Edgar Filing: RESOURCES CONNECTION INC

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

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RESOURCES CONNECTION, INC.
(Name of Registrant as Specified in Its Charter)

N/A
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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[LOGO FOR RESOURCES CONNECTION]

September 7, 2001

Dear Stockholder:

On behalf of the Board of Directors, you are cordially invited to attend the
2001 Annual Meeting of Stockholders of Resources Connection, Inc. to be held at
the Westin South Coast Plaza Hotel, located at 686 Anton Boulevard, Costa Mesa,
California, on October 5, 2001 at 10:00 a.m., Pacific Daylight Time. The formal
notice of the Annual Meeting appears on the following page. The attached Notice
of Annual Meeting and Proxy Statement describe the matters that we expect to be
acted upon at the Annual Meeting.

This is our first solicitation of proxies for our Annual Meeting of
Stockholders since the initial public offering of our common stock in December
2000.

During the Annual Meeting, stockholders will view a presentation by
Resources Connection and have the opportunity to ask questions. Whether or not
you plan to attend the Annual Meeting, it is important that your shares be
represented. Regardless of the number of shares you own, please sign and date
the enclosed proxy card and promptly return it to us in the enclosed postage-
prepaid envelope. If you sign and return your proxy card without specifying
your choices, your shares will be voted in accordance with the recommendations
of the Board of Directors contained in the Proxy Statement.

We look forward to seeing you on October 5, 2001, and urge you to return
your proxy card as soon as possible.

Sincerely,

/s/ Donald B. Murray

Donald B. Murray
President, Chief Executive Officer and
Chairman of the Board

RESOURCES CONNECTION, INC.
695 TOWN CENTER DRIVE,
SUITE 600
COSTA MESA, CALIFORNIA 92626
(714) 430-6400
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 5, 2001

To the Stockholders of Resources Connection, Inc.:

The Annual Meeting of Stockholders of Resources Connection, Inc. will be
held at 10:00 a.m., Pacific Daylight Time, on October 5, 2001, at the Westin
South Coast Plaza Hotel, located at 686 Anton Boulevard, Costa Mesa,
California, for the following purposes:

1. To vote for the re-election of Karen M. Ferguson, C. Stephen
Mansfield and Leonard Schutzman to our Board of Directors for a three-year
term expiring at the Annual Meeting in 2004;

2. To approve an amendment to the Resources Connection 1999 Long-Term
Incentive Plan; and

3. To transact such other business as may properly come before the
meeting or any adjournments thereof.

The Board of Directors has fixed the close of business on September 4, 2001
as the record date for determining stockholders entitled to notice of, and to
vote at, the meeting.

By order of the Board of Directors,

/s/ STEPHEN J. GIUSTO
Stephen J. Giusto
Secretary

Costa Mesa, California
September 7, 2001

ALL STOCKHOLDERS ARE URGED TO ATTEND THE MEETING IN PERSON OR BY PROXY. WHETHER
OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE, SIGN AND DATE
THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE FURNISHED FOR THAT PURPOSE.

PROXY STATEMENT

We are sending this Proxy Statement to you, the stockholders of Resources
Connection, Inc., a Delaware corporation, as part of our Board of Directors'
solicitation of proxies to be voted at our Annual Meeting of Stockholders to be
held at 10:00 a.m., Pacific Daylight Time, on October 5, 2001, at the Westin
South Coast Plaza Hotel, located at 686 Anton Boulevard, Costa Mesa,
California, and at any adjournments thereof. This Proxy Statement and
accompanying form of proxy were first sent to stockholders on or about
September 7, 2001.

We are enclosing a copy of our 2001 Annual Report to Stockholders, which
includes our fiscal 2001 financial statements. The Annual Report is not,
however, part of the proxy materials.

ABOUT THE MEETING

What am I voting on?

At the Annual Meeting, our stockholders will be voting on:

. the re-election of three directors (Karen M. Ferguson, C. Stephen
Mansfield and Leonard Schutzman); and

. a proposed amendment to the 1999 Long-Term Incentive Plan.

How does the Board of Directors recommend I vote on the proposals?

Our Board of Directors recommends you vote FOR each of the nominees and FOR
the amendment to the 1999 Long-Term Incentive Plan.

Who is entitled to vote at the meeting?

Stockholders of record as of the close of business on September 4, 2001,
which is known as the record date, are entitled to vote.

How do I vote?

Sign and date each proxy card you receive and return it in the postage-
prepaid envelope. If you return your signed proxy card but do not mark the
boxes showing how you wish to vote, your shares will be voted FOR each of the
director nominees and FOR the proposed amendment to the 1999 Long-Term
Incentive Plan. You have the right to revoke your proxy at any time before your
shares are actually voted at the Annual Meeting by:

. notifying our corporate secretary in writing;

. signing and returning a later-dated proxy card; or

. voting in person at the Annual Meeting.

How will voting on any other business be conducted?

Other than the two proposals described in this Proxy Statement, we know of
no other business to be considered at the Annual Meeting. However, if any other
matters are properly presented at the meeting, your signed proxy card
authorizes Donald B. Murray and Stephen J. Giusto, our Chief Executive Officer
and Chief Financial Officer, respectively, to vote on those matters according
to their best judgment.

Who will count the vote?

Representatives of American Stock Transfer & Trust, the independent
inspector of election, will count the vote.

What does it mean if I receive more than one proxy card?

It probably means your shares are registered differently and are in more
than one account. Sign and return all proxy cards to ensure that all your
shares are voted.

How many shares can vote?

As of the record date, 21,145,680 shares of our common stock were issued and
outstanding. Holders of our common stock as of the record date are entitled to
one vote per share for each matter before the meeting.

What vote is required to approve the proposals?

Re-election of Directors. A plurality of the shares of common stock voted in
person or by proxy is required to elect the nominees for directors. A plurality
means that the three nominees receiving the largest number of votes cast will
be elected. Each stockholder will be entitled to vote the number of shares of
common stock held as of the record date by that stockholder for each director
position to be filled. Stockholders will not be allowed to cumulate their votes
in the election of directors. A properly executed proxy marked "WITHHOLD
AUTHORITY" with respect to the election of one or more directors will not be
voted with respect to the director or directors indicated, although it will be
counted for purposes of determining whether there is a quorum.

Amendment to 1999 Long-Term Incentive Plan. An affirmative vote by the
holders of a majority of our outstanding shares of common stock present, or
represented by proxy, and entitled to vote is required to approve the proposed
amendment to the 1999 Long-Term Incentive Plan. A properly executed proxy
marked "ABSTAIN" with respect to the option plan proposal will not be voted,
although it will be counted for purposes of determining whether there is a
quorum. Accordingly, an abstention will have the same effect as a vote against
the option plan proposal.

What constitutes a quorum?

A quorum is a majority of the voting power of the shares entitled to vote at
the Annual Meeting. Because there were 21,145,680 eligible votes as of the
record date, we will need at least 10,572,841 votes present in person or by
proxy at the Annual Meeting for a quorum to exist.

What happens if my shares are held by a broker or nominee?

If you are the beneficial owner of shares held in "street name" by a broker
or nominee, the broker or nominee, as the record holder of the shares, is
required to vote those shares in accordance with your instructions. If you do
not give instructions to the broker or nominee, that person will nevertheless
be entitled to vote the shares with respect to "discretionary" items but will
not be permitted to vote the shares with respect to "non-discretionary" items
(in which case, the shares will be treated as broker non-votes).

How will "broker non-votes" be treated?

"Broker non-votes" are shares held by brokers or nominees for which the
broker or nominee lacks discretionary power to vote and never received specific
voting instructions from the beneficial owner of the shares. Broker non-votes
are counted for purposes of calculating a quorum. However, when the broker or
nominee notes on the proxy card that it lacks discretionary authority to vote
shares on a particular matter, those shares will not count FOR or AGAINST that
matter.

Who can attend the Annual Meeting?

All stockholders as of September 4, 2001, can attend the Annual Meeting. If
your shares are held through a broker and you would like to attend, please
either (1) write Kate W. Duchene, our Chief Legal Officer, at 695 Town Center
Drive, Suite 600, Costa Mesa, California 92626; or (2) bring to the meeting a
copy of your brokerage account statement or an omnibus proxy (which you can
obtain from your broker).

When must notice of business to be brought before an annual meeting be given
and when are stockholder proposals due for the 2002 annual meeting?

Advance Notice Procedures. Under our bylaws, business may be brought before
an annual meeting if it is specified in the notice of the meeting or is
otherwise brought before the meeting by or at the discretion of our Board of
Directors or by a stockholder entitled to vote who has delivered notice to our
corporate secretary (containing certain information specified in our bylaws)
not less than 90 days or more than 120 days prior to the first anniversary of
the preceding year's annual meeting (for next year's annual meeting, no earlier
than June 7, 2002 and no later than July 7, 2002). These requirements are
separate from and in addition to the SEC's requirements that a stockholder must
meet in order to have a stockholder proposal included in next year's proxy
statement.

Stockholder Proposals for the 2002 Annual Meeting. If you are submitting a
proposal to be included in next year's proxy statement, you may do so by
following the procedures prescribed in SEC Rule 14a-8. To be eligible for
inclusion, stockholder proposals must be received by our corporate secretary no
later than May 10, 2002.

How will Resources Connection solicit proxies for the Annual Meeting?

We are soliciting proxies by mailing this Proxy Statement and proxy card to
our stockholders. We will pay the solicitation costs, and will reimburse banks,
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses in forwarding proxy materials to beneficial owners.

How do I obtain a copy of the Annual Report on Form 10-K that Resources
Connection filed with the Securities and Exchange Commission?

If you desire a copy of our Annual Report on Form 10-K, we will provide one
to you free of charge upon your written request to our Investor Relations
Department at 695 Town Center Drive, Suite 600, Costa Mesa, California 92626,
or from our Investor Relations website at "http://ir.resourcesconnection.com".

PROPOSAL 1

ELECTION OF DIRECTORS

Our Board of Directors currently consists of eight directors. Our
certificate of incorporation provides for a classified Board of Directors
consisting of three classes of directors, each serving staggered three-year
terms. At the Annual Meeting, three directors will be elected, each serving a
term of three years expiring at our 2004 Annual Meeting of Stockholders and
until his or her successor is duly elected and qualified. Each of the nominees,
Karen M. Ferguson, C. Stephen Mansfield and Leonard Schutzman, is presently a
member of our Board of Directors. The Board of Directors recommends that the
stockholders vote in favor of the re-election of the nominees named in this
Proxy Statement to continue to serve as members of our Board of Directors. (See
"Nominees" below).

The five directors whose terms of office do not expire in 2001 will continue
to serve after the Annual Meeting until such time as their respective terms of
office expire and their successors are duly elected and qualified. (See "Other
Directors" below).

If at the time of the Annual Meeting any of the nominees should be unable or
decline to serve, the persons named as proxies on the proxy card will vote for
such substitute nominee or nominees as our Board of Directors recommends, or
vote to allow the resulting vacancy to remain open until filled by our Board of
Directors, as our Board of Directors recommends. Each of the nominees has
consented to serve if elected.

Nominees

The directors standing for re-election are:

Karen M. Ferguson, age 37, 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.

C. Stephen Mansfield, age 61, 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. Mr. Mansfield is also
a director of PBOC Holdings, Inc.

Leonard Schutzman, age 55, 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 TraffIQ Systems. He is an
operating executive affiliated with Evercore Partners LLC.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE
NOMINEES.

Other Directors

The following persons will continue to serve as members of our Board of
Directors after the Annual Meeting until their terms of office expire (as
indicated below) and their successors are elected and qualified.

