments to our
registration statement, are publicly available through the Commission's website
at http://www.sec.gov.

We also file periodic reports, proxy statements and other information with
the Commission. You may read and copy any document we file at the Commission's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the Commission at 1-800-SEC-0330 for further information on the public
reference room. You may also obtain our Commission filings from the
Commission's website referred to above.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page
----

RESOURCES CONNECTION, INC.

Report of Independent Accountants........................................ F-2
Consolidated Balance Sheets as of May 31, 2000 and 2001.................. F-3
Consolidated Statements of Income for the period from inception, November
16, 1998, through May 31, 1999 and for each of the two years in the
period ended May 31, 2001............................................... F-4
Consolidated Statements of Stockholders' Equity for the period from
inception, November 16, 1998, through May 31, 1999 and for each of the
two years in the period ended May 31, 2001.............................. F-5
Consolidated Statements of Cash Flows for the period from inception,
November 16, 1998, through May 31, 1999 and for each of the two years in
the period ended May 31, 2001........................................... F-6
Notes to Consolidated Financial Statements............................... F-7

RESOURCES CONNECTION LLC

Report of Independent Accountants........................................ F-20
Statement of Income for the period from June 1, 1998 through March 31,
1999.................................................................... F-21
Statement of Cash Flows for the period from June 1, 1998 through March
31, 1999................................................................ F-22
Notes to Financial Statements............................................ F-23

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and the Board of Directors
of Resources Connection, Inc.

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, stockholders' equity and cash flows present
fairly, in all material respects, the financial position of Resources
Connection, Inc., formerly RC Transaction Corp., and its subsidiaries at May
31, 2000 and 2001, and the results of their operations and their cash flows for
the period from inception, November 16, 1998 through May 31, 1999, and the
years ended May 31, 2000 and 2001 in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.

PricewaterhouseCoopers LLP

Orange County, California
July 2, 2001

F-2

RESOURCES CONNECTION, INC.

CONSOLIDATED BALANCE SHEETS

May 31,
-------------------------
2000 2001
----------- ------------

ASSETS
------

Current assets:
Cash and cash equivalents......................... $ 4,490,000 $ 34,503,000
Trade accounts receivable, net of allowance for
doubtful accounts of $1,586,000 and $2,450,000 as
of May 31, 2000 and 2001, respectively........... 18,166,000 23,908,000
Deferred income taxes............................. 1,300,000 2,349,000
Prepaid expenses and other current assets......... 746,000 853,000
----------- ------------
Total current assets............................ 24,702,000 61,613,000
Intangible assets, net............................ 41,583,000 38,445,000
Property and equipment, net....................... 3,196,000 4,085,000
Other assets...................................... 625,000 1,202,000
----------- ------------
Total assets.................................... $70,106,000 $105,345,000
=========== ============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:
Accounts payable and accrued expenses............. $ 2,519,000 $ 2,479,000
Accrued salaries and related obligations.......... 7,450,000 15,046,000
Other liabilities................................. 801,000 1,123,000
Current portion of term loan...................... 6,268,000
----------- ------------
Total current liabilities....................... 17,038,000 18,648,000
Deferred income taxes............................. 380,000 665,000
Term loan......................................... 10,232,000
Subordinated notes payable........................ 25,271,000
----------- ------------
Total liabilities............................... 52,921,000 19,313,000
----------- ------------

Commitments and contingencies (Note 13)

Stockholders' equity:
Preferred stock, $0.01 par value, 5,000,000
shares authorized;
zero shares issued and outstanding..............
Common stock, $0.01 par value, 35,000,000 shares
authorized; 15,630,000 and 20,735,000 shares
issued and outstanding as of May 31, 2000 and
2001, respectively.............................. 156,000 207,000
Additional paid-in capital....................... 10,222,000 66,507,000
Deferred stock compensation...................... (499,000) (1,507,000)
Accumulated other comprehensive loss............. (32,000) (53,000)
Notes receivable from stockholders............... (164,000)
Retained earnings................................ 7,338,000 21,043,000
Treasury stock, at cost, zero shares at May 31,
2000 and 48,000 shares at May 31, 2001.......... (1,000)
----------- ------------
Total stockholders' equity...................... 17,185,000 86,032,000
----------- ------------
Total liabilities and stockholders' equity...... $70,106,000 $105,345,000
=========== ============

The accompanying notes are an integral part of these financial statements.

F-3

RESOURCES CONNECTION, INC.

CONSOLIDATED STATEMENTS OF INCOME

For The Period
From Inception,
November 16, For The Year Ended
1998, Through -------------------------
May 31, May 31, May 31,
1999 2000 2001
--------------- ------------ ------------

Revenue............................. $15,384,000 $126,332,000 $189,752,000
Direct cost of services, primarily
payroll and related taxes for
professional services employees.... 8,618,000 73,541,000 110,811,000
----------- ------------ ------------
Gross profit...................... 6,766,000 52,791,000 78,941,000
Selling, general and administrative
expenses........................... 4,274,000 34,648,000 49,964,000
Amortization of intangible assets... 371,000 2,231,000 2,273,000
Depreciation expense................ 30,000 285,000 866,000
----------- ------------ ------------
Income from operations............ 2,091,000 15,627,000 25,838,000
Interest income..................... (633,000)
Interest expense.................... 734,000 4,717,000 2,676,000
----------- ------------ ------------
Income before provision for income
taxes and extraordinary charge... 1,357,000 10,910,000 23,795,000
Provision for income taxes.......... 565,000 4,364,000 9,518,000
----------- ------------ ------------
Income before extraordinary
charge........................... 792,000 6,546,000 14,277,000
Extraordinary charge, net of tax
effect of $381,000................. 572,000
----------- ------------ ------------
Net income........................ $ 792,000 $ 6,546,000 $ 13,705,000
=========== ============ ============
Net income per common share:
Basic before extraordinary
charge........................... $ 0.09 $ 0.42 $ 0.80
Extraordinary charge.............. 0.03
----------- ------------ ------------
Basic............................. $ 0.09 $ 0.42 $ 0.77
=========== ============ ============
Diluted before extraordinary
charge........................... $ 0.09 $ 0.42 $ 0.74
Extraordinary charge.............. 0.03
----------- ------------ ------------
Diluted........................... $ 0.09 $ 0.42 $ 0.71
=========== ============ ============
Weighted average common shares
outstanding:
Basic............................. 8,691,000 15,630,000 17,864,000
=========== ============ ============
Diluted........................... 8,691,000 15,714,000 19,421,000
=========== ============ ============

The accompanying notes are an integral part of these financial statements.

F-4

RESOURCES CONNECTION, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Notes Accumulated
Common Stock Additional Deferred Treasury Stock Receivable Other
------------------- Paid-In Stock ----------------- from Comprehensive Retained
Shares Amount Capital Compensation Shares Amount Stockholders Loss Earnings
---------- -------- ----------- ------------ ------- -------- ------------ ------------- -----------

Issuance of
common shares to
founders for
cash............. 5,630,000 $ 56,000 $ -- $ -- -- $ -- $ -- $ -- $ --
Issuance of
common shares for
cash............. 9,855,000 99,000 9,757,000
Issuance of Class
B common shares
for cash......... 145,000 1,000 143,000
Issuance costs of
common shares.... (238,000)
Deferred stock
compensation..... 37,000 (37,000)
Net income for
the period from
inception,
November 16,
1998, through May
31, 1999......... 792,000
---------- -------- ----------- ----------- ------- -------- --------- -------- -----------
Balances as of
May 31, 1999..... 15,630,000 156,000 9,699,000 (37,000) 792,000
Deferred stock
compensation..... 523,000 (523,000)
Amortization of
deferred stock
compensation..... 61,000
Comprehensive
income:
Currency
translation
adjustment, net
of tax ......... (32,000)
Net income for
the year ended
May 31, 2000 ... 6,546,000
Total
comprehensive
income...........
---------- -------- ----------- ----------- ------- -------- --------- -------- -----------
Balances as of
May 31, 2000..... 15,630,000 156,000 10,222,000 (499,000) (32,000) 7,338,000
Initial public
offering of
common stock..... 5,000,000 50,000 55,750,000
Costs related to
stock offering... (1,690,000)
Exercise of stock
options.......... 105,000 1,000 369,000
Repurchase of
treasury stock... 123,000 (45,000)
Reissuance of
treasury stock... 469,000 (75,000) 44,000 (164,000)
Deferred stock
compensation..... 1,387,000 (1,387,000)
Amortization of
deferred stock
compensation..... 379,000
Comprehensive
income:
Currency
translation
adjustment, net
of tax.......... (21,000)
Net income for
the year ended
May 31, 2001.... 13,705,000
Total
comprehensive
income...........
---------- -------- ----------- ----------- ------- -------- --------- -------- -----------
Balances as of
May 31, 2001..... 20,735,000 $207,000 $66,507,000 $(1,507,000) 48,000 $ (1,000) $(164,000) $(53,000) $21,043,000
========== ======== =========== =========== ======= ======== ========= ======== ===========