Stephen J. Giusto, age 39, 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. Mr. Giusto's term of office as
one of our directors expires at the Annual Meeting in 2002.

Donald B. Murray, age 54, 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's term of office as one of our directors expires at the Annual Meeting
in 2003.

David G. Offensend, age 48, is a director of Resources Connection, a
position he has held since April 1999. Mr. Offensend is one of the founding
principals and Vice Chairman of Evercore Partners, Inc. and one of the managing
members of Evercore Partners LLC. 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. Mr. Offensend's term of office as one of our directors expires
at the Annual Meeting in 2003.

Gerald Rosenfeld, age 54, 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. Mr. Rosenfeld's term of office
as one of our directors expires at the Annual Meeting in 2003.

John C. Shaw, age 67, 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. Mr. Shaw currently serves as a senior advisor to the Enterprise
Risk Services Group of Deloitte & Touche LLP. 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. Mr. Shaw's term of office
as one of our directors expires at the Annual Meeting in 2002.

Director Compensation

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

. $12,000 per year 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 of our Board of Directors also receive a
flat fee of $300 per committee meeting attended.

Attendance at Meetings

Our Board of Directors met in person or conducted telephonic meetings a
total of seven times during fiscal year 2001. During that same period, the
Board acted two times by unanimous written consent. Each director has attended
at least 75% of all Board meetings and, unless otherwise indicated below,
applicable committee meetings.

Committees of the Board of Directors

Our Board of Directors has established a Compensation Committee and an Audit
Committee, each composed entirely of directors who are not officers of
Resources Connection. The Board of Directors has no Nominating Committee.
Selection of nominees for the Board is made by the entire Board of Directors.

Compensation Committee

The Compensation Committee of our Board of Directors consists of three non-
employee directors, Messrs. Offensend, Rosenfeld and Shaw. Mr. Offensend is the
Chairman of the Compensation Committee. Our Compensation Committee determines,
approves and reports to the Board of Directors on all elements of compensation
for our Chief Executive Officer, and consults on compensation issues affecting
the executive vice presidents, including establishing salaries and reviewing
benefit programs and reviewing, approving, recommending and administering our
incentive compensation and stock option and stock purchase plans.

The Compensation Committee of our Board of Directors met two times during
our 2001 fiscal year. Each member of the Compensation Committee attended these
meetings.

Audit Committee

The Audit Committee of our Board of Directors consists of three non-employee
directors, Messrs. Mansfield, Rosenfeld and Shaw. Mr. Mansfield is the Chairman
of the Audit Committee. Our Audit Committee operates under a written charter
adopted by our Board of Directors, a copy of which is attached to this Proxy
Statement as Appendix A. The Audit Committee reviews our auditing, accounting,
financial reporting and internal control functions and makes recommendations to
our Board of Directors for the selection of independent accountants. The Audit
Committee has also considered whether the provision of services by
PricewaterhouseCoopers LLP, as described under the caption "All Other Fees"
below, is compatible with maintaining the independence of
PricewaterhouseCoopers LLP. In discharging its duties, the Committee:

. reviews and approves the scope of the annual audit and the independent
accountant's fees;

. meets independently with our internal finance staff, our independent
accountants and our senior management; and

. consults with our auditors with regard to the plan of audit, the results
of the audit and audit report and confers with the auditors regarding
the adequacy of internal accounting controls.

During the year, our Board of Directors examined the composition of the
Audit Committee in light of the Nasdaq Marketplace Rules requiring that at
least two members of the Audit Committee be "independent directors." Based upon
this examination, the Board confirmed that each member of our Audit Committee
is an "independent director" within the meaning of these rules.

Mr. Mansfield, the Chairman of our Audit Committee, met once with
PricewaterhouseCoopers LLP during our 2001 fiscal year. Messrs. Rosenfeld and
Shaw did not participate in this meeting.

Audit Fees

The aggregate fees billed by PricewaterhouseCoopers LLP for professional
services rendered for the audit of our most recent annual financial statements
and the reviews of the financial statements included in our quarterly reports
during our 2001 fiscal year were $69,400.

All Other Fees

The aggregate fees billed by PricewaterhouseCoopers LLP for all other
services rendered during our 2001 fiscal year were $484,000.

It is expected that representatives of PricewaterhouseCoopers LLP will be
present at the Annual Meeting and will be available to respond to questions.
They will be given an opportunity to make a statement if they desire to do so.

The following report of the Audit Committee does not constitute soliciting
material and should not be deemed filed with the Securities and Exchange
Commission under the Securities Act of 1933 or the Securities Exchange Act of
1934 or incorporated by reference in any document so filed.

AUDIT COMMITTEE REPORT

To the Board of Directors
of Resources Connection, Inc.

September 4, 2001

As set forth in more detail in the Audit Committee charter, the Audit
Committee's primary responsibilities fall into three categories:

. first, the Committee is responsible for monitoring the preparation of
quarterly and annual financial reports by the Company's management,
including discussions with management and the Company's outside auditors
regarding significant accounting and reporting matters;

. second, the Committee is responsible for matters relating to the
relationship between the Company and its outside auditors, including
recommending their appointment or removal; reviewing the scope of their
audit services and related fees, as well as any other services being
provided to the Company; and determining whether the outside auditors
are independent (based in part on the annual letter provided to the
Company pursuant to Independence Standards Board Standard No. 1); and

. third, the Committee oversees management's implementation of effective
systems of internal controls.

The Committee has reviewed and discussed with the Company's management and
its independent auditing firm, PricewaterhouseCoopers LLP, the Company's
audited financial statements for the years ended May 31, 1999, 2000 and 2001,
known as the Audited Financial Statements. Management advised the Committee
that the Audited Financial Statements were prepared in accordance with
generally accepted accounting principles. In addition, the Committee discussed
with PricewaterhouseCoopers LLP the matters required by Statement on Auditing
Standards No. 61 (Communication With Audit Committees).

The Committee also has received and reviewed the written disclosures and the
letter from PricewaterhouseCoopers LLP required by Independence Standards Board
Standard No. 1 (Independence Discussions With Audit Committees), and the
Committee discussed with that firm its independence from the Company. The
Committee also discussed with the Company's management and
PricewaterhouseCoopers LLP such other matters and received the assurances from
that firm as the Committee deemed appropriate.

Management is responsible for the Company's internal controls and the
financial reporting process. PricewaterhouseCoopers LLP is responsible for
performing an independent audit of the Company's financial statements in
accordance with generally accepted auditing standards and issuing a report
thereon.

Based on the foregoing review and discussions and a review of the report of
PricewaterhouseCoopers LLP with respect to the Audited Financial Statements,
and relying thereon, the Committee recommended to the Company's Board of
Directors the inclusion of the Audited Financial Statements in Resources
Connection's Annual Report on Form 10-K for the fiscal year ended May 31, 2001.

THE AUDIT COMMITTEE

C. Stephen Mansfield, Chairman
Gerald Rosenfeld
John C. Shaw

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16 of the Securities Exchange Act of 1934, as amended, requires our
executive officers (as defined under Section 16), directors and persons who
beneficially own greater than 10% of a registered class of our equity
securities to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. We are required to disclose any failure of
these executive officers, directors and 10% stockholders to file these reports
by the required deadlines. Based solely on our review of the copies of such
forms received by us, or written representations from certain reporting persons
that no report on Form 5 was required for such persons, we believe that, for
the reporting period from December 14, 2000 (the date of our initial public
offering) to the end of our 2001 fiscal year, our executive officers and
directors complied with all their reporting requirements under Section 16(a)
for such fiscal year, except that (i) Mr. Murray failed to report timely on
Form 4 his January 10, 2001 option grant for 40,000 shares, (ii) each of Mr.
Bower, Ms. Duchene, Ms. Ferguson, Mr. Giusto and Mr. Longnecker failed to
report timely on Form 4 their respective January 10, 2001 option grants for
20,000 shares, (iii) Mr. Bower failed to report on his initial Form 3, which
was timely filed, 900 shares acquired by Mr. Bower in the initial public
offering, (iv) Ms. Ferguson failed to report on her initial Form 3, which was
timely filed, 250 shares acquired by Ms. Ferguson in the initial public
offering, (v) Mr. Shaw failed to report on his initial Form 3, which was timely
filed, 1,000 shares acquired by Mr. Shaw in the initial public offering and
(vi) Mr. Mansfield failed to report on his initial Form 3, which was timely
filed, 750 shares acquired by Mr. Mansfield in the initial public offering. On
July 6, 2001, each of Messrs. Murray, Bower, Giusto and Longnecker and Ms.
Duchene filed a report on Form 4 to report their January 10, 2001 option
grants. On the same date, Mr. Bower filed a corrected Form 3 to report the
shares he acquired in the initial public offering. On September 4, 2001, Ms.
Ferguson filed a report on Form 4 to report her January 10, 2001 option grant.
On that same date, Ms. Ferguson also filed a corrected Form 3 to report the
shares she acquired in the initial public offering. Messrs. Shaw and Mansfield
intend to file an amended Form 3 to report the shares they respectively
acquired in the initial public offering.

EXECUTIVE COMPENSATION AND CERTAIN TRANSACTIONS

Executive Officers

The following table sets forth information about our executive officers as
of August 31, 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...... 38 Chief Legal Officer, Executive Vice President of
Human Relations and Assistant Secretary

Donald B. 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.

Stephen J. 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, 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, 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, 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, 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.

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
----------------------------------------- ------------
Securities
All Other Annual Underlying
Name and Principal 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.

Potential
Realizable Value
of Assumed Annual
Individual Grants Rate of Stock
---------------------------------------------------- Price
Number of % of Total Exercise Appreciation for
Securities Options Granted Price Option Term
Underlying to Employees in per Share Expiration -----------------
Options Granted Fiscal 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
Shares Options at May 31, 2001 at May 31, 2001
Acquired on Value ------------------------- ---------------------------------
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.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee of our Board of Directors consists of three non-
employee directors, Messrs. Offensend, Rosenfeld and Shaw. 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 Board of Directors.

The following report of the Compensation Committee does not constitute
soliciting material and should not be deemed filed with the Securities and
Exchange Commission under the Securities Act of 1933 or the Securities Exchange
Act of 1934 or incorporated by reference in any document so filed.

REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
September 4, 2001

To the Board of Directors of Resources Connection, Inc.

Compensation Philosophy

Our philosophy in setting compensation policies for the senior executive
group, which includes our Chief Executive Officer and the executive vice
presidents, is to attract, motivate and retain high caliber talent while
maximizing stockholder value over time. The Compensation Committee sets the
compensation policy applicable to these senior executive officers and
evaluates, in consultation with the Chief Executive Officer, the performance of
such officers. The Committee strongly believes that executive compensation
should be tied to corporate performance and increased stockholder value. The
Committee has adopted the following guidelines in making its compensation
decisions:

. provide a fair and competitive total compensation package that enables
us to attract and retain superior executive talent;

. design compensation programs to further our yearly and long-term
business objectives; and

. include variable components in the compensation package that links
executive financial reward to stockholder return.

Components of Executive Compensation

In this, our first year as a publicly-traded company, the Compensation
Committee has focused on the following three components in forming the total
compensation package for its senior executive officers: base salary; annual
incentive bonus; and long-term equity incentives.

Base Salary

Our Chief Executive Officer and three of our executive vice presidents each
have a written employment agreement that establishes each individual's base
salary. Within the context of such agreements, the Committee annually reviews
the Chief Executive Officer's base salary and consults on the base compensation
of the executive vice presidents. The Committee intends to compensate our
senior executive officers, including our Chief Executive Officer, fairly and
competitively within the relevant industry. In order to evaluate our
competitive position in the professional services industry, the Compensation
Committee, with the assistance of an independent compensation specialist,
reviews and analyzes the compensation packages, both cash and equity, offered
by other publicly-traded, professional services companies. We believe that this
approach has allowed the Committee to compensate the senior executive group
fairly and competitively by industry standards. As reflected in the Summary
Compensation Table, Mr. Murray's salary for fiscal year 2001 was $447,665. As
discussed below, the Committee also emphasizes longer-term compensation
incentives for these

executives as it believes that these longer-term incentives help motivate the
executives to better achieve our corporate performance goals, thereby more
directly contributing to stockholder value.

Annual Incentive Bonus

During fiscal year 2001, our senior executive officers were eligible for a
target annual incentive bonus, calculated by the Committee as a percentage of
each officer's base salary, under the terms of our Executive Incentive Bonus
Plan, referred to as the Plan. The Plan promotes a pay for performance
philosophy by providing the executive group with direct cash incentives to
achieve corporate financial goals. All senior executive officers were eligible
for target bonuses ranging from 50 to 65% of their base salary, depending upon
their positions. During fiscal year 2001, bonuses awarded under the Plan to the
executive officers, including Mr. Murray, were calculated based on our
achievement of certain financial performance metrics. The successful completion
of these goals was measured objectively by the Committee. The Plan allowed for
the incentive awards to increase if the Company exceeded certain, defined
financial objectives. The financial metrics used to calculate the incentive
bonuses are based on confidential information and are competitively sensitive
as they are derived from our internal projections and business plan. Mr.
Murray's annual bonus of $300,518 reflects his targeted bonus amount, with an
additional amount included for superior corporate performance as measured
against the defined goals. This bonus represented 40.2% of his total
compensation. Elements of our financial performance for fiscal year 2001 that
directly affected Mr. Murray's bonus calculation (as well as the bonus
calculation for the other officers) included achievement of budgeted revenue
and EBITDA goals for fiscal 2001.

Long-Term Incentives

The Committee may award stock options to the senior executive officers to
enhance the link between executive pay and stockholder value. Awards are made
pursuant to the Resources Connection Inc. 1999 Long-Term Incentive Plan,
referred to as the Incentive Plan. Under the Incentive Plan, the Committee also
has the ability to award other equity-based incentives such as stock
appreciation rights or restricted stock, but has not done so to date. The
Committee is responsible for determining who should receive stock option
grants, when the grants should be made, the exercise price per share and the
number of shares to be granted. The Committee considers grants of long-term
incentive awards to executive officers during each fiscal year. To date, stock
options have been granted at an option price set at fair market value of our
common stock on the date of grant. As such, stock options have value only if
the stock price appreciates following the date the options are granted. The
stock options reflected in the Summary Compensation Table are subject to a 48-
month vesting period. This approach encourages the creation of stockholder
value over the long term. The stock options awarded to the senior executive
group in fiscal year 2001 were based on individual and corporate performance as
determined by the Committee.

In fiscal 2001, Mr. Murray received options to purchase a total of 40,000
shares at the fair market value of the shares on the date of grant. The
Committee strongly believes that equity ownership, including stock options,
provides our executive officers substantial motivation to maximize long-term
stockholder value.

Internal Revenue Code Section 162(m)

To the extent readily determinable and as one of the factors in its
consideration of compensation matters, the Committee considers the anticipated
tax treatment to Resources Connection and to the executives of various payments
and benefits. The policy of the Committee is to establish and maintain a
compensation program that maximizes the creation of long-term stockholder
value. Action will be taken to qualify most compensation approaches to ensure
deductibility, except in those limited cases in which the Committee believes
stockholder interests are best served by retaining flexibility. In such cases
the Committee will consider various alternatives to preserving the
deductibility of compensation payments and benefits to the extent reasonably
practicable and to the extent consistent with its other compensation
objectives.

Summary

The Compensation Committee believes that its executive compensation
philosophy serves the best interests of Resources Connection and its
stockholders. Executive compensation paid by Resources Connection is intended
to be linked to, and consistent with, corporate performance, which the
Committee believes will help align the interests of its executives with those
of the stockholders.

THE COMPENSATION COMMITTEE

David G. Offensend, Chairman
Gerald Rosenfeld
John C. Shaw

Transactions With Certain Executive Officers

Employee Benefit Plans

1998 Employee Stock Purchase Plan

In December 1998, our Board of Directors 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.

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.

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;

. 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.

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.

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.

401(k) Plan

Resources Connection has a defined contribution 401(k) plan that covers all
employees who have completed at least 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.

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 an "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 an "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.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The following descriptions summarize the material terms of certain
relationships and transactions with any of our officers, director and holders
of 5% or more of our outstanding capital stock.

Registration Rights and Board Representation of Evercore Partners L.L.C. and
Management.

Pursuant to a Stockholders Agreement among Resources Connection and certain
entities affiliated with Evercore Partners L.L.C., or Evercore Partners, Donald
B. Murray, Stephen J. Giusto, Karen M. Ferguson and Brent M. Longnecker, the
stockholders party to this agreement have agreed to vote their shares in favor
of Board nominees assigned by each of Evercore Partners and the management
stockholders. As Evercore Partners' percentage ownership in the company
decreases, so does the number of director nominees it can designate. As the
management stockholders' percentage ownership in the company decreases, so does
the number of director nominees they can designate. The rights of either
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.
We have 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.

Pursuant to the Stockholders Agreement, Evercore Partners and the management
stockholders each have the right to demand that the company register their
shares of common stock three 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 Evercore Partners and the management stockholders.

In addition, if we propose to register our common stock under the Securities
Act, Evercore Partners, Richard Gersten, Paul Lattanzio, Gerald Rosenfeld,
Mainz Holdings Ltd., DB Capital Investors, LP, BancBoston Investments Inc.,
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. In an underwritten offering, the
underwriters have the right to limit the number of shares included in the
registration in their discretion.

As of August 31, 2001, the following directors, officers and holders of 5%
or more of our outstanding shares 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........................................ 355,956
Karen Ferguson........................................... 300,250
Brent Longnecker......................................... 185,994
John Bower............................................... 4,690
Gerald Rosenfeld......................................... 136,882
Entities affiliated with Evercore 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. In 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 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:

Aggregate
Number of Shares Principal Amount
Number of Shares of Class B of Subordinated
of Common Stock Common Stock 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 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 share certain information regarding
our customer list and marketing databases with Ledgent in exchange for Ledgent
sharing similar information with us. 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 directors and members of
our management team (including Donald Murray, Stephen Giusto, Karen Ferguson,
Kate Duchene, Brent Longnecker and Gerald Rosenfeld), 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.

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 us
certain printing and related services. The spouse of Ms. Duchene is employed by
Donnelley. We may engage Donnelley in the future to provide additional printing
and related services.

SECURITY OWNERSHIP OF MANAGEMENT
AND PRINCIPAL STOCKHOLDERS

The following table sets forth, as of August 31, 2001, certain information
with respect to the beneficial ownership of our common stock by:

. each person or group of affiliated persons known by us to own
beneficially more than 5% of the outstanding shares of our common stock;

. each of our directors;

. each of our named executive officers; and

. all of our directors and the named executive officers as a group.

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.

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.

Number of Shares Percentage of
Beneficially Owned(1) Shares Outstanding
--------------------- ------------------

Directors and Officers
Donald B. Murray(2).................. 1,385,083 6.6%
Stephen J. Giusto(3)................. 355,956 1.7%
Karen M. Ferguson.................... 300,250 1.4%
Brent M. Longnecker.................. 185,994 *
John D. Bower........................ 55,609 *
Kate W. Duchene(4)................... 28,500 *
David G. Offensend(5)................ -- --
Gerald Rosenfeld(6).................. 136,882 *
Leonard Schutzman(5)................. -- --
John C. Shaw(7)...................... 1,000 *
C. Stephen Mansfield................. 3,059 *
Named Executive Officers, Executive
Officers and Directors as a
group (11 persons).................. 2,452,333 11.6%

Five Percent Stockholders
Evercore Partners L.L.C.(8).......... 2,835,580 13.4%

--------
* Less than 1%.

(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. The number of shares beneficially owned
by a person and the percentage ownership of that person includes shares of
common stock subject to options or warrants held by that person that are
currently exercisable or exercisable within 60 days of August 31, 2001. As
of August 31, 2001, there were 21,145,680 outstanding shares of common
stock.

(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 August 31, 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'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.

PERFORMANCE GRAPH

Set forth below is a line graph comparing the annual percentage change in
the cumulative total return to the holders of our common stock with the
cumulative total return of the Russell 2000 Index and the Standard Industry
Code 8742 Management Consulting Services Index, or the SIC Index, for the
period commencing on the first day our common stock was traded on the Nasdaq
Stock Market, December 15, 2000, and ending on July 31, 2001. The graph assumes
that $100 was invested on December 15, 2000 in our common stock and in each
index (based on prices from the close of trading on December 15, 2000), and
that all dividends were reinvested. No cash dividends have been declared or
paid on our common stock. Stockholder returns over the indicated period may not
be indicative of future stockholder returns.

The information contained in the performance graph shall not be deemed to be
"soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act of 1933 or the Securities Exchange Act
of 1934, except to the extent that the Company specifically incorporates it by
reference into such filing.

COMPARISON OF EIGHT-MONTH CUMULATIVE TOTAL RETURN
AMONG RESOURCES CONNECTION, INC.,
THE RUSSELL 2000 INDEX AND SIC INDEX
[GRAPH APPEARS HERE]

ASSUMES $100 INVESTED ON DEC. 15, 2000
ASSUMES DIVIDENDS REINVESTED

Resources Connection, Inc. Russell 2000 Index SIC Index
-------------------------- ------------------ ---------

12/15/00................ 100.00 100.00 100.00
12/31/00................ 118.75 100.00 100.00
01/31/01................ 147.66 105.13 105.78
02/28/01................ 144.14 98.10 92.31
03/31/01................ 138.28 93.17 76.78
04/30/01................ 165.94 100.36 81.58
05/31/01................ 191.87 102.68 95.07
06/30/01................ 161.50 106.09 92.79
07/31/01................ 158.75 100.26 85.52

PROPOSAL 2

AMENDMENTS TO THE 1999 LONG-TERM INCENTIVE PLAN

We maintain the Resources Connection, Inc. 1999 Long-Term Incentive Plan,
referred to as the "Plan". At the Annual Meeting, stockholders will be asked to
approve an amendment to the Plan, referred to as the "Amendment". The Amendment
consists of two parts: (1) an increase in the aggregate number of shares
available under the Plan, and (2) confirmation and approval of the performance-
based award feature of the Plan. Following is a more detailed summary of the
two parts of the Amendment:

. Share Increase. The Plan provides for a limit on the aggregate number of
shares of our common stock that may be issued or delivered pursuant to
awards granted under the Plan. The aggregate share limit is currently
5,040,000 shares. As of August 31, 2001, approximately 3,252,645 of the
5,040,000 shares had been issued pursuant to awards granted under the
Plan or were subject to awards then outstanding under the Plan, and
approximately 1,470,150 shares were then available for additional Plan
award grants.

On August 27, 2001, our Board of Directors approved, subject to
stockholder approval, an amendment to increase the Plan's aggregate
share limit from 5,040,000 shares to 6,540,000 shares (an increase of
1,500,000 shares), subject to certain adjustments as provided in the
Plan (see "Summary Description of the Plan--Limits on Awards; Authorized
Shares" below). The Board of Directors approved the share increase
based, in part, on a belief that the number of shares that remained
available for additional awards under the Plan was insufficient to
adequately provide for future incentives.