Total
Stockholders'
Equity
-------------

Issuance of
common shares to
founders for
cash............. $ 56,000
Issuance of
common shares for
cash............. 9,856,000
Issuance of Class
B common shares
for cash......... 144,000
Issuance costs of
common shares.... (238,000)
Deferred stock
compensation.....
Net income for
the period from
inception,
November 16,
1998, through May
31, 1999......... 792,000
-------------
Balances as of
May 31, 1999..... 10,610,000
Deferred stock
compensation.....
Amortization of
deferred stock
compensation..... 61,000
Comprehensive
income:
Currency
translation
adjustment, net
of tax ......... (32,000)
Net income for
the year ended
May 31, 2000 ... 6,546,000
-------------
Total
comprehensive
income........... 6,514,000
-------------
Balances as of
May 31, 2000..... 17,185,000
Initial public
offering of
common stock..... 55,800,000
Costs related to
stock offering... (1,690,000)
Exercise of stock
options.......... 370,000
Repurchase of
treasury stock... (45,000)
Reissuance of
treasury stock... 349,000
Deferred stock
compensation.....
Amortization of
deferred stock
compensation..... 379,000
Comprehensive
income:
Currency
translation
adjustment, net
of tax.......... (21,000)
Net income for
the year ended
May 31, 2001.... 13,705,000
-------------
Total
comprehensive
income........... 13,684,000
-------------
Balances as of
May 31, 2001..... $86,032,000
=============

The accompanying notes are an integral part of these financial statements.

F-5

RESOURCES CONNECTION, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For The Period
From Inception, For the
November 16, Year Ended May 31,
1998, Through -------------------------
May 31, 1999 2000 2001
--------------- ----------- ------------

Cash flows from operating activities
Net income........................ $ 792,000 $ 6,546,000 $ 13,705,000
Adjustments to reconcile net
income to net cash provided by
operating activities, net of
effects of acquisition of
Resources Connection LLC in
April, 1999:
Depreciation and amortization... 401,000 2,516,000 3,139,000
Amortization of debt issuance
costs.......................... 12,000 298,000 130,000
Amortization of deferred stock
compensation................... 61,000 379,000
Bad debt expense................ 200,000 1,048,000 2,110,000
Extraordinary charge............ 953,000
Changes in operating assets and
liabilities:
Trade accounts receivable..... (1,217,000) (7,302,000) (7,852,000)
Prepaid expenses and other
current assets............... (509,000) 75,000 144,000
Other assets.................. (167,000) (484,000) (598,000)
Accounts payable and accrued
expenses..................... 768,000 35,000 (33,000)
Accrued salaries and related
obligations.................. (573,000) 4,722,000 7,596,000
Other liabilities............. 312,000 219,000 322,000
Accrued interest payable
portion of notes payable..... 431,000 2,840,000 1,680,000
Deferred income taxes......... 559,000 (68,000) (764,000)
------------ ----------- ------------
Net cash provided by
operating activities....... 1,009,000 10,506,000 20,911,000
------------ ----------- ------------
Cash flows from investing activities
Purchase of Resources Connection
LLC, net of cash acquired and
including transaction costs...... (50,867,000) (271,000) (225,000)
Purchases of property and
equipment........................ (21,000) (3,021,000) (1,755,000)
------------ ----------- ------------
Net cash used in investing
activities................. (50,888,000) (3,292,000) (1,980,000)
------------ ----------- ------------
Cash flows from financing activities
Proceeds from initial public
offering of common stock......... 55,800,000
Initial public offering costs..... (1,690,000)
Proceeds from exercise of stock
options.......................... 370,000
Proceeds from reissuance of
treasury stock................... 98,000
Purchases of treasury stock....... (45,000)
Proceeds from issuance of
subordinated notes payable....... 22,000,000
Proceeds from term loan........... 18,000,000
Payments on term loan............. (1,500,000) (16,500,000)
Payment on subordinated notes..... (26,951,000)
Net borrowings (repayments) on
revolving loan................... 2,100,000 (2,100,000)
Costs of debt issuances........... (1,163,000)
Issuance of common stock.......... 10,056,000
Costs of equity issuances......... (238,000)
------------ ----------- ------------
Net cash provided by (used
in) financing activities... 50,755,000 (3,600,000) 11,082,000
------------ ----------- ------------
Net increase in cash.............. 876,000 3,614,000 30,013,000
Cash and cash equivalents at
beginning of period.............. -- 876,000 4,490,000
------------ ----------- ------------
Cash and cash equivalents at end
of period........................ $ 876,000 $ 4,490,000 $ 34,503,000
============ =========== ============

The accompanying notes are an integral part of these financial statements.

F-6

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of the Company and its Business

Resources Connection, Inc., formerly RC Transaction Corp., was incorporated
on November 16, 1998. The Company provides professional services to a variety
of industries and enterprises through its subsidiary, Resources Connection LLC
("LLC"), and foreign subsidiaries (collectively the "Company"). Prior to its
acquisition of LLC on April 1, 1999 (see Note 3), Resources Connection, Inc.
had no substantial operations. LLC, which commenced operations in June 1996,
provides clients with experienced professionals who specialize in accounting,
finance, tax, information technology and human resources on a project-by-
project basis. The Company operates in the United States, Canada, Hong Kong and
Taiwan. The Company is a Delaware corporation. LLC is a Delaware organized
limited liability company.

The Company's fiscal year consists of 52 or 53 weeks, ending on the Saturday
in May nearest the last day of May in each year. For convenience, all
references herein to years or periods are to years or periods ended May 31. The
period ended May 31, 1999 consists of 28 weeks, which includes 8 weeks of
operations of LLC. The fiscal years ended May 31, 2000 and 2001 consist of 52
weeks.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany accounts and transactions
have been eliminated in consolidation.

Revenue Recognition

Revenues are recognized and billed when services are rendered by the
Company's professionals. Non-refundable conversion fees are recognized when one
of the Company's professionals accepts an offer of permanent employment from a
client. Conversion fees were less than 3% of revenue for the year ended May 31,
2001 and were less than 4% of revenue for the period ended May 31, 1999 and for
the year ended May 31, 2000. All costs of compensating the Company's
professionals are the responsibility of the Company and are included in direct
cost of services.

Foreign Currency Translation

The financial statements of subsidiaries outside the United States are
generally measured using the local currency as the functional currency. Assets
and liabilities of these subsidiaries are translated at current exchange rates,
income and expense items are translated at average exchange rates prevailing
during the period and the related translation adjustments are recorded as a
component of comprehensive income or loss within stockholders' equity. Gains
and losses from foreign currency transactions are included in the consolidated
statements of income.

Per Share Information

The Company follows Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings Per Share," which establishes standards for the computation,
presentation and disclosure requirements for basic and diluted earnings per
share for entities with publicly held common shares and potential common
shares. Basic earnings per share is computed by dividing net income by the
weighted average number of common shares outstanding. In computing diluted
earnings per share, the weighted average number of shares outstanding is
adjusted to reflect the effect of potentially dilutive securities.

F-7

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Potential common shares totaling 751,000 were not included in the diluted
earnings per share amounts for the year ended May 31, 2000 as their effect
would have been anti-dilutive. For the years ended May 31, 2000 and 2001,
potentially dilutive securities consisted solely of stock options and resulted
in potential common shares of 84,000 and 1,557,000, respectively.

Cash and Cash Equivalents

The Company considers cash on hand, deposits in banks, and short-term
investments purchased with an original maturity date of three months or less to
be cash and cash equivalents. The carrying amounts reflected in the
consolidated balance sheets for cash and cash equivalents approximate the fair
values due to the short maturities of these instruments.

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation and
amortization. Depreciation and amortization is computed using the straight-line
method over the estimated useful lives of the related assets which range from 3
to 10 years. Leasehold improvements are amortized using the straight-line
method over the estimated useful life of the asset or the term of the lease,
whichever is shorter. Costs for normal repairs and maintenance are expensed to
operations as incurred, while renewals and major refurbishments are
capitalized.

Assessments of whether there has been a permanent impairment in the value of
property and equipment are periodically performed by considering factors such
as expected future operating income, trends and prospects, as well as the
effects of demand, competition and other economic factors. Management believes
no permanent impairment has occurred.