. Performance Share Awards. One element of the Plan is our flexibility to
grant certain performance-based awards designed to satisfy the
requirements for deductibility of compensation under Section 162(m) of
the Internal Revenue Code (in addition to other awards, such as stock
options and stock appreciation rights, expressly authorized under the
Plan which may also qualify as performance-based compensation for
Section 162(m) purposes), referred to as "Performance-Based Awards".
(See "Summary Description of the Plan--Performance-Based Awards Under
Section 162(m); Business Criteria" below). Section 162(m) requires that
we obtain stockholder approval of this element of the Plan and the
related "business criteria" (described below) that may be referenced in
granting Performance-Based Awards within a certain period of time after
we became a publicly-held company. Therefore, in addition to the share
increase described above, stockholders are being asked to approve the
Performance-Based Award element of the Plan, including the related
business criteria that may be referenced in granting Performance-Based
Awards.

If the Amendment is not approved by stockholders, the current aggregate
share limit of 5,040,000 shares will remain in effect and we will not have the
flexibility to grant Performance-Based Awards under the Plan (except, as noted
above, stock options and stock appreciation rights which are otherwise
expressly authorized under the Plan).

The principal terms of the Plan are summarized below. The following summary
is qualified in its entirety by the full text of the Plan, which is an appendix
to the copy of this Proxy Statement that was filed electronically with the
Securities and Exchange Commission and can be reviewed on the Securities and
Exchange Commission's Web site at http://www.sec.gov. A copy of the Plan may
also be obtained by contacting Kate Duchene, our Chief Legal Officer, at 695
Town Center Drive, Suite 600, Costa Mesa, California 92626 (telephone number
(714) 430-6400).

Summary Description of the Plan

Purpose. The purpose of the Plan is to promote the success of Resources
Connection, Inc. and the interests of our stockholders by providing an
additional means to attract, motivate, retain and reward selected

eligible employees and certain other persons through the grant of awards and
incentives for high levels of individual performance and our improved financial
performance.

Awards. The Plan authorizes stock options, stock appreciation rights,
referred to as "SARs", restricted stock, stock bonuses, Performance-Based
Awards, as well as certain other stock-based awards described in the Plan. The
various forms of awards that may be granted under the Plan give us the
flexibility to offer competitive incentives and to tailor benefits to specific
needs and circumstances. Generally, an option or stock appreciation right will
expire, or other award will vest, not more than 10 years after the date of
grant.

Administration. The Plan will be administered by our Board of Directors or
by one or more committees appointed by our Board of Directors (the appropriate
acting body is referred to as the "Administrator"). The Administrator is
currently the Compensation Committee of our Board of Directors.

The Administrator determines the number of shares that are to be subject to
awards and the terms and conditions of such awards, including the price (if
any) to be paid for the shares or the award. Subject to the other provisions of
the Plan, the Administrator has the authority (a) to permit the recipient of
any award to pay the purchase price of shares of common stock or the award in
cash or by check, the delivery of previously owned shares of common stock, or a
cashless exercise; (b) to accelerate the receipt or vesting of benefits
pursuant to an award; and (c) to make certain adjustments to an outstanding
award and authorize the conversion, succession or substitution of an award.

Eligibility. Persons eligible to receive awards under the Plan include
officers or employees of Resources Connection, Inc. or any of our subsidiaries,
our directors, and certain consultants and advisors to Resources Connection,
Inc. or any of our subsidiaries.

Currently, approximately 1,530 of our officers and employees (including all
of our named executive officers) and each of the five non-employee directors of
Resources Connection, Inc. are considered eligible under the Plan, subject to
the power of the Administrator to determine eligible persons to whom awards
will be granted.

Transfer Restrictions. Subject to limited exceptions contained in the Plan
(which generally include transfers back to the Company, a participant's
designation of a beneficiary, the exercise of a participant's option by his or
her legal representative in the event of the participant's disability,
transfers pursuant to certain court orders, and "cashless exercises" approved
by the Administrator), awards granted under the Plan are not transferable by
the recipient other than by will or the laws of descent and distribution and
are generally exercisable only by the recipient. The Administrator may permit
the transfer of an award if the transferor presents satisfactory evidence that
the transfer is for estate and/or tax planning purposes and without
consideration (other than nominal consideration).

Limits on Awards; Authorized Shares. As described above, the current
Aggregate Share Limit under the Plan is 5,040,000. If stockholders approve the
Amendment, the aggregate share limit will become 6,540,000 shares. In addition,
the Plan provides that the maximum number of shares subject to Awards which may
be granted to any individual during any calendar year is 200,000.

As is customary in incentive plans of this nature, the number and kind of
shares available under the Plan and the then outstanding stock-based awards, as
well as exercise or purchase prices, performance targets under certain
performance-based awards, and share limits, are subject to adjustment in the
event of certain reorganizations, mergers, combinations, consolidations,
recapitalizations, reclassifications, stock splits, stock dividends, asset
sales or other similar events, or extraordinary dividends or distributions of
property to stockholders.

The Plan will not limit the authority of our Board of Directors or the
Administrator to grant awards or authorize any other compensation, with or
without reference to the common stock, under any other plan or authority.

Stock Options. An option is the right to purchase shares of our common stock
at a future date at a specified price, referred to as the "Option Price". The
Option Price per share will be determined by the Administrator at the time of
grant, but in the case of Incentive Stock Options may not be less than the fair
market value of a share on the date of grant.

An option may either be an Incentive Stock Option or a Nonqualified Stock
Option. Incentive Stock Option benefits are taxed differently from Nonqualified
Stock Options, as described under "Federal Income Tax Consequences of Awards
Under the Plan" below. Incentive Stock Options are also subject to more
restrictive terms and are limited in amount by the Code and the Plan. Full
payment for shares purchased on the exercise of an option must be made at the
time of such exercise in a manner approved by the Administrator.

Stock Appreciation Rights. A SAR is the right to receive payment of an
amount equal to the excess of the fair market value of a share of our common
stock on the date of exercise of the SAR over the base price of the SAR. The
base price will be established by the Administrator at the time of grant of the
SAR. SARs may be granted in connection with other awards or independently.

Restricted Stock Awards, Stock Bonuses. A restricted stock award is an award
typically for a fixed number of shares of our common stock subject to
restrictions. The Administrator specifies the price, if any, the Participant
must pay for such shares and the restrictions (which may include, for example,
continued service only and/or performance standards) imposed on such shares.

Stock Bonuses. The Administrator may grant a stock bonus to any eligible
person to reward exceptional or special services, contributions or achievements
in the manner and on such terms and conditions (including any restrictions on
the shares) as determined from time to time by the Administrator. The number of
shares so awarded will be determined by the Administrator and may be granted
independently or in lieu of a cash bonus.

Performance-Based Awards Under Section 162(m); Business Criteria. If
stockholders approve the Amendment, the Administrator may grant to executive
officers Performance-Based Awards designed to satisfy the requirements for
deductibility under Section 162(m). (As noted above, these Performance-Based
Awards are in addition to options or SARs that may also qualify as performance-
based awards for Section 162(m) purposes.) These awards will be based on the
performance of Resources Connection, Inc. and/or one or more of our
subsidiaries, divisions, or segments.

The Administrator will establish the business criteria on which performance
goals will be awarded. The business criteria on which performance goals will be
established include revenue growth, net earnings (before or after taxes,
interest, depreciation, and/or amortization), cash flow, return on equity or on
assets or on net investment, stock appreciation, total stockholder return, or
cost containment or reduction, or any combination thereof.

Performance-Based Awards are earned and payable only if performance reaches
specific, preestablished performance goals related to one or more of the
business criteria approved by the Administrator in advance of applicable
deadlines under the Internal Revenue Code and while the performance relating to
the goals remains substantially uncertain. Performance goals may be adjusted to
reflect certain changes, including reorganizations, liquidations and
capitalization and accounting changes, to the extent permitted by Section
162(m).

Before any Performance-Based Award is paid, the Administrator must certify
that the performance goals have been satisfied. The Administrator will have
discretion to determine the performance goals and restrictions or other
limitations of the individual awards and may reserve "negative" discretion to
reduce payments below maximum Award limits. Grants of Performance-Based Awards
in any calendar year to any participant may not be made with reference to more
than 200,000 shares.

Deferrals. The Plan authorizes the Administrator to permit deferred payment
of awards. The Administrator may determine the form and timing of payment,
vesting, and other terms applicable to deferrals.

Acceleration of Awards; Possible Early Termination of Awards. Upon a change
in control event, the Administrator may provide that each option and SAR 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 (1) upon stockholder approval of
our dissolution or liquidation, (2) upon stockholder approval of the sale of
all or substantially all of our assets to an entity that is not an affiliate,
or (3) 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.

Termination of or Changes to the Plan. Our Board of Directors may amend or
terminate the Plan at any time and in any manner. Stockholder approval for an
amendment will generally not be obtained unless required by applicable law or
deemed necessary or advisable by our Board of Directors. Unless previously
terminated by our Board of Directors, the Plan will terminate on June 16, 2009.
Outstanding Awards may be amended, subject, however, to the consent of the
holder if the amendment materially and adversely affects the holder.

Securities Underlying Awards. The closing price of a share of our common
stock as of August 31, 2001 was $22.00 per share.

Federal Income Tax Consequences of Awards Under the Plan

The federal income tax consequences of the Plan under current federal law,
which is subject to change, are summarized in the following discussion which
deals with general tax principles applicable to the Plan. This summary is not
intended to be exhaustive and, among other considerations, does not describe
state, local, or international tax consequences.

With respect to Nonqualified Stock Options, we are generally entitled to
deduct and the optionee recognizes taxable income in an amount equal to the
difference between the option exercise price and the fair market value of the
shares at the time of exercise. With respect to Incentive Stock Options, we
generally are not entitled to a deduction nor does the participant recognize
income at the time of exercise. The current federal income tax consequences of
other awards authorized under the Plan generally follow certain basic patterns:
SARs are taxed and deductible in substantially the same manner as Nonqualified
Stock Options; nontransferable restricted stock subject to a substantial risk
of forfeiture results in income recognition equal to the excess of the fair
market value over the price paid (if any) only at the time the restrictions
lapse (unless the recipient elects to accelerate recognition as of the date of
grant); bonuses, and performance share awards are generally subject to tax at
the time of payment; and compensation otherwise effectively deferred is taxed
when paid. In each of the foregoing cases, we will generally have a
corresponding deduction at the time the participant recognizes income.

If an award is accelerated under the Plan in connection with a change in
control (as this term is used under the Code), we may not be permitted to
deduct the portion of the compensation attributable to the acceleration
("parachute payments") if it exceeds certain threshold limits under the
Internal Revenue Code (and certain related excise taxes may be triggered).
Furthermore, if the compensation attributable to awards is not "performance-
based" within the meaning of Section 162(m) of the Internal Revenue Code, we
may not be permitted to deduct the aggregate non performance-based compensation
in excess of $1,000,000 in certain circumstances.

Specific Benefits

We have not approved any awards under the Plan that are conditioned upon
stockholder approval of the Amendment. If the additional number of shares that
will be available under the Plan if this proposal is approved by stockholders
had been available for award purposes in fiscal 2001, we expect that our award
grants for fiscal 2001 would not have been substantially different than those
actually made under the Plan. For

information regarding awards granted to executive officers of the Company in
fiscal 2001, see the material under the heading "Executive Compensation and
Certain Transactions" above. We are not currently considering any additional
specific award grants under the Plan. The number, amount and type of awards to
be received by or allocated to eligible persons in the future under the Plan
cannot be determined at this time.

Vote Required; Recommendation of the Board of Directors "FOR" this Proposal

Our Board of Directors believes that the approval of the Amendment will
promote the interests of Resources Connection, Inc. and our stockholders and
continue to enable us to attract, retain and reward employees and other certain
persons important to our success and to provide incentives based upon the
attainment of corporate objectives and increases in stockholder value.

Approval of the Amendment requires the affirmative vote of a majority of our
common stock present, or represented, and entitled to vote at the Annual
Meeting.

THE BOARD OF DIRECTORS HAS APPROVED AND RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE AMENDMENT TO THE 1999 LONG-TERM INCENTIVE PLAN.

Proxies solicited by our Board of Directors will be so voted unless
stockholders specify otherwise in their proxies. Broker non-votes and
abstentions on this proposal have the effect described on page 2. All members
of our Board of Directors are eligible for awards under the Plan.

ADDITIONAL INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information we file at the office of the
Securities and Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information. Our Securities and Exchange Commission filings are also
available to the public from commercial document retrieval services and at the
web site maintained by the Securities and Exchange Commission at
http://www.sec.gov.

By order of the Board of Directors,

/s/ STEPHEN J. GIUSTO
Stephen J. Giusto
Secretary

Costa Mesa, California,
September 7, 2001

ALL STOCKHOLDERS ARE REQUESTED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY.

APPENDIX A

AUDIT COMMITTEE CHARTER

This charter shall be reviewed, reassessed and approved annually by the
audit committee of the board of directors and the board of directors.

Role and Independence

The audit committee of the board of directors assists the board in
fulfilling its responsibility for oversight of the accounting, auditing and
reporting practices of the corporation and other such duties as directed by the
board. In discharging its role, the committee is empowered to investigate any
matter brought to its attention.

The membership of the committee shall consist of at least three directors
who are generally knowledgeable in financial and auditing matters, including at
least one member with accounting or related financial management expertise.
Each member shall be free of any relationship that, in the opinion of the
board, would interfere with his or her individual exercise of independent
judgment, and shall meet the director independence requirements for serving on
audit committees as set forth in the corporate governance standards of NASDAQ.
The board of directors or the audit committee shall appoint one member of the
audit committee as chairperson, who shall be responsible for leadership of the
committee.

Responsibilities

The audit committee's primary responsibilities include:

. Recommending to the board the independent accountant to be selected or
retained to audit the financial statements of the corporation. In so
doing, the committee will request from the auditor a written affirmation
that the auditor is in fact independent, discuss with the auditor any
relationships that may impact the auditor's independence and recommend
to the board any actions necessary to oversee the auditor's
independence.

. Overseeing the independent auditor relationship by discussing with the
auditor the nature and rigor of the audit process and receiving and
reviewing audit reports.

. Providing guidance and oversight to the internal audit activities of the
corporation.

. Reviewing the audited financial statements and discussing them with
management and the independent auditor. These discussions shall include
consideration of the quality of the company's accounting principles as
applied in its financial reporting, including review of estimates,
reserves and accruals, review of judgmental areas, review of audit
adjustments whether or not recorded and such other inquiries as may be
appropriate. Based on the review, the committee shall make its
recommendation to the board as to the inclusion of the company's audited
financial statements in the company's annual report on Form 10-K.

. Discussing with management, the internal auditors and the external
auditors the quality and adequacy of the company's internal controls.

. Discussing with management the status of taxation matters as may be
appropriate.

. Reporting audit committee activities to the full board and issuing
annually (commencing in 2001) a report to be included in the proxy
statement (including appropriate oversight conclusions) for submission
to the shareholders.

A-1

RESOURCES CONNECTION, INC.
1999 LONG-TERM INCENTIVE PLAN

(As Amended and Restated [____________, 2001])

TABLE OF CONTENTS

Page

1. The Plan............................................................................................. 1
1.1 Purpose........................................................................................ 1
1.2 Administration and Authorization; Power and Procedure.......................................... 1
1.3 Participation.................................................................................. 2
1.4 Shares Available for Awards; Share Limits...................................................... 2
1.5 Grant of Awards................................................................................ 3
1.6 Award Period................................................................................... 3
1.7 Limitations on Exercise and Vesting of Awards.................................................. 3
1.8 No Transferability; Limited Exception to Transfer Restrictions................................. 4

2. Options.............................................................................................. 5
2.1 Grants......................................................................................... 5
2.2 Option Price................................................................................... 5
2.3 Vesting; Limits on Exercise; Other Limitations................................................. 6
2.4 Limitations on Grant and Terms of Incentive Stock Options...................................... 6
2.5 Limits on 10% Holders.......................................................................... 7
2.6 Option Repricing/Cancellation and Regrant/Waiver of Restrictions............................... 7
2.7 Options and Rights in Substitution for Stock Options Granted by Other Corporations............. 7

3. Stock Appreciation Rights (Including Limited Stock Appreciation Rights).............................. 7
3.1 Grants......................................................................................... 7
3.2 Exercise of Stock Appreciation Rights.......................................................... 7
3.3 Payment........................................................................................ 8
3.4 Limited Stock Appreciation Rights.............................................................. 9

4. Restricted Stock Awards.............................................................................. 9
4.1 Grants......................................................................................... 9
4.2 Restrictions................................................................................... 9
4.3 Return to the Corporation...................................................................... 10

5. Performance Share Awards and Stock Bonuses........................................................... 10
5.1 Grants of Performance Share Awards............................................................. 10
5.2 Special Performance-Based Share Awards......................................................... 10
5.3 Grants of Stock Bonuses........................................................................ 11

-i-

TABLE OF CONTENTS
(continued)

Page

5.4 Deferred Payments............................................................................. 11

6. Other Provisions.................................................................................... 12
6.1 Rights of Eligible Persons, Participants and Beneficiaries.................................... 12
6.2 Effects of Termination of Employment; Termination of Subsidiary Status;
Discretionary Provisions...................................................................... 13
6.3 Adjustments; Acceleration..................................................................... 14
6.4 Compliance with Laws.......................................................................... 16
6.4 Compliance with Laws TC "6.4 Compliance with Laws" \l "2"..................................... 16
6.5 Tax Withholding............................................................................... 17
6.6 Plan Amendment, Termination and Suspension.................................................... 17
6.7 Privileges of Stock Ownership................................................................. 18
6.8 Effective Date of the Plan.................................................................... 18
6.9 Term of the Plan.............................................................................. 18
6.10 Governing Law/Construction/Severability....................................................... 19
6.11 Captions...................................................................................... 19
6.12 Non-Exclusivity of Plan....................................................................... 19
6.13 No Restriction on Corporate Powers............................................................ 20
6.14 Effect on Other Benefits...................................................................... 20

7. Definitions......................................................................................... 20

-ii-

RESOURCES CONNECTION, INC.
1999 LONG-TERM INCENTIVE PLAN

(As Amended and Restated [____________, 2001])

1. The Plan.
--------

1.1 Purpose. The purpose of this Plan is to promote the success of the
-------
Company and the interests of its stockholders by attracting, motivating,
retaining and rewarding directors, officers, employees and other eligible
persons with awards and incentives for high levels of individual
performance and improved financial performance of the Company. Capitalized
terms used herein are defined in Section 7.

1.2 Administration and Authorization; Power and Procedure.
-----------------------------------------------------

1.2.1 Committee. This Plan will be administered by and all Awards will be
---------
authorized by the Committee. Action of the Committee with respect to
the administration of this Plan will be taken pursuant to a majority
vote or by written consent of its members.

1.2.2 Plan Awards; Interpretation; Powers of Committee. Subject to the
------------------------------------------------
express provisions of this Plan and any express limitations on the
delegated authority of a Committee, the Committee will have the
authority to:

(a) determine eligibility and the particular Eligible Persons who
will receive Awards;

(b) grant Awards to Eligible Persons, determine the price at which
securities will be offered or awarded and the amount of
securities to be offered or awarded to any of such persons,
and determine the other specific terms and conditions of
Awards consistent with the express limits of this Plan,
establish the installments (if any) in which such Awards will
become exercisable or will vest, or determine that no delayed
exercisability or vesting is required, and establish the
events of termination or reversion of such Awards;

(d) construe and interpret this Plan and any Award or other
agreements defining the rights and obligations of the Company
and Participants under this Plan, further define the terms
used in this Plan, and prescribe, amend and rescind rules and
regulations relating to the administration of this Plan;

(e) cancel, modify, or waive the Corporation's rights with respect
to, or modify, discontinue, suspend, or terminate any or all
outstanding Awards

held by Eligible Persons, subject to any required consent
under Section 6.6;

(f) accelerate or extend the exercisability or extend the term of
any or all outstanding Awards within the maximum ten-year term
of Awards under Section 1.6; and

(g) make all other determinations and take such other action as
contemplated by this Plan or as may be necessary or advisable
for the administration of this Plan and the effectuation of
its purposes.

1.2.3 Binding Determinations. Any action taken by, or inaction of, the
----------------------
Corporation, any Subsidiary, the Board or the Committee relating or
pursuant to this Plan will be within the absolute discretion of that
entity or body and will be conclusive and binding upon all persons.
Subject only to compliance with the express provisions hereof, the
Board and Committee may act in their absolute discretion in matters
within their authority related to this Plan.

1.2.4 Reliance on Experts. In making any determination or in taking or not
-------------------
taking any action under this Plan, the Committee or the Board, as
the case may be, may obtain and may rely upon the advice of experts,
including employees of and professional advisors to the Corporation.

1.2.5 Bifurcation of Plan Administration; Delegation. The Committee may
----------------------------------------------
delegate ministerial, non-discretionary functions to individuals who
are officers or employees of the Company.

1.2.6 No Liability. No director, officer or agent of the Company will be
------------
liable for any action, omission or decision under the Plan taken,
made or omitted in good faith.

1.3 Participation. Awards may be granted by the Committee only to those persons
-------------
that the Committee determines to be Eligible Persons. An Eligible Person
who has been granted an Award may, if otherwise eligible, be granted
additional Awards if the Committee so determines.

1.4 Shares Available for Awards; Share Limits.
-----------------------------------------

1.4.1 Shares Available. Subject to the provisions of Section 6.3, the
----------------
capital stock that may be delivered under this Plan will be shares
of the Corporation's authorized but unissued Common Stock and any
shares of its Common Stock held as treasury shares. The shares may
be delivered for any lawful consideration.

1.4.2 Share Limits. The maximum number of shares of Common Stock that may
------------
be delivered pursuant to Awards granted under this Plan will not
exceed [5,040,000] shares (the "Share Limit"). The maximum number of
shares subject to those Options and Stock Appreciation Rights that
are granted during any calendar year to any one individual will be
limited to 200,000 shares and the maximum individual limit on the
number of shares in the aggregate subject to all Awards

that during any calendar year are granted under this Plan to any one
individual will be 200,000 shares. Each of the foregoing numerical
limits will be subject to adjustment as contemplated by this Section
1.4 and Section 6.3 .

1.4.3 Share Reservation; Replenishment and Reissue of Unvested Awards. No
--------------------------------------------------------------
Award may be granted under this Plan unless, on the date of grant,
the sum of (i) the maximum number of shares of Common Stock issuable
at any time pursuant to such Award, plus (ii) the number of shares
of Common Stock that have previously been issued pursuant to Awards
granted under this Plan, other than reacquired shares available for
reissue consistent with any applicable legal limitations, plus (iii)
the maximum number of shares of Common Stock that may be issued at
any time after such date of grant pursuant to Awards that are
outstanding on such date, does not exceed the Share Limit. Shares of
Common Stock that are subject to or underlie Awards that expire or
for any reason are canceled or terminated, are forfeited, fail to
vest, or for any other reason are not paid or delivered under this
Plan, as well as reacquired shares, will again, except to the extent
prohibited by law or the terms of this Plan, be available for
subsequent Awards under this Plan. Shares of Common Stock issued
pursuant to the terms hereof (including shares of Common Stock
offset in satisfaction of applicable withholding taxes or the
exercise price of an Award) shall reduce on a share-for-share basis
the number of shares of Common Stock remaining available under this
Plan. Except as limited by law, if an Award is or may be settled
only in cash, such Award need not be counted against any of the
limits under this Section 1.4.