Intangible Assets

Goodwill represents the purchase price of LLC in excess of the fair market
value of its net tangible assets at acquisition date, and is being amortized on
a straight-line basis over 20 years. A noncompete agreement is stated at cost
and amortized on a straight-line basis over the four-year life of the
agreement. The costs related to the issuance of debt were capitalized and
amortized to interest expense on a straight-line basis over the 4.5 year life
of the related debt. Debt issuance costs of $12,000, $298,000 and $130,000 were
amortized to interest expense for the period ended May 31, 1999 and the years
ended May 31, 2000 and 2001, respectively.

During the quarter ended February 28, 2001, the Company repaid the
outstanding balance of its term loan and subordinated debt of approximately
$38.8 million using a portion of the proceeds of the Company's initial public
offering of its common stock; consequently, the remaining balance of
unamortized debt issuance costs associated with the Company's term loan and
subordinated debt were written off, resulting in an extraordinary charge of
$572,000 (net of income tax effect of $381,000).

The carrying value of intangible assets is periodically reviewed by
management and impairment adjustments are recognized when the expected
undiscounted future operating cash flows to be derived from such intangible
assets are less than their carrying value. If such assets are considered to be
impaired the impairment to be recognized is measured by the amount by which the
carrying value of the assets exceeds the expected discounted future operating
cash flows arising from the asset. The Company believes that no impairment of
intangible assets has occurred (see Recent Accounting Pronouncements for
information on SFAS No. 142 "Goodwill and Other Intangibles" and its impact on
goodwill amortization).

F-8

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Interest Rate Swap

During fiscal 1999, the Company entered into an interest rate swap to manage
its term loan debt with the objective of minimizing the volatility of the
Company's borrowing cost. At May 31, 2000, the Company fixed the interest rate
on a notional amount of $12.6 million. Net payments or receipts under the
agreement were recorded in interest expense on a current basis. As a result of
the repayment of the term loan debt on December 20, 2000, the interest rate
swap agreement was terminated. The Company recognized interest expense upon the
termination of the agreement of approximately $218,000 during the year ended
May 31, 2001.

Stock-Based Compensation

The Company has adopted the disclosure-only provision of SFAS No. 123,
"Accounting for Stock-Based Compensation" for measurement and recognition of
employee stock-based transactions. SFAS No. 123 defines a fair value based
method of accounting for stock based compensation. Fair value of the stock
based awards is determined considering factors such as the exercise price, the
expected life of the award, the current price of the underlying stock and its
volatility, expected dividends on the stock, and the risk-free interest rate
for the expected term of the award. Under the fair value method, compensation
cost is measured at the grant date based on the fair value of the award and is
recognized over the service period.

The Company continues to measure compensation cost under the intrinsic value
method provided by Accounting Principles Board Opinion No. 25 ("APB 25") and to
include the required pro forma disclosures. Under the intrinsic value method,
compensation cost is measured at the grant date as the difference between the
estimated market value of the underlying stock and the exercise price.
Compensation cost is recognized ratably over the service period.

Income Taxes

The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes." Under this method, deferred income taxes are
recognized for the estimated tax consequences in future years of differences
between the tax bases of assets and liabilities and their financial reporting
amounts at each year-end based on enacted tax laws and statutory rates
applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established to reduce deferred tax
assets to the amount expected to be realized when, in management's opinion, it
is more likely than not that some portion of the deferred tax assets will not
be realized. The provision for income taxes represents current taxes payable
net of the change during the period in deferred tax assets and liabilities.

Recent Accounting Pronouncements

In March 2000, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 44 ("FIN 44"), entitled "Accounting for Certain Transactions
Involving Stock Compensation," which is an interpretation of APB 25. This
interpretation clarifies:

. the definition of an employee for purposes of applying APB 25;

. the criteria for determining whether a plan qualifies as a
noncompensatory plan;

F-9

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

. the accounting consequences of various modifications to the terms of a
previously fixed stock option or award; and

. the accounting for an exchange of stock compensation awards in a
business combination.

This interpretation was effective July 1, 2000. Management believes that the
adoption of FIN 44 did not have a material impact on the Company's consolidated
financial statements.

In June 2001, the FASB approved SFAS No. 142, "Goodwill and Other Intangible
Assets," which supercedes APB Opinion No. 17, "Intangible Assets". The FASB is
currently finalizing this statement with an expected issuance in July 2001.
Under its proposed changes, SFAS No. 142 establishes new standards for goodwill
acquired in a business combination and eliminates amortization of goodwill and
instead sets forth methods to periodically evaluate goodwill for impairment.
The Company expects to adopt this statement during the first quarter of fiscal
2002. During the year ended May 31, 2001, goodwill amortization totaled
$2.1 million.

Reclassifications

Certain reclassifications have been made to the prior period consolidated
financial statements to conform to the current year presentation.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Although management believes these estimates and assumptions
are adequate, actual results could differ from the estimates and assumptions
used.

3. Resources Connection LLC Acquisition

On April 1, 1999, the Company completed the acquisition of all of the
outstanding membership interests of LLC for approximately $55 million in cash,
excluding cash acquired and transaction costs. The Company has accounted for
this transaction under the purchase method of accounting. The purchase price
exceeded the estimated fair value of LLC's net tangible assets by approximately
$43.3 million, which was allocated to intangible assets, consisting of goodwill
of $42.8 and a noncompete agreement of $500,000. The results of operations of
LLC are included in the consolidated statements of income from the date of
acquisition.

In connection with this acquisition, the Company entered into a transition
services agreement ("Agreement") with the seller whereby the seller agreed to
provide certain services (as defined in the Agreement) to the Company at
negotiated terms during the period the Company maintained offices within the
seller's locations. The use of the services may not necessarily have been
provided at terms available from third parties. Therefore, the accompanying
financial statements of the Company may not necessarily be indicative of

F-10

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

the financial position and results that would have occurred if the Company had
undertaken such transactions with third parties. The Company's management was
unable to determine the availability and the cost of similar services had they
been provided by third parties. Total expenses under the Agreement were
approximately $300,000, $1.3 million and $64,000 for the period from November
16, 1998 to May 31, 1999 and the years ended May 31, 2000 and 2001,
respectively. At May 31, 1999 and 2000, the Company maintained 25 and
5 offices, respectively, within the seller's locations. The Company completed
all relocations by August 31, 2000.

4. Property and Equipment

Property and equipment consist of the following at May 31:

2000 2001
----------- ----------

Computers and equipment............................. $ 2,440,000 $3,458,000
Furniture........................................... 548,000 1,142,000
Leasehold improvements.............................. 523,000 666,000
----------- ----------
3,511,000 5,266,000
Less accumulated depreciation and amortization...... (315,000) (1,181,000)
----------- ----------
$ 3,196,000 $4,085,000
=========== ==========

5. Intangible Assets

Intangible assets consist of the following at May 31:

2000 2001
------------ -----------

Noncompete agreement.............................. $ 500,000 $ 500,000
Goodwill.......................................... 42,832,000 42,832,000
Debt issuance costs............................... 1,163,000
------------ -----------
44,495,000 43,332,000
Less accumulated amortization..................... (2,912,000) (4,887,000)
------------ -----------
$ 41,583,000 $38,445,000
============ ===========

F-11

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

6. Income Taxes

The following table represents the current and deferred income tax provision
for federal and state income taxes attributable to operations:

For The Period
From Inception,
November 16, 1998, For The Year For The
Through Ended Year Ended
May 31, 1999 May 31, 2000 May 31, 2001
------------------ ------------ ------------

Current
Federal...................... $ -- $3,570,000 $ 8,428,000
State........................ 6,000 862,000 1,854,000
-------- ---------- -----------
6,000 4,432,000 10,282,000
-------- ---------- -----------
Deferred
Federal...................... 439,000 (83,000) (610,000)
State........................ 120,000 15,000 (154,000)
-------- ---------- -----------
559,000 (68,000) (764,000)
-------- ---------- -----------
$565,000 $4,364,000 $ 9,518,000
======== ========== ===========

The components of the provision for deferred income taxes are as follows:

For The Period
From Inception,
November 16, 1998, For The Year For The Year
Through Ended Ended
May 31, 1999 May 31, 2000 May 31, 2001
------------------ ------------ ------------

Allowance for doubtful
accounts..................... $ 20,000 $(276,000) $(376,000)
Property and equipment........ (1,000) 67,000 58,000
Goodwill and noncompete
agreement.................... 47,000 266,000 259,000
Accrued liabilities........... 536,000 4,000 (673,000)
State taxes................... (43,000) (129,000) (32,000)
-------- --------- ---------
Net deferred income tax
provision.................... $559,000 $ (68,000) $(764,000)
======== ========= =========