1.5 Grant of Awards. Subject to the express provisions of this Plan, the
---------------
Committee will determine the number of shares of Common Stock subject to
each Award, the price (if any) to be paid for the shares or the Award and,
in the case of performance share awards, in addition to matters addressed
in Section 1.2.2, the specific objectives, goals and "business criteria" as
such term is used in Section 5.2 that further define the terms of the
performance share award. Each Award will be evidenced by an Award Agreement
signed by the Corporation and, if required by the Committee, by the
Participant.

1.6 Award Period. Any Option, SAR, warrant or similar right shall expire and
------------
any other Award shall either vest or be forfeited not more than 10 years
after the date of grant; provided, however, that any payment of cash or
--------
delivery of stock pursuant to an Award may be delayed until a future date
if specifically authorized by the Committee in writing; provided further
----------------
that each Award will be subject to earlier termination as provided in or
pursuant to Sections 6.2 and 6.3 of this Plan.

1.7 Limitations on Exercise and Vesting of Awards.
---------------------------------------------

1.7.1 Provisions for Exercise. Unless the Committee otherwise expressly
-----------------------
provides, no Award will be exercisable or will vest until at least
six months after the initial Award Date, and once exercisable an
Award will remain exercisable until the expiration or earlier
termination of the Award.

1.7.2 Procedure. Any exercisable Award will be deemed to be exercised when
---------
the Corporation receives written notice of such exercise from the
Participant (on a form and in such manner as may be required by the
Committee), together with any required payment made in accordance
with Section 2.2.2 and Section 6.5 and any written statement
required pursuant to Section 3.4 of this Plan.

1.7.3 Fractional Shares/Minimum Issue. Fractional share interests will be
-------------------------------
disregarded, but may be accumulated. The Committee, however, may
determine in the case of Eligible Persons that cash, other
securities, or other property will be paid or transferred in lieu of
any fractional share interests.

1.8 No Transferability; Limited Exception to Transfer Restrictions.
--------------------------------------------------------------

1.8.1 Limit On Exercise and Transfer. Unless otherwise expressly provided
------------------------------
in (or pursuant to) this Section 1.8, by applicable law and by the
Award Agreement, as the same may be amended: (i) all Awards are non-
transferable and will not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge, encumbrance
or charge; (ii) Awards will be exercised only by the Participant;
and (iii) amounts payable or shares issuable pursuant to an Award
will be delivered only to (or for the account of) the Participant.

1.8.2 Exceptions to Limits On Transfer. The exercise and transfer
--------------------------------
restrictions in Section 1.8.1 will not apply to:

(a) transfers to the Corporation;

(b) the designation of a beneficiary to receive benefits if the
Participant dies or, if the Participant has died, transfers to
or exercises by the Participant's beneficiary, or, in the
absence of a validly designated beneficiary, transfers by will
or the laws of descent and distribution;

(c) if the Participant has suffered a disability, permitted
transfers or exercises on behalf of the Participant by the
Participant's legal representative; or

(d) the authorization by the Committee of "cashless exercise"
procedures with third parties who provide financing for the
purpose of (or who otherwise facilitate) the exercise of
Awards consistent with applicable laws and the express
authorization of the Committee.

Notwithstanding anything to the contrary in this Section 1.8.2 or in
Section 1.8.3, Incentive Stock Options and Restricted Stock Awards
shall be subject to any and all additional transfer restrictions
imposed under the Code.

1.8.3 Further Exception to Limits On Transfer. The Committee may permit a
---------------------------------------
Participant's Award to be exercised and paid to certain "family
members" (as such term is used in the general instructions to a Form
S-8 Registration Statement under the Securities Act) of the
Participant. Any such permitted transfer shall be subject to the
condition that the Committee receive evidence satisfactory to it
that

the transfer is being made for estate and/or tax planning
purposes on a gratuitous or donative basis and without consideration
(other than nominal consideration or in exchange for an interest in
a qualified transferee).

2. Options.
-------

2.1 Grants. One or more Options may be granted under this Plan to any Eligible
------
Person. Each Option granted will be designated in the applicable Award
Agreement, by the Committee, as either an Incentive Stock Option, subject
to Section 2.4, or a Nonqualified Stock Option.

2.2 Option Price.
------------

2.2.1 Pricing Limits. The purchase price per share of the Common Stock
--------------
covered by each Option will be determined by the Committee at the
time of grant of the Award (and in no case will such purchase price
be less than the par value of the Common Stock), but in the case of
Incentive Stock Options the exercise price shall not be less than
100% and, in the case of an Incentive Stock Option granted to a
Participant described in Section 2.5, not less than 110% of the Fair
Market Value of the Common Stock on the date of grant.

2.2.2 Payment Provisions. The purchase price of any shares of Common Stock
------------------
purchased on exercise of an Option granted under this Plan will be
paid in full at the time of each purchase in one or a combination of
the following methods:

(a) in cash or by electronic funds transfer;

(b) by certified or cashier's check payable to the order of the
Corporation;

(d) subject to the proviso below, by the delivery of shares of
Common Stock already owned by the Participant, provided the
--------
Committee may in its absolute discretion limit the
Participant's ability to exercise an Option by delivering
previously owned shares, and any shares of Common Stock
delivered that were initially acquired from the Corporation
upon exercise of a stock option must have been owned by the
Participant at least six (6) months as of the date of
delivery.

Shares of Common Stock used to satisfy the exercise price of
an Option will be valued at their Fair Market Value on the
date of exercise. Without limiting the generality of the
foregoing, the Committee may provide that the Option can be
exercised and payment made by delivering a properly executed
exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Corporation the amount of
sale proceeds necessary to pay the exercise price and, unless
otherwise prohibited by the Committee or applicable law, any
applicable tax withholding under

Section 6.5. The Corporation will not be obligated to deliver
certificates for the shares unless and until it receives full
payment of the exercise price therefor, and all related
withholding obligations under Section 6.5 and other conditions
to exercise have been satisfied.

2.3 Vesting; Limits on Exercise; Other Limitations.
----------------------------------------------

2.3.1 Vesting. Unless the Committee or this Plan otherwise expressly
-------
provides, no Option will be exercisable or will vest until at least
six months after the initial Award Date. Unless otherwise provided
by the Committee in the applicable Award Agreement, each Option
shall become vested and exercisable as to 25% of the total number of
shares subject thereto on or after the first anniversary of the
applicable Award Date and thereafter shall become vested and
exercisable as to an additional 25% of the total number of shares
subject thereto on or after each of the second, third and fourth
anniversaries of the applicable Award Date, in each case subject to
adjustment under Section 3.3 of this Plan. Unless otherwise provided
by the Committee in the applicable Award Agreement, to the extent
that an Option is vested and exercisable, if the Participant does
not in any year purchase all or any part of the shares to which the
Participant is entitled, the Participant has the right cumulatively
thereafter to purchase, subject to Section 2.2.3, any shares not so
purchased and such right shall continue until the expiration or
earlier termination of the Option under this Plan or the Award
Agreement.

2.4 Limitations on Grant and Terms of Incentive Stock Options.
---------------------------------------------------------

2.4.1 $100,000 Limit. To the extent that the aggregate "Fair Market Value"
--------------
of stock with respect to which incentive stock options first become
exercisable by a Participant in any calendar year exceeds $100,000,
taking into account both Common Stock subject to Incentive Stock
Options under this Plan and stock subject to incentive stock options
under all other plans of the Company or any parent corporation,
options in excess of the $100,000 limit will be treated as
Nonqualified Stock Options. For this purpose, the "Fair Market
Value" of the stock subject to options will be determined as of the
date the options were awarded. In reducing the number of options
treated as incentive stock options to meet the $100,000 limit, the
most recently granted options will be treated as Nonqualified Stock
Options first. To the extent a reduction of simultaneously granted
options is necessary to meet the $100,000 limit, the Committee may,
in the manner and to the extent permitted by law, designate which
shares of Common Stock are to be treated as shares acquired pursuant
to the exercise of an Incentive Stock Option.

2.4.2 Other Code Limits. Incentive Stock Options may only be granted to
-----------------
employees of the Corporation or a Subsidiary that satisfies the
other eligibility requirements of the Code. There will be imposed in
any Award Agreement relating to Incentive Stock Options such other
terms and conditions as from time to time are

required in order that the Option be an "incentive stock option" as
that term is defined in Section 422 of the Code.

2.4.3 ISO Notice of Sale Requirement. Any Participant who exercises an
------------------------------
Incentive Stock Option shall give prompt written notice to the
Corporation of any sale or other transfer of the shares of Common
Stock acquired within one year after the exercise date or two years
after the Award Date.

2.5 Limits on 10% Holders. No Incentive Stock Option may be granted to any
---------------------
person who, at the time the Option is granted, owns (or is deemed to own
under Section 424(d) of the Code) shares of outstanding stock of the
Corporation (or a parent or subsidiary of the Corporation) possessing more
than 10% of the total combined voting power of all classes of stock of the
Corporation (or a parent or subsidiary of the Corporation), unless the
exercise price of such Incentive Stock Option is at least 110% of the Fair
Market Value of the stock subject to the Option and such Option by its
terms is not exercisable after the expiration of five years from the date
such Option is granted.

2.6 Option Repricing/Cancellation and Regrant/Waiver of Restrictions. Subject
-----------------------------------------------------------------
to Section 1.4 and Section 6.6 and the specific limitations on Awards
contained in this Plan, the Committee from time to time may authorize,
generally or in specific cases only, for the benefit of any Eligible Person
any adjustment in the exercise or purchase price, the vesting schedule, the
number of shares subject to, or the restrictions upon or the term of, an
Award granted under this Plan by amendment, by substitution of an
outstanding Award, by waiver or by other legally valid means. Such
amendment or other action may result among other changes in an exercise or
purchase price that is higher or lower than the exercise or purchase price
of the original or prior Award, provide for a greater or lesser number of
shares of Common Stock subject to the Award, or provide for a longer or
shorter vesting or exercise period.

2.7 Options and Rights in Substitution for Stock Options Granted by Other
---------------------------------------------------------------------
Corporations. Options and Stock Appreciation Rights may be granted to
------------
Eligible Persons under this Plan in substitution for employee stock options
granted by other entities, in connection with a distribution, merger or
reorganization by or with the granting entity or an affiliated entity, or
the acquisition by the Company, directly or indirectly, of all or a
substantial part of the stock or assets of the employing entity.

3. Stock Appreciation Rights (Including Limited Stock Appreciation Rights).
-----------------------------------------------------------------------

3.1 Grants. The Committee may grant to any Eligible Person Stock Appreciation
------
Rights either concurrently with the grant of another Award or in respect of
an outstanding Award, in whole or in part, or independently of any other
Award. Any Stock Appreciation Right granted in connection with an Incentive
Stock Option will contain such terms as may be required to comply with the
provisions of Section 422 of the Code and the regulations promulgated
thereunder, unless the holder otherwise agrees.

3.2 Exercise of Stock Appreciation Rights.
-------------------------------------

3.2.1 Exercisability. Unless the Award Agreement or the Committee
--------------
otherwise provides, a Stock Appreciation Right related to another
Award will be exercisable at such time or times, and to the extent,
that the related Award will be exercisable.