The provision for income taxes from operations differs from the amount that
would result from applying the federal statutory rate as follows:

For The Period
From Inception,
November 16, 1998, For The For The
Through Year Ended Year Ended
May 31, 1999 May 31, 2000 May 31, 2001
------------------ ------------ ------------

Statutory tax rate............ 34.0% 34.0% 34.0%
State taxes, net of federal
benefit...................... 6.1% 5.4% 5.5%
Other, net.................... 1.5% 0.6% 0.5%
---- ---- ----
Effective tax rate............ 41.6% 40.0% 40.0%
==== ==== ====

F-12

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The components of the net deferred tax asset consist of the following as of
May 31:

2000 2001
---------- ----------

Deferred tax assets:
Allowance for doubtful accounts................. $ 657,000 $1,033,000
Accrued expenses................................ 583,000 1,257,000
State taxes..................................... 75,000 106,000
---------- ----------
1,315,000 2,396,000
---------- ----------
Deferred tax liabilities:
Property and equipment.......................... (83,000) (141,000)
Goodwill and noncompete agreement............... (312,000) (571,000)
---------- ----------
(395,000) (712,000)
---------- ----------
Net deferred tax asset............................ $ 920,000 $1,684,000
========== ==========

Current taxes payable were $282,000 and $328,000 at May 31, 2000 and 2001,
respectively, and is included as a component of other liabilities.

7. Accrued Salaries and Related Obligations

Accrued salaries and related obligations consist of the following as of May
31:

2000 2001
---------- -----------

Accrued salaries, bonuses and related
obligations.................................... $5,838,000 $12,507,000
Accrued vacation................................ 1,612,000 2,539,000
---------- -----------
$7,450,000 $15,046,000
========== ===========

8. Long-Term Obligations (Term Loan, Revolving Credit and Subordinated Notes
Payable)

In April 1999, in connection with the acquisition of LLC, the Company
entered into a $28 million credit agreement with a group of banks which
provided for an $18 million term loan facility and a $10 million revolving
credit facility, including a standby letter of credit feature (the "Credit
Agreement"). The Credit Agreement expires October 1, 2003. On December 20,
2000, the $11.9 million remaining balance on the term loan was repaid using a
portion of the proceeds from the Company's initial offering of its common
stock. Per the terms of the Credit Agreement, the term loan facility was
terminated upon the repayment. There were no outstanding borrowings on the
revolving credit facility at May 31, 2000 and 2001. Borrowings under the Credit
Agreement are collateralized by all of the Company's assets.

In November 2000, the Company and the group of participating banks amended
the Credit Agreement to provide for a reduction in the interest rate charged on
borrowings under the revolving credit facility. The amendment provides a range
of interest rates from the bank's Prime rate plus 0.5% to 1.5% or a Eurodollar-
based rate plus 1.5% to 2.5% dependent upon the Company's leverage ratio, as
defined, at the date of borrowing. Since the effective date of the amendment,
there have been no borrowings under the revolving credit facility. In addition,
an annual facility fee of 0.05% is payable on the unutilized portion of the $10
million revolving credit facility.

The Credit Agreement contains certain financial and other restrictive
covenants. These covenants include, but are not limited to, a restriction on
the amount of dividends that may be distributed to stockholders, and

F-13

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

maintaining defined levels of earnings before interest, taxes, depreciation and
amortization ("EBITDA"), a debt leverage ratio and an interest coverage ratio.
The Company was in compliance with these covenants as of May 31, 2000 and 2001.

To facilitate the acquisition of LLC in April 1999, the Company issued
$22,000,000 in 12% subordinated promissory notes (the "Notes") to certain
investors. The Notes and interest deferred under the terms of the Notes were
repaid on December 20, 2000 using a portion of the proceeds from the Company's
initial offering of its common stock.

9. Concentrations of Credit Risk

The Company maintains cash and cash equivalent balances with a high credit
quality financial institution. At times, such balances are in excess of
federally insured limits.

Financial instruments which potentially subject the Company to concentration
of credit risk consist primarily of trade receivables. However, concentrations
of credit risk are limited due to the large number of customers comprising the
Company's customer base and their dispersion across different business and
geographic areas. The Company monitors its exposure to credit losses and
maintains an allowance for anticipated losses. To reduce credit risk, the
Company performs credit checks on certain customers.

10. Stockholders' Equity

The Company has authorized for issuance 35,000,000 shares of common stock
with a $0.01 par value. At May 31, 2000 and 2001, there were 15,630,000, and
20,735,000 shares outstanding of common stock, respectively, all of which are
voting.

The Company has authorized for issuance 5,000,000 shares of preferred stock
with a $0.01 par value. The Board of Directors has the authority to issue
preferred stock in one or more series and to determine the related rights and
preferences. No shares of preferred stock were outstanding at May 31, 2000 and
2001.

The Company issued 5,630,000 shares of its common stock to founding
stockholders at a price of $0.01 per share (see Note 14).

In April 1999, the Company issued 10,000,000 units at a price of $3.20 per
unit, each unit consisting of one share of common stock at $1.00 per unit and a
subordinated promissory note of $2.20 per unit (see Note 8).

On December 14, 2000, the SEC declared the Company's registration statement
effective. On December 20, 2000, the Company received the proceeds from its
initial public offering of 5,000,000 shares of the Company's common stock at
$12 per share. The net proceeds of the offering (after underwriting discounts,
commissions and other transaction related expenses) were $54.1 million. Selling
stockholders sold 2,475,000 shares of the Company's common stock (including the
exercise of the underwriter's overallotment of 975,000 shares), but the Company
did not receive any of the proceeds from the sale of those shares.

During fiscal 2001, pursuant to the terms of the 1998 Employee Stock
Purchase Plan, the Company reacquired 123,000 shares of its common stock from
former employees. The Company subsequently resold 75,000 shares of common stock
for an aggregate purchase price of approximately $513,000 to certain employees
and consultants of the Company, of which $164,000 was financed by the Company
in exchange for promissory notes from the employees, bearing interest at 4.0%
with annual aggregate principal payments of approximately $55,000 through June
30, 2003.

F-14

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

11. Benefit Plan

The Company established a defined contribution 401(k) plan ("the plan") on
April 1, 1999, which covers all employees who have completed three months of
service and are age 21 or older. Participants may contribute up to 15% of their
annual salary up to the maximum amount allowed by statute. As defined in the
plan agreement, the Company may make matching contributions in such amount, if
any, up to a maximum of 6% of individual employees' annual salaries. The
Company, in its sole discretion, determines the matching contribution made from
year to year. To receive matching contributions, the employee must be employed
on the last day of the fiscal year. For the period from inception, November 16,
1998, through May 31, 1999 and the years ended May 31, 2000 and 2001, the
Company contributed approximately $101,000, $427,000 and $805,000 respectively,
to the plan.

12. Supplemental Disclosure Of Cash Flow Information

For the period and years ended May 31:

1999 2000 2001
------- ---------- -----------

Interest paid.............................. $ -- $1,824,000 $ 5,825,000
Income taxes paid.......................... $ -- $4,156,000 $ 9,853,000
Noncash investing and financing activities:
Deferred stock compensation.............. $37,000 $ 523,000 $ 1,387,000
Reissuance of treasury shares for notes
outstanding............................. $ -- $ -- $ 164,000

Acquisition of LLC, net of $5,033,000 cash acquired and including transaction costs:

1999
-----------

Fair values of noncash tangible assets acquired............... $12,534,000
Liabilities assumed and incurred.............................. (4,746,000)
Goodwill...................................................... 42,579,000
Noncompete agreement.......................................... 500,000
-----------
Cash paid..................................................... $50,867,000
===========

During the year ended May 31, 2001, the Company paid $225,000 of additional
consideration relating to the acquisition of LLC, which was allocated to the
purchase price and was included in accrued liabilities at May 31, 2000.

During the year ended May 31, 2000, the Company paid $271,000 in transaction
costs related to the acquisition of LLC, of which $244,000 had been included in
accrued liabilities at May 31, 1999.

F-15

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

13. Commitments and Contingencies

Lease Commitments

At May 31, 2001, the Company had operating leases, primarily for office
premises, expiring at various dates. At May 31, 2001, the Company had no
capital leases. Future minimum rental commitments under operating leases are as
follows:

Years Ending May 31:
--------------------

2002............................................................. $ 4,424,000
2003............................................................. 4,353,000
2004............................................................. 4,339,000
2005............................................................. 3,629,000
2006............................................................. 2,239,000
Thereafter....................................................... 4,816,000
-----------
Total........................................................ $23,800,000
===========

Rent expense for the period ended May 31, 1999 and for the years ended May
31, 2000 and 2001 totaled $306,000, $2,368,000 and $3,444,000, respectively.

Employment Agreements

The Company has employment agreements with certain key members of management
expiring between 2002 and 2004. These agreements provide the employees with a
specified severance amount depending on whether the employee is terminated with
or without good cause as defined in the agreement.

Registration Rights

The Company has entered into a stockholders agreement with certain
affiliates and management stockholders whereby the affiliates and management
stockholders each have three demand registration rights. The Company has the
right to postpone a demand registration under certain circumstances. The
Company has agreed to pay for two demand registrations of each of the
affiliates and the management stockholders up to an aggregate $500,000 for each
group.

14. Stock Based Compensation Plans

1998 Restricted Stock Purchase Plan

Under the terms of the Resources Connection, Inc. 1998 Restricted Stock
Purchase Plan (the "Purchase Plan"), a total of 5,630,000 shares of common
stock may be issued. The Purchase Plan gives the administrator authority to
grant awards to management-based employees at a price of at least 85% of the
fair market value of the stock (100% of the fair market value of the stock in
the case of an individual possessing more than 10% of the total outstanding
stock of the Company) on the date the related award was granted. An award under
the Purchase Plan gives the participant the right to acquire a specified number
of shares of common stock, at a specified price, for a limited period of time.
Awards under the Purchase Plan are generally nontransferable. The stock
purchased upon exercise of an award generally vests over five years. If the
participant's employment terminates before the participant's stock is fully
vested, the Company may repurchase the unvested stock for the price initially
paid by the participant. The administrator may accelerate the vesting of stock
acquired under the Purchase Plan in the event of a change in control.

F-16

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

In November 1998, management formed Resources Connection, Inc. (formerly RC
Transaction Corp.). In December 1998, 5,243,000 awards were granted and
exercised pursuant to the Purchase Plan at a price of $0.01 per share. In
January 1999 and February 1999, 297,000 and 90,000 awards, respectively, were
granted and exercised pursuant to the Purchase Plan at a price of $0.01 per
share. As of May 31, 2000, 1,880,000 of such shares of common stock were
vested. As of May 31, 2001, of the 5,630,000 shares granted and exercised under
the Purchase Plan 3,104,000 shares vested; 1,677,000 were unvested; 484,000
shares were sold; 317,000 were fully vested and controlled by terminated
employees and 48,000 shares had been repurchased from terminated employees and
were held as treasury shares. During the years ended May 31, 2000 and 2001,
repurchased unvested shares of common stock were sold to eligible employees
pursuant to the terms of the 1998 Restricted Stock Purchase Plan. The per share
weighted average grant date fair values of the unvested awards granted during
the period from inception, November 16, 1998 through May 31, 1999, and for the
years ended May 31, 2000 and 2001 were $0.02, $2.44 and $4.00, respectively.
The amount of unearned compensation recognized for stock re-sold under the
Purchase Plan totaled $37,000, $376,000 and $514,000 during the period ended
May 1999 and the years ended May 31, 2000 and 2001, respectively. Related
compensation expense totaled zero, $54,000 and $160,000 for the period ended
May 1999 and the years ended May 31, 2000 and 2001, respectively. The Company
does not anticipate granting any additional awards under the Purchase Plan.

Employee Stock Purchase Plan

In October 2000, the Company's board of directors adopted the Resources
Connection, Inc. Employee Stock Purchase Plan ("ESPP"), which was approved by
the Company's stockholders in October 2000. Under the terms of the ESPP, a
total of 1,200,000 shares of common stock may be issued. The ESPP allows for
qualified employees (as defined) to participate in the purchase of designated
shares of the Company's common stock at a price equal to the lesser of 85% of
the fair market value of common stock at the beginning or end of each semi-
annual stock purchase period. The Company had not issued any shares of common
stock pursuant to this plan during the year ended May 31, 2001.

1999 Long-Term Incentive Plan

Under the terms of the Resources Connection, Inc. 1999 Long-Term Incentive
Plan (the "Incentive Plan"), the Company is authorized to grant restricted
stock awards, incentive stock options ("ISOs"), nonqualified stock options
("NQSOs"), stock appreciation rights and bonus awards to directors, officers,
key employees, consultants and other agents. Under the terms of the Incentive
Plan, the option price for the ISOs and NQSOs shall not be less than the fair
market value of the shares of the Company's stock on the date of the grant. For
ISOs, the exercise price per share may not be less than 110% of the fair market
value of a share of common stock on the grant date for any individual
possessing more than 10% of the total outstanding stock of the Company.
Management's estimate of the fair market value of the shares of the Company's
common stock prior to December 15, 2000, was based upon a valuation of the
Company obtained from an independent appraisal firm. The maximum number of
shares of common stock available for grant is 5,040,000. Stock options granted
under the Incentive Plan become exercisable generally over periods of one to
five years and expire within a period of not more than ten years from the date
of grant. There were no options exercisable at May 31, 1999 and 2000. There
were 335,000 options exercisable at May 31, 2001 at a weighted-average exercise
price of $3.66 per share.

F-17

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

A summary of the option activity under the Incentive Plan is as follows:

Number of Weighted Weighted
Shares Average Average
Under Exercise Fair
Option Price Value
--------- -------- --------

Options outstanding at May 31, 1999............. -- $ -- $ --
Granted, above fair market value.............. 1,498,500 $ 4.01 $ 3.11
Granted, below fair market value.............. 330,000 $ 3.00 $ 3.44
---------
Options outstanding at May 31, 2000............. 1,828,500 $ 3.82
Granted, above fair market value.............. 112,000 $ 5.00 $ 4.50
Granted, at fair market value................. 1,356,600 $15.24 $15.24
Granted, below fair market value.............. 235,500 $ 4.87 $10.17
Exercised..................................... (104,605) $ 3.54
Cancelled..................................... (375,500) $ 5.15
---------
Options outstanding at May 31, 2001............. 3,052,495 $ 8.87
=========

The following table summarizes significant option groups outstanding as of
May 31, 2001 and related weighted average price and life information:

Options Outstanding Options Exercisable
-------------------------------------------------------------------------- --------------------------------
Number Weighted Average Number
Range of Exercise Outstanding Weighted Average Remaining Life Exercisable Weighted Average
Price Per Share at May 31, 2001 Exercise Price (Years) at May 31, 2001 Exercise Price
------------------- --------------- ---------------- ---------------- --------------- ----------------

$3.00 to $6.11.......... 1,806,895 $ 4.08 8.65 335,020 $3.66
$12.00 to $17.63........ 1,132,100 $15.16 9.53
$22.31 to $22.50........ 113,500 $22.35 9.84
--------- -------
3,052,495 $ 8.87 9.02 335,020 $3.66
========= =======

As of May 31, 2000 and 2001, the Company recorded deferred compensation
related to options granted to employees of $147,000 and $873,000, respectively,
representing the difference between the deemed fair market value of the common
stock, as determined for accounting purposes, and the exercise price of the
options at the date of grant. Of this amount, $7,000 and $219,000 in
amortization was recognized during the years ended May 31, 2000 and 2001,
respectively. The Company amortizes deferred compensation over the related
service period of the underlying options.

The Company has adopted the disclosure-only provisions of SFAS No 123. Had
compensation cost for the Company's Incentive Plan been determined based on the
fair value at the grant date for awards and consistent with the provisions of
SFAS No. 123, the Company's net income for the periods ended May 31, would have
been adjusted to the pro forma amounts indicated below:

1999 2000 2001
-------- ---------- -----------

Net Income:
As reported............................... $792,000 $6,546,000 $13,705,000
Pro forma................................. $792,000 $6,272,000 $10,827,000
Net Income Per Common Share--Diluted:
As reported............................... $ 0.09 $ 0.42 $ 0.71
Pro forma................................. $ 0.09 $ 0.40 $ 0.61

F-18

RESOURCES CONNECTION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

For purposes of computing the pro forma amounts, the fair value of stock-
based compensation was estimated using the Black-Scholes option-pricing model
with the following assumptions:

1999 2000 2001
----------- ----------- -----------

Weighted-average expected life
(years).............................. 7 7 7
Annual dividend per share............. None None None
Risk-free interest rate............... 6.47%-6.98% 6.47%-8.07% 4.98%-6.59%
Expected volatility................... 75% 75% 75%

Because the determination of the fair value of all options granted includes
the factors described in the preceding paragraph, and because additional option
grants are expected to be made each year, the above pro forma disclosures are
not likely to be representative of the pro forma effect on reported net income
for future years.