3.2.2 Effect on Available Shares. To the extent that a Stock Appreciation
--------------------------
Right is exercised, only the actual number of delivered shares of
Common Stock will be charged against the maximum amount of Common
Stock that may be delivered pursuant to Awards under this Plan. The
number of shares subject to the Stock Appreciation Right and the
related Option of the Participant will, however, be reduced by the
number of underlying shares as to which the exercise related, unless
the Award Agreement otherwise provides.

3.2.3 Stand-Alone SARs. A Stock Appreciation Right granted independently
----------------
of any other Award will be exercisable pursuant to the terms of the
Award Agreement but in no event earlier than six months after the
Award Date, except in the case of death or Total Disability.

3.2.4 Proportionate Reduction If an SAR extends to less than all the
-----------------------
shares covered by the related Award and if a portion of the related
Award is thereafter exercised, the number of shares subject to the
unexercised SAR shall be reduced only if and to the extent that the
remaining number of shares covered by such related Award is less
than the remaining number of shares subject to such SAR.

3.3 Payment.
-------

3.3.1 Amount. Unless the Committee otherwise provides, upon exercise of a
------
Stock Appreciation Right and the attendant surrender of an
exercisable portion of any related Award, the Participant will be
entitled to receive, subject to Section 6.5, payment of an amount
determined by multiplying:

(a) the difference (which shall not be less than zero) obtained by
subtracting the exercise price per share of Common Stock under
the related Award (if applicable) or the initial share value
specified in the Award from the Fair Market Value of a share
of Common Stock on the date of exercise of the Stock
Appreciation Right, by

(b) the number of shares with respect to which the Stock
Appreciation Right has been exercised.

3.3.2 Form of Payment. The Committee, in its sole discretion, will
---------------
determine the form in which payment will be made of the amount
determined under Section 3.3.1 above, either solely in cash, solely
in shares of Common Stock (valued at Fair Market Value on the date
of exercise of the Stock Appreciation Right), or partly in such
shares and partly in cash, but the Committee will have determined
that such exercise and payment are consistent with applicable law.
If the Committee permits the Participant to elect to receive cash or
shares (or a combination thereof) on such exercise, any such
election will be subject to such conditions as the Committee may
impose.

3.4 Limited Stock Appreciation Rights. The Committee may grant to any Eligible
---------------------------------
Person Stock Appreciation Rights exercisable only upon or in respect of a
change in control or any other specified event ("Limited SARs") and such
Limited SARs may relate to or operate in tandem or combination with, or
substitution for, Options, other SARs or other Awards (or any combination
thereof), and may be payable in cash or shares based on the spread between
the base price of the SAR and a price based upon or equal to the Fair
Market Value of the Common Stock during a specified period or at a
specified time within a specified period before, after or including the
date of such event.

4. Restricted Stock Awards.
-----------------------

4.1 Grants. The Committee may grant one or more Restricted Stock Awards to any
------
Eligible Person. Each Restricted Stock Award Agreement will specify the
number of shares of Common Stock to be issued to the Participant, the date
of such issuance, the consideration for such shares (but not less than the
minimum lawful consideration under applicable state law) to be paid by the
Participant, the extent (if any) to which and the time (if ever) at which
the Participant will be entitled to dividends, voting and other rights in
respect of the shares prior to vesting, and the restrictions (which may be
based on performance criteria, passage of time or other factors or any
combination thereof) imposed on such shares and the conditions of release
or lapse of such restrictions. Such restrictions will not lapse earlier
than six months after the Award Date, except to the extent the Committee
may otherwise provide. Stock certificates evidencing shares of Restricted
Stock pending the lapse of the restrictions ("Restricted Shares") will bear
a legend making appropriate reference to the restrictions imposed hereunder
and will be held by the Corporation or by a third party designated by the
Committee until the restrictions on such shares have lapsed and the shares
have vested in accordance with the provisions of the Award and Section 1.7.
Upon issuance of the Restricted Stock Award, the Participant may be
required to provide such further assurances and documents as the Committee
may require to enforce the restrictions.

4.2 Restrictions.
------------

4.2.1 Pre-Vesting Restraints. Except as provided in Sections 4.1 and 1.8,
----------------------
restricted shares comprising any Restricted Stock Award may not be
sold, assigned, transferred, pledged or otherwise disposed of or
encumbered, either voluntarily or involuntarily, until the
restrictions on such shares have lapsed and the shares have become
vested.

4.2.2 Dividend and Voting Rights. Unless otherwise provided in the
--------------------------
applicable Award Agreement, a Participant receiving a Restricted
Stock Award will be entitled to cash dividend and voting rights for
all shares issued even though they are not vested, but such rights
will terminate immediately as to any Restricted Shares which cease
to be eligible for vesting.

4.2.3 Cash Payments. If the Participant has paid cash in connection with
-------------
the grant of the Restricted Stock Award, the Award Agreement will
specify whether and to

what extent such cash will be returned (with or without an earnings
factor) as to any restricted shares that cease to be eligible for
vesting.

4.3 Return to the Corporation. Unless the Committee otherwise expressly
-------------------------
provides, Restricted Shares that remain subject to restrictions at the time
of termination of employment, or are subject to other conditions to vesting
that have not been satisfied by the time specified in the applicable Award
Agreement, will not vest and will be returned to the Corporation in such
manner and on such terms as the Committee provides.

5. Performance Share Awards and Stock Bonuses.
------------------------------------------

5.1 Grants of Performance Share Awards. The Committee may grant Performance
----------------------------------
Share Awards to Eligible Employees based upon such factors as the Committee
deems relevant in light of the specific type and terms of the award. An
Award Agreement will specify the maximum number of shares of Common Stock
(if any) subject to the Performance Share Award, the consideration (but not
less than the minimum lawful consideration) to be paid for any such shares
as may be issuable to the Participant, the duration of the Award and the
conditions upon which delivery of any shares or cash to the Participant
will be based. The amount of shares or other property that may be
deliverable pursuant to such Award will be based upon the degree of
attainment over a specified period of not more than 10 years (a
"performance cycle") as may be established by the Committee of such
measure(s) of the performance of the Company (or any part thereof) or the
Participant as may be established by the Committee. The Committee may
provide for full or partial credit, prior to completion of such performance
cycle or the attainment of the performance achievement specified in the
Award, in the event of the Participant's death, Retirement, or Total
Disability, a Change in Control Event or in such other circumstances as the
Committee (consistent with Section 6.10.3(b), if applicable) may determine.

5.2 Special Performance-Based Share Awards. Options or SAR's granted with an
--------------------------------------
exercise price not less than Fair Market Value at the applicable date of
grant for Section 162(m) purposes to Eligible Employees which otherwise
satisfy the conditions to deductibility under Section 162(m) are deemed
"Qualifying Awards." Without limiting the generality of the foregoing, and
in addition to Qualifying Awards granted under other provisions of this
Plan, other performance-based awards within the meaning of Section 162(m)
("Performance-Based Awards"), whether in the form of restricted stock,
performance stock, phantom stock or other rights, the vesting of which
depends on the performance of the Company on a consolidated, segment,
subsidiary, or division basis, with reference to revenue growth, net
earnings (before or after taxes, interest, depreciation, and/or
amortization), cash flow, return on equity or on assets or on net
investment, stock appreciation, total stockholder return, or cost
containment or reduction, or any combination thereof (the "business
criteria") relative to preestablished performance goals, may be granted
under this Plan. To the extent so defined, these terms are used as applied
under generally accepted accounting principles and in the Company's
financial reporting. The applicable business criterion or criteria and the
specific performance goals must be approved by the Committee in advance of
applicable deadlines under the Code and while the performance relating to
such goals remains substantially uncertain. The

applicable performance measurement period may not be less than one (except
as provided in Section 1.6) nor more than 10 years. Other types of
performance and non-performance awards may also be granted under the other
provisions of this Plan. The following provisions relate to all
Performance-Based Awards (other than Qualifying Awards) granted under this
Plan:

5.2.1 Eligible Class. The eligible class of persons for Awards under this
--------------
Section 5.2 is executive officers of the Corporation.

5.2.2 Maximum Award. Subject to Section 1.4.2, in no event will grants in
-------------
any calendar year to any one individual under this Section 5.2
relate to more than 200,000 shares.

5.2.3 Committee Certification. To the extent required by Section 162(m),
-----------------------
before any Performance-Based Award under this Section 5.2 is paid,
the Committee must certify that the material terms of the
Performance-Based Award were satisfied.

5.2.4 Terms and Conditions of Awards. The Committee will have discretion
------------------------------
to determine the restrictions or other limitations of the individual
Awards under this Section 5.2.

5.2.5 Stock Payout Features. In lieu of cash payment of an Award, the
---------------------
Committee may require or allow all or a portion of the Award to be
paid in the form of stock, Restricted Shares, an Option, or another
Award.

5.2.6 Adjustments for Material Changes. Performance goals or other
--------------------------------
features of an Award under this Section 5.2 may provide that they
(i) shall be adjusted to reflect a change in corporate
capitalization, a corporate transaction (such as a reorganization,
combination, separation, or merger) or a complete or partial
corporate liquidation, or (ii) shall be calculated either without
regard for or to reflect any change in accounting policies or
practices affecting the Company and/or the business criteria or
performance goals or targets, or (iii) shall be adjusted for any
other circumstance or event, or (iv) any combination of (i) through
(iii), but only to the extent in each case that such adjustment or
determination in respect of Performance-Based Awards would be
consistent with the requirements of Section 162(m) to qualify as
performance-based compensation.

5.3 Grants of Stock Bonuses. The Committee may grant a Stock Bonus to any
-----------------------
Eligible Person to reward exceptional or special services, contributions or
achievements in the manner and on such terms and conditions (including any
restrictions on such shares) as determined from time to time by the
Committee. The number of shares so awarded will be determined by the
Committee. The Award may be granted independently or in lieu of a cash
bonus.

5.4 Deferred Payments. The Committee may authorize for the benefit of any
-----------------
Eligible Person the deferral of any payment of cash or shares that may
become due or of cash otherwise payable under this Plan, and provide for
accredited benefits thereon based upon

such deferment, at the election or at the request of such Participant,
subject to the other terms of this Plan. Such deferral will be subject to
such further conditions, restrictions or requirements as the Committee may
impose, subject to any then vested rights of Participants.

6. Other Provisions.
----------------

6.1 Rights of Eligible Persons, Participants and Beneficiaries.
----------------------------------------------------------

6.1.1 Employment Status. Status as an Eligible Person will not be
-----------------
construed as a commitment that any Award will be made under this
Plan to an Eligible Person or to Eligible Persons generally.

6.1.2 No Employment Contract. Nothing contained in this Plan (or in any
----------------------
other documents related to this Plan or to any Award) will confer
upon any Eligible Person or Participant any right to continue in the
employ or other service of the Company, constitute any contract or
agreement of employment or other service or affect an employee's
status as an employee at will, nor shall interfere in any way with
the right of the Company to change such person's compensation or
other benefits, or to terminate his or her employment or other
service, with or without cause. Nothing in this Section 3.1.2,
however, is intended to adversely affect any express independent
right of such person under a separate employment or service contract
other than an Award Agreement.

6.1.3 Plan Not Funded. Awards payable under this Plan will be payable in
---------------
shares or from the general assets of the Corporation, and (except as
provided in Section 1.4.3) no special or separate reserve, fund or
deposit will be made to assure payment of such Awards. No
Participant, Beneficiary or other person will have any right, title
or interest in any fund or in any specific asset (including shares
of Common Stock) of the Company by reason of any Award hereunder.
Neither the provisions of this Plan (or of any related documents),
nor the creation or adoption of this Plan, nor any action taken
pursuant to the provisions of this Plan will create, or be construed
to create, a trust of any kind or a fiduciary relationship between
the Company and any Participant, Beneficiary or other person. To the
extent that a Participant, Beneficiary or other person acquires a
right to receive payment pursuant to any Award hereunder, such right
will be no greater than the right of any unsecured general creditor
of the Company.