15. Segment Information and Enterprise Reporting

No single customer accounted for more than 3% of revenue during the year
ended May 31, 2001 and no more than 4% for the period ended May 31, 1999 and
for the year ended May 31, 2000.

The Company has adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information". The Company operates in one reportable
segment as it provides experienced accounting and finance, human capital
management and information technology professionals to clients on a project-by-
project basis. Substantially all of the Company's assets are located within the
United States. For the years ended May 31, 2000, the first year the Company
commenced foreign operations, and May 31, 2001, revenue from the Company's
foreign operations comprised less than 1% of the Company's consolidated
revenue.

16. Related Party Transactions

In April 1999, the Company issued $22,000,000 in 12% subordinated promissory
notes to certain investors (see Note 8).

On May 1, 1999, a member of management received a loan of $200,000 from the
Company. The loan is interest free and matures on April 1, 2007. During the
year ended May 31, 2000, $50,000 of this loan was forgiven. At May 31, 2000 and
2001, $150,000 of the receivable was outstanding.

F-19

REPORT OF INDEPENDENT ACCOUNTANTS

To the Members
of Resources Connection LLC

In our opinion, the accompanying statements of income and of cash flows of
Resources Connection LLC present fairly, in all material respects, the results
of its operations and its cash flows for the period from June 1, 1998 through
March 31, 1999, in conformity with accounting principles generally accepted in
the United States. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether these statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in these statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audit of
these statements provides a reasonable basis for the opinion expressed above.

As discussed in Notes 1, 2, and 3 to these financial statements, the Company
entered into significant related party transactions with its member, Deloitte &
Touche LLP. The accompanying historical financial statements of the Company may
not necessarily be indicative of the results that would have occurred if the
Company had undertaken such transactions with an unrelated third party.

PricewaterhouseCoopers LLP

Costa Mesa, California
August 6, 1999

F-20

RESOURCES CONNECTION LLC

STATEMENT OF INCOME

For The Period June 1, 1998 Through March 31, 1999

Net revenues....................................................... $55,438,000
Cost of revenues................................................... 31,253,000
-----------
Gross profit..................................................... 24,185,000
Selling, general and administrative expenses....................... 17,071,000
Depreciation and amortization expense.............................. 118,000
-----------
Net income....................................................... $ 6,996,000
===========

The accompanying notes are an integral part of these financial statements.

F-21

RESOURCES CONNECTION LLC

STATEMENT OF CASH FLOWS

For The Period June 1, 1998 Through March 31, 1999

Cash flows from operating activities:
Net income..................................................... $ 6,996,000
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization................................ 118,000
Bad debt expense............................................. 533,000
Changes in operating assets and liabilities:
Accounts receivable........................................ (6,737,000)
Receivable from member..................................... (10,500,000)
Payable to member.......................................... 8,541,000
Prepaids and other assets.................................. (297,000)
Accounts payable and accrued expenses...................... 869,000
Accrued salaries and related obligations................... 2,323,000
Other liabilities.......................................... 182,000
------------
Net cash provided by operating activities................ 2,028,000
------------
Cash flows from investing activities:
Purchases of property and equipment............................ (163,000)
------------
Net cash used in investing activities.................... (163,000)
------------
Net increase in cash..................................... 1,865,000
Cash and cash equivalents at beginning of year................... 3,168,000
------------
Cash and cash equivalents at end of year......................... $ 5,033,000
============

The accompanying notes are an integral part of these financial statements.

F-22

RESOURCES CONNECTION LLC

NOTES TO FINANCIAL STATEMENTS

1. Description Of The Company And Its Business:

Resources Connection LLC (the "Company") is a Delaware organized limited
liability company and provides high-end professional services to a variety of
industries and enterprises throughout the United States. The Company provides
clients with experienced professionals in accounting, finance, tax and
information technology on a project-by project-basis.

The Company was formed in September 1996. The Company is 99% owned by
Deloitte & Touche LLP ("D&T") and 1% owned by Deloitte & Touche Acquisition
Company LLC (collectively referred to as the "Members"). The Members do not
have any liability for the obligations or liabilities of the Company except to
the extent provided for in the Delaware Limited Liability Company Act (the
"Act"). The Company will dissolve upon the first to occur of, among others, the
following: (a) the written consent of the Members; (b) the resignation,
expulsion, bankruptcy or dissolution of a Member or the occurrence of any other
event under the Act which terminates the continued membership of a Member in
the Company, unless the remaining Member agrees in writing within 90 days to
continue the business of the Company; or (c) December 31, 2095.

In the normal course of business, the Company has been supplied with a
variety of services by D&T as well as having supplied a variety of services to
D&T that are substantial in amount. The accompanying financial statements have
been prepared from the separate records maintained by the Company; however, the
services supplied by and to D&T may not necessarily have been provided at terms
available from unrelated entities. Therefore, the accompanying financial
statements of the Company may not necessarily be indicative of the conditions
that would have existed if the Company had operated as an independent entity.

The following table summarizes the approximate amount of services and
related allocated expenses charged to the Company for services provided by D&T.
Charges for such services are included in selling, general and administrative
expenses in the accompanying statement of income:

For The Period
June 1, 1998
Through
March 31, 1999
--------------

Occupancy.................................................... $ 767,000
Computer charges............................................. 155,000
Telephone.................................................... 34,000
Administrative salaries...................................... 250,000
Other charges................................................ 203,000
----------
Total allocated charges.................................... $1,409,000
==========

The financial statements include all necessary personnel costs and pro rata
allocations of overhead from D&T on a basis which management believes
represents a reasonable allocation of such costs.

D&T processes and pays the Company's accounts payable, which obligation is
offset by periodic sweeps of the Company's separately maintained bank account,
resulting in a net receivable due from D&T and a net payable due to D&T.
Interest is not charged for any such amounts due to or from D&T.

Revenue includes fees charged for services provided directly to D&T of
approximately $4.9 million for the approximate ten-month period ended March 31,
1999.

The Company's fiscal year consists of 52 or 53 weeks, ending on the Saturday
nearest the last day of May in each year. For convenience, all references
herein to periods are to periods ended May 31. The period ended March 31, 1999
was 44 weeks long.

F-23

RESOURCES CONNECTION LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

2. Summary Of Significant Accounting Policies:

Revenue Recognition:

Revenues are recognized when services are rendered by the Company's
professional staff. Conversion fees are recognized in certain circumstances
when one of the Company's professional staff accepts an offer of permanent
employment from a client. Conversion fees were less than 4% of revenues for the
period ended March 31, 1999. All costs of compensating the Company's
professional staff are the responsibility of the Company and are included in
direct cost of services.

Depreciation And Amortization:

Depreciation and amortization is computed using the straight-line method
over the estimated useful lives of the related assets which range from 3 to 10
years. Leasehold improvements are amortized using the straight-line method over
the estimated useful life of the asset or the term of the lease, whichever is
shorter. Costs for normal repairs and maintenance are expensed to operations as
incurred, while renewals and major refurbishments are capitalized.

Taxes:

As a limited liability company, income taxes on any income or losses
realized by the Company are the obligation of its Members and, accordingly, no
provision for income taxes has been recorded in the financial statements.

Use Of Estimates:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Although management believes these estimates and assumptions
are adequate, actual results could differ from the estimates and assumptions
used.

3. Related Party Transactions:

Lease Arrangements:

Specific amendments to D&T lease agreements were negotiated for separate
office space in two of the Company's locations. The Company reimburses D&T for
the rent incurred under these amended lease agreements. D&T allocates rent to
the Company for all other locations, which may not necessarily reflect terms
available from unrelated parties. Total rent expense, including allocations as
included in Note 1, was approximately $828,000 for the approximate ten-month
period ended March 31, 1999.

Retirement Plan:

The Company participates in D&T's defined contribution 401(k) plan ("the
plan"), which covers administrative employees who have completed one year of
service and are age 21 or older. Participants may contribute up to 15% of their
annual salary up to the maximum allowed by statute. As defined in the plan
agreement, the Company is obligated to match 10% of employee contributions to a
maximum of 6% of individual employees' annual salaries; the Company may, at its
discretion, match up to an additional 15% of employee contributions to a
maximum of 6% of individual employees' annual salaries. For the approximate
ten-month period ended March 31, 1999, the Company contributed approximately
$98,000 to the plan.

F-24

RESOURCES CONNECTION LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

Other:

The Company has entered into other significant related party transactions
with its Member, D&T. See Note 1 for further detail.

4. Subsequent Events:

On April 1, 1999, D&T sold the Company to management of the Company and a
group of investors. All of the outstanding membership interests of the Company
were sold for approximately $55 million in cash, excluding cash acquired and
transaction costs.

F-25

[inside back cover]

[small logo]

[red background]

Resources Connection, Inc., is a professional services firm that provides
experienced accounting and finance, human resources management and information
technology professionals to clients on a project-by-project basis.

[picture of part of a building]

[LOGO OF RESOURCES CONNECTION]

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth all expenses payable by Resources Connection,
Inc. (the "Registrant") in connection with the sale of the common stock being
registered. All of the amounts shown are estimates, except for the SEC
registration fee and the NASD filing fee.

Amount to
Be Paid
---------

Registration fee.................................................. $ 27,160
NASD filing fee................................................... 11,364
Blue sky qualification fees and expenses.......................... 5,000*
Printing and engraving expenses................................... 200,000*
Legal fees and expenses........................................... 200,000*
Accounting fees and expenses...................................... 120,000*
Transfer agent and registrar fees................................. 10,000*
Miscellaneous..................................................... 26,476*
--------
Total........................................................... $600,000*
========

--------
* Estimated.

Item 14. Indemnification Of Officers And Directors

Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act of 1933, as amended (the "Securities Act").

The Registrant's Second Restated Certificate of Incorporation and Amended
and Restated Bylaws include provisions to (i) eliminate the personal liability
of its directors and officers for monetary damages resulting from breaches of
their fiduciary duty to the extent permitted by Section 102(b)(7) of the
General Corporation Law of Delaware (the "Delaware Law") and (ii) require the
Registrant to indemnify its directors and officers to the fullest extent
permitted by Section 145 of the Delaware Law, including circumstances in which
indemnification is otherwise discretionary. Pursuant to Section 145 of the
Delaware Law, a corporation generally has the power to indemnify its present
and former directors, officers, employees and agents against expenses incurred
by them in connection with any suit to which they are, or are threatened to be
made, a party by reason of their serving in such positions so long as they
acted in good faith and in a manner they reasonably believed to be in, or not
opposed to, the best interests of the corporation and with respect to any
criminal action, they had no reasonable cause to believe their conduct was
unlawful. The Registrant believes that these provisions are necessary to
attract and retain qualified persons as directors and officers. These
provisions do not eliminate the directors' duty of care, and, in appropriate
circumstances, equitable remedies such as injunctive or other forms of non-
monetary relief will remain available under Delaware Law. In addition, each
director will continue to be subject to liability for breach of the director's
duty of loyalty to the Registrant, for acts or omissions not in good faith or
involving intentional misconduct, for knowing violations of law, for acts or
omissions that the director believes to be contrary to the best interests of
the Registrant or its stockholders, for any transaction from which the director
derived an improper personal benefit, for acts or omissions involving a
reckless disregard for the director's duty to the Registrant or its
stockholders when the director was aware or should have been aware of a risk of
serious injury to the Registrant or its stockholders, for acts or omissions
that constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the Registrant or its stockholders, for
improper transactions between the director and the Registrant and for improper
distributions to stockholders and loans to directors and officers. The
provision also does not affect a director's responsibilities under any other
law, such as the federal securities law or state or federal environmental laws.

II-1

At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or director.

The Registrant has applied for an insurance policy covering the officers and
directors of the Registrant with respect to certain liabilities, including
liabilities arising under the Securities Act or otherwise.

Item 15. Recent Sales of Unregistered Securities

Appropriate legends were affixed to the stock certificates issued in the
transactions described below. All recipients had adequate access, through
employment or other relationships, to information about the Registrant.

(a) In November 1998, we formed RC Transaction Corp. (renamed Resources
Connection, Inc.). In December 1998, the Registrant issued 5,243,000 shares of
its common stock to certain members of its management pursuant to the 1998
Employee Stock Purchase Plan for an aggregate purchase price of $52,430.
Between January 1999 and February 1999, the Registrant issued and sold the
remaining 387,000 shares of common stock to certain members of our management
for an aggregate purchase price of $3,870. Between February 1999 and August
2000, pursuant to the terms of the 1998 Employee Stock Purchase Plan the
Registrant reacquired 388,000 shares of its common stock from employees whose
employment was being terminated. The Registrant resold these reacquired shares
to certain employees for an aggregate purchase price of $264,000. Since August
2000, pursuant to the terms of the 1998 Employee Stock Purchase Plan, the
Registrant reacquired 69,000 shares of its common stock from employees whose
employment was being terminated. The Registrant relied on the exemption
provided by Rule 701 of the General Regulations under the Securities Act of
1933, as amended.

(b) On and around April 1, 1999, in connection with the management-led
buyout, the Registrant issued and sold 9,855,260 shares of common stock and
144,740 shares of its Class B common stock for an aggregate purchase price of
$10,000,000 to the following investors:

. Four entities affiliated with Evercore Partners L.L.C.;

. Richard Gersten;

. Paul Lattanzio;

. Gerald Rosenfeld;

. Mainz Holdings Ltd.;

. BT Capital Investors, L.P. (subsequently changed to DB Capital
Investors, L.P.);

. BancBoston Investments Inc.; and

. Resources Connection management and employees.

Simultaneously, the Registrant issued and sold subordinated notes, bearing
12% interest per annum with a maturity date of April 15, 2004, in an aggregate
principal amount of $22,000,000 to the same group of investors. The Registrant
relied on the exemption provided by Section 4(2) under the Securities Act and
Regulation D promulgated thereunder. The recipients of the above-described
securities represented their intention to acquire the securities for investment
only and not with a view to distribution thereof.

(c) Between June 17, 1999 and December 14, 2000, the Registrant granted
stock options to certain of its employees pursuant to our 1999 Long-Term
Incentive Plan. The Registrant relied on the exemption provided by Rule 701 of
the General Regulations under the Securities Act of 1933, as amended.

II-2

Item 16. Exhibits and Financial Statement Schedule

(a) Exhibits.

Exhibit
Number Description of Document
------- -----------------------

1.1* Form of Underwriting Agreement.

3.1 Second Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form
10-Q for the quarter ended November 30, 2000).

3.2 Amended and Restated Bylaws, as amended (incorporated by reference to
Exhibit 3.4 to the Registrant's Registration Statement on Form S-1
filed on September 1, 2000 (File No. 333-45000)).

4.1 Stockholders Agreement, dated April 1, 1999, between Resources
Connection, Inc. and certain stockholders of Resources Connection,
Inc. (incorporated by reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form S-1 filed on September 1, 2000
(File No. 333-45000)).

4.2 Stockholders Agreement, dated December 11, 2000, between Resources
Connection, Inc. and certain stockholders of Resources Connection,
Inc. (incorporated by reference to Exhibit 4.2 to the Registrant's
Amendment No. 7 to the Registrant's Registration Statement on Form S-
1 filed on December 12, 2000 (File No. 333-45000)).

4.3 Specimen Stock Certificate (incorporated by reference to Exhibit 4.3
to the Registrant's Amendment No. 7 to the Registrant's Registration
Statement on Form S-1 filed on December 12, 2000 (File No. 333-
45000)).

5.1* Opinion of O'Melveny & Myers LLP.

10.1 Resources Connection, Inc. 1998 Employee Stock Purchase Plan
(incorporated by reference to Exhibit 10.1 to the Registrant's
Registration Statement on Form S-1 filed on September 1, 2000 (File
No. 333-45000)).

10.2 Resources Connection, Inc. 1999 Long-Term Incentive Plan (incorporated
by reference to Exhibit 10.2 to the Registrant's Registration
Statement on Form S-1 filed on September 1, 2000 (File No. 333-
45000)).

10.3 Employment Agreement, dated April 1, 1999, between Resources
Connection, Inc. and Donald B. Murray (incorporated by reference to
Exhibit 10.3 to the Registrant's Registration Statement on Form S-1
filed on September 1, 2000 (File No. 333-45000)).

10.4 Employment Agreement, dated April 1, 1999, between Resources
Connection, Inc. and Stephen J. Giusto (incorporated by reference to
Exhibit 10.4 to the Registrant's Registration Statement on Form S-1
filed on September 1, 2000 (File No. 333-45000)).

10.5 Employment Agreement, dated April 1, 1999, between Resources
Connection, Inc. and Karen M. Ferguson (incorporated by reference to
Exhibit 10.5 to the Registrant's Registration Statement on Form S-1
filed on September 1, 2000 (File No. 333-45000)).

10.6 Employment Agreement, dated April 1, 1999, between Resources
Connection, Inc. and Brent M. Longnecker (incorporated by reference
to Exhibit 10.6 to the Registrant's Registration Statement on Form S-
1 filed on September 1, 2000 (File No. 333-45000)).

10.7 Credit Agreement, dated April 1, 1999, by and among Resources
Connection, Inc., RCLLC Acquisition Corp., Resources Connection LLC,
Bankers Trust Company, as collateral agent (incorporated by reference
to Exhibit 10.7 to the Registrant's Registration Statement on Form S-
1 filed on September 1, 2000 (File No. 333-45000)).

II-3

Exhibit
Number Description of Document
------- -----------------------

10.8 Pledge Agreement, dated as of April 1, 1999, made by each of Resources
Connection, Inc., RCLLC Acquisition Corp. and Resources Connection
LLC to Bankers Trust Company, as collateral agent (incorporated by
reference to Exhibit 10.8 to the Registrant's Registration Statement
on Form S-1 filed on September 1, 2000 (File No. 333-45000)).

10.9 Security Agreement, dated April 1, 1999, among Resources Connection,
Inc., certain of its subsidiaries and Bankers Trust Company, as
collateral agent (incorporated by reference to Exhibit 10.9 to the
Registrant's Registration Statement on Form S-1 filed on September 1,
2000 (File No. 333-45000)).

10.10 Form of 12.0% Junior Subordinated Promissory Note (incorporated by
reference to Exhibit 4.4 to Amendment No. 2 to the Registrant's
Registration Statement filed on November 13, 2000 (File No. 333-
45000)).

10.11 Sublease, dated as of March 1, 2000, by and between Enterprise Profit
Solutions Corporation and Resources Connection LLC (incorporated by
reference to the Exhibit 10.10 to the Registrant's Registration
Statement on Form S-1 filed on September 1, 2000 (File No. 333-
45000)).

10.12 Resources Connection, Inc. Employee Stock Purchase Plan (incorporated
by reference to Exhibit 10.11 to Amendment No. 2 to the Registrant's
Registration Statement on Form S-1 filed on November 13, 2000 (File
No. 333-45000)).

10.13 Purchase Agreement, dated April 1, 1999, between Deloitte & Touche
LLP, Deloitte & Touche Acquisitions Company LLC, Resources Connection
LLC and Resources Connection, Inc. (incorporated by reference to
Exhibit 10.12 to Amendment No. 2 to the Registrant's Registration
Statement on Form S-1 filed on November 13, 2000 (File No. 333-
45000)).

10.14 Investment Agreement, dated April 1, 1999, between Resources
Connection, Inc., certain entities affiliated with Evercore Partners,
L.L.C. and certain other investors (incorporated by reference to
Exhibit 10.13 to Amendment No. 2 to the Registrant's Registration
Statement on Form S-1 filed on November 13, 2000 (File No. 333-
45000)).

10.15 Transition Services Agreement, dated April 1, 1999, between Deloitte &
Touche LLP, Resources Connection, Inc. and Resources Connection LLC
(incorporated by reference to Exhibit 10.14 to Amendment No. 2 to the
Registrant's Registration Statement on Form S-1 filed on November 13,
2000 (File No. 333-45000)).

10.16** Agreement of Lease, dated October 23, 2000, between 500-512 Seventh
Avenue Limited Partnership and Resources Connection LLC.

10.17** Lease, dated January 1, 2001, between One Town Center Associates and
Resources Connection LLC.

21.1** List of Subsidiaries.

23.1* Consent of Independent Accountants.

23.2 Consent of O'Melveny & Myers LLP. Reference is made to Exhibit 5.1.

24.1** Power of Attorney.

--------

* Filed herewith.

** Previously filed.

II-4

(b) Financial Statement Schedules.

RESOURCES CONNECTION, INC.
Report of Independent Accountants on Financial Statement Schedule
Schedule II -- Valuation and Qualifying Accounts for the period from
inception, November 16, 1998, through May 31, 1999 and for each of the
two years in the period ended May 31, 2001

RESOURCES CONNECTION LLC
Report of Independent Accountants on Financial Statement Schedule
Schedule II -- Valuation and Qualifying Accounts for the period from
June 1, 1998 through March 31, 1999

All other schedules are omitted because they are not required, are not
applicable or the information is included in our financial statements or notes
thereto.

Item 17. Undertakings

The Registrant hereby undertakes to provide to the underwriter at the
closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") may be permitted to
directors, officers and controlling persons of the registrant pursuant to
provisions described in Item 14 or otherwise, the Registrant has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Exchange Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Exchange Act and will be governed by the final adjudication of
such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Exchange Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Exchange Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-5

REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE

To the Stockholders and the Board of Directors of Resources Connection, Inc.

Our audits of the consolidated financial statements of Resources Connection,
Inc. referred to in our report dated July 2, 2001 appearing in this
registration statement on Form S-1 also included an audit of the financial
statement schedule listed in Item (16)(b) of this Form S-1. In our opinion,
this financial statement schedule presents fairly, in all material respects,
the information set forth therein when read in conjunction with the related
consolidated financial statements.

PricewaterhouseCoopers LLP

Orange County, California
July 2, 2001

II-6

RESOURCES CONNECTION, INC.

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

Purchase of
Beginning Charged to Resources Ending
Balance Operations Write-offs Connection LLC Balance
---------- ---------- ----------- -------------- ----------

Allowance for Doubtful
Accounts
Period from November
16, 1998 (date of
inception) to May 31,
1999................. $ -- $ 200,000 $ (248,000) $955,000 $ 907,000
Year Ended May 31,
2000................. $ 907,000 $1,048,000 $ (369,000) $ -- $1,586,000
Year Ended May 31,
2001................. $1,586,000 $2,110,000 $(1,246,000) $ -- $2,450,000

II-7

REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE

To the Members of Resources Connection LLC

Our audit of the financial statements of Resources Connection LLC referred
to in our report dated August 6, 1999 appearing in this registration statement
on Form S-1 also included an audit of the financial statement schedule listed
in Item (16)(b) of this Form S-1. In our opinion, this financial statement
schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related financial statements.

/s/ PricewaterhouseCoopers LLP

Costa Mesa, California
August 6, 1999

II-8

RESOURCES CONNECTION LLC

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

Beginning Charged to Ending
Balance Operations Write-offs Balance
--------- ---------- ---------- --------

Allowance for Doubtful Accounts
Period from June 1, 1998 to March
31, 1999........................... $422,000 $533,000 $ -- $955,000

II-9

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Costa
Mesa, County of Orange, State of California, on August 7, 2001.

/s/ Donald B. Murray
By: _________________________________
Donald B. Murray
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

* Chairman of the Board, Chief August 7, 2001
_________________________________ Executive Officer, President and
Donald B. Murray Director (Principal Executive
Officer)

* Chief Financial Officer, August 7, 2001
_________________________________ Executive Vice President of
Stephen J. Giusto Corporate Development, Secretary
and Director (Principal
Financial and Accounting
Officer)

* Executive Vice President and August 7, 2001
_________________________________ Director
Karen M. Ferguson

* Director August 7, 2001
_________________________________
David G. Offensend

* Director August 7, 2001
_________________________________
Gerald Rosenfeld

* Director August 7, 2001
_________________________________
Leonard Schutzman

* Director August 7, 2001
_________________________________
John C. Shaw

* Director August 7, 2001
_________________________________
C. Stephen Mansfield

/s/ Donald B. Murray
*By: _____________________________
Donald B. Murray
Attorney-in-Fact

II-10

EXHIBIT INDEX

Exhibit
Number Description of Document
------- -----------------------

1.1* Form of Underwriting Agreement.

3.1 Second Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form
10-Q for the quarter ended November 30, 2000).

3.2 Amended and Restated Bylaws, as amended (incorporated by reference to
Exhibit 3.4 to the Registrant's Registration Statement on Form S-1
filed on September 1, 2000 (File No. 333-45000)).

5.1* Opinion of O'Melveny & Myers LLP.

II-11

Exhibit
Number Description of Document
------- -----------------------

10.16** Agreement of Lease, dated October 23, 2000, between 500-512 Seventh
Avenue Limited Partnership and Resources Connection LLC.

10.17** Lease, dated January 1, 2001, between One Town Center Associates and
Resources Connection LLC.

21.1** List of Subsidiaries.

23.1* Consent of Independent Accountants.

23.2 Consent of O'Melveny & Myers LLP. Reference is made to Exhibit 5.1.

24.1** Power of Attorney.

--------

* Filed herewith.

** Previously filed.

II-12