6.1.4 Charter Documents. The Articles of Incorporation and By-Laws of the
-----------------
Corporation, as either of them may be amended from time to time, may
provide for additional restrictions and limitations with respect to
the Common Stock (including additional restrictions and limitations
on the transfer of shares of Common Stock) or priorities, rights and
preferences as to securities and interests prior in rights to the
Common Stock. To the extent that these restrictions and limitations
are greater than those set forth in this Plan or any Award
Agreement, such restrictions and limitations shall apply to any
shares of Common Stock

acquired pursuant to the exercise of Awards and are incorporated
herein by this reference.

6.2 Effects of Termination of Employment; Termination of Subsidiary Status;
-----------------------------------------------------------------------
Discretionary Provisions.
-------------------------

6.2.1 Dismissal for Cause. Unless otherwise provided in the Award
-------------------
Agreement or a written employment agreement between the Participant
and the Company and subject to earlier termination pursuant to or as
contemplated by Section 1.6 or 6.3, if a Participant is terminated
by the Company for Cause, the Option will terminate on the Severance
Date, whether or not then vested and/or exercisable.

6.2.2 Resignation. Unless otherwise provided in the Award Agreement or a
-----------
written employment agreement between the Participant and the Company
and subject to earlier termination pursuant to or as contemplated by
Section 1.6 or 6.3, if a Participant resigns (other than because of
a Total Disability or Retirement):

(a) the Participant will have until the date that is 30 days after
the Severance Date to exercise the Option (or portion thereof)
to the extent that it was vested on the Severance Date;

(b) the Option, to the extent not vested on the Severance Date,
shall terminate on the Severance Date; and

(c) the Option, to the extent not exercised, shall terminate at
the close of business on the last day of the 30-day period.

6.2.3 Layoff or Other Involuntary Termination. Unless otherwise provided
---------------------------------------
in the Award Agreement or a written employment agreement between the
Participant and the Company and subject to earlier termination
pursuant to or as contemplated by Section 1.6 or 6.3, if a
Participant is laid off or otherwise terminated at the will of the
Company (other than in circumstances constituting a termination
because of Total Disability, Retirement, or a termination by the
Company for Cause):

(a) the Participant will have until the date which is three (3)
months after the Severance Date to exercise the Option (or
portion thereof) to the extent that it was vested on the
Severance Date;

(b) the Option, to the extent not vested on the Severance Date,
shall terminate on the Severance Date; and

(c) the Option, to the extent not exercised, shall terminate at
the close of business on the last day of the 3-month period.

6.2.4 Death, Disability, or Retirement. Unless otherwise provided in the
--------------------------------
Award Agreement or a written employment agreement between the
Participant and the Company and subject to earlier termination
pursuant to or as contemplated by

Section 1.6 or 6.3, if a Participant's employment by the Company
terminates as a result of Total Disability or death, or the
Participant's Retirement:

(a) the Participant (or his or her Personal Representative or
Beneficiary, in the case of the Participant's disability or
death, respectively), will have until the date that is 12
months after the Severance Date to exercise the Option (or
portion thereof) to the extent that it was vested on the
Severance Date;

(b) the Option, to the extent not vested on the Severance Date,
shall terminate on the Severance Date; and

(c) the Option, to the extent not exercised, shall terminate at
the close of business on the last day of the 12-month period.

6.2.5 Events Not Deemed a Termination of Employment. Unless Company policy
---------------------------------------------
or the Committee otherwise provides, a Participant's employment
relationship with the Company shall not be considered terminated
solely due to any sick leave, military leave, or any other leave of
absence, authorized by the Company or the Committee. Any Option held
by any Eligible Person on approved leave of absence shall continue
to vest, unless the Committee or Company otherwise provides in
connection with the Award, the particular leave or by Company
policy. In no event shall an Option be exercised after the
expiration of the term set forth in the Award Agreement or the
termination of the Option in accordance with Section 6.3.

6.2.6 Effect of Change of Subsidiary Status. For purposes of this Plan and
-------------------------------------
any Option hereunder, if an entity ceases to be a Subsidiary, a
termination of employment will be deemed to have occurred with
respect to each Eligible Person in respect of such Subsidiary who
does not continue as an Eligible Person in respect of another entity
within the Company.

6.2.7 Committee Discretion. Notwithstanding the foregoing provisions of
--------------------
this Section 6.2, in the event of, or in anticipation of, a
termination of employment with the Company for any reason, other
than a discharge for cause, the Committee may increase the portion
of the Participant's Option available to the Participant, or
Participant's Beneficiary or Personal Representative, as the case
may be, or, subject to the provisions of Section 6.3, extend the
exercisability period upon such terms as the Committee determines
and expressly sets forth in or by amendment to the Award Agreement.

6.3 Adjustments; Acceleration.
-------------------------

6.3.1 Adjustments. Subject to Section 6.3.5, upon or in contemplation of
-----------
any reclassification, recapitalization, stock split (including a
stock split in the form of a stock dividend) or reverse stock split;
any merger, combination, consolidation or other reorganization; any
split-up; spin-off, or similar extraordinary dividend distribution
("spin-off") in respect of the Common Stock (whether in the form of
securities or property); any exchange of Common Stock or other
securities of the

Corporation, or any similar, unusual or extraordinary corporate
transaction in respect of the Common Stock; or a sale of
substantially all the assets of the Corporation as an entirety
("asset sale"); then the Committee shall, in such manner, to such
extent (if any) and at such time as it deems appropriate and
equitable in the circumstances:

(a) in any of such events, proportionately adjust any or all of
(i) the number of shares of Common Stock or the number and
type of other securities that thereafter may be made the
subject of Awards (including the specific maxima and numbers
of shares set forth elsewhere in this Plan), (ii) the number,
amount and type of shares of Common Stock (or other securities
or property) subject to any or all outstanding Awards, (iii)
the grant, purchase, or exercise price of any or all
outstanding Awards, (iv) the securities, cash or other
property deliverable upon exercise of any outstanding Awards,
or (v) the performance standards appropriate to any
outstanding Awards, or

(b) in the case of a reclassification, recapitalization, merger,
consolidation, combination, or other reorganization, spin-off
or asset sale, make provision for a cash payment or for the
substitution or exchange of any or all outstanding Awards or
the cash, securities or property deliverable to the holder of
any or all outstanding Awards based upon the distribution or
consideration payable to holders of the Common Stock upon or
in respect of such event.

The Committee may adopt such valuation methodologies for outstanding
Awards as it deems reasonable in the event of a cash or property
settlement and, in the case of Options, Stock Appreciation Rights or
similar rights, but without limitation on other methodologies, may
base such settlement solely upon the excess if any of the per share
amount payable upon or in respect of such event over the exercise or
strike price of the Award.

In any of such events, the Committee may take such action prior to
such event to the extent that the Committee deems the action
necessary to permit the Participant to realize the benefits intended
to be conveyed with respect to the underlying shares in the same
manner as is or will be available to stockholders generally.

6.3.2 Acceleration of Awards Upon Change in Control. Subject to Section
---------------------------------------------
6.3.5, the Committee may, in its discretion (in the Award Agreement,
at the time of the event, or otherwise), provide that upon the
occurrence of (or, as may be necessary to effectuate the purposes of
the acceleration, immediately prior to) a Change in Control Event:

(a) each Option and Stock Appreciation Right will become
immediately vested and exercisable,

(b) Restricted Stock will immediately vest free of restrictions,
and

The Committee may provide that only certain Awards (or portions
thereof) will be so accelerated, may determine the extent to which
acceleration will occur, may establish a different time in respect
of the Change in Control Event for the acceleration, and may accord
any Eligible Person a right to refuse any acceleration. A
Participant's Awards shall also be subject to any acceleration
provisions that are expressly set forth in a written agreement of
employment (if any) between the Company and the Participant in
effect on the grant date of the Award. Any acceleration of Awards
will comply with applicable legal requirements and, if necessary to
accomplish the purposes of the acceleration or if the circumstances
otherwise require, may be deemed by the Committee to occur (subject
to Sections 6.3.4 through 6.3.6) not greater than 30 days before or
only upon the consummation of the event.

6.3.3 Possible Early Termination of Accelerated Awards. If any Option or
------------------------------------------------
other right to acquire Common Stock under this Plan has been fully
accelerated as permitted by Section 6.3.2 but is not exercised prior
to (i) a dissolution of the Corporation, or (ii) an event described
in Section 6.3.1 that the Corporation does not survive, or (iii) the
consummation of an event described in Section 6.3.1 involving a
Change in Control Event approved by the Board, such Option or right
will terminate, subject to any provision that has been expressly
made by the Committee through a plan of reorganization approved by
the Board or otherwise for the survival, substitution, assumption,
exchange or other settlement of such Option or right.

6.3.4 Possible Rescission of Acceleration. If the vesting of an Option has
-----------------------------------
been accelerated in anticipation of an event and the Committee or
the Board later determines that the event will not occur, the
Committee may rescind the effect of the acceleration as to any then
outstanding and unexercised or otherwise unvested Options.

6.3.5 Pooling Exception. Any discretion with respect to the events
-----------------
addressed in this Section 6.3, including any acceleration of
vesting, shall be limited to the extent required by applicable
accounting requirements in the case of a transaction intended to be
accounted for as a pooling of interests transaction.

6.4 Compliance with Laws. This Plan, the granting and vesting of Awards under
--------------------
this Plan and the offer, issuance and delivery of shares of Common Stock
and/or the payment of money under this Plan or under Awards are subject to
compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law,
and federal margin requirements) and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for
the Corporation, be necessary or advisable in connection therewith. Any
securities delivered under this Plan may be subject to such restrictions
that the Committee may require to preserve a pooling of interests under
generally accepted accounting principles. The person acquiring such
securities will, if requested by the Corporation, provide such

assurances and representations to the Corporation as the Committee may deem
necessary or desirable to assure compliance with all applicable legal and
accounting requirements.

6.5 Tax Withholding.
---------------

6.5.1 Tax Withholding. Upon any exercise, vesting, or payment of any
---------------
Option or upon the disposition of shares of Common Stock acquired
pursuant to the exercise of an Incentive Stock Option prior to
satisfaction of the holding period requirements of Section 422 of
the Code, the Company shall have the right at its option to:

(a) require the Participant (or Personal Representative or
Beneficiary, as the case may be) to pay or provide for payment
of the amount of any taxes which the Company may be required
to withhold with respect to such Option event or payment;

(b) deduct from any amount payable in cash the amount of any taxes
which the Company may be required to withhold with respect to
such cash payment; or

(c) reduce the number of shares of Common Stock to be delivered by
(or otherwise reacquire) the appropriate number of shares of
Common Stock, valued at their then Fair Market Value, to
satisfy such withholding obligation.

The Committee may in its sole discretion (subject to Section 6.4)
grant (either at the time of the Option or thereafter) to the
Participant the right to elect, pursuant to such rules and subject
to such conditions as the Committee may establish, to have the
Corporation utilize the withholding offset under clause (c) above.

6.5.2 Tax Loans. If so provided in the Award Agreement or otherwise
---------
authorized by the Committee, the Corporation may, to the extent
permitted by law, authorize a loan to an Eligible Person in the
amount of any taxes that the Company may be required to withhold
with respect to shares of Common Stock received (or disposed of, as
the case may be) pursuant to a transaction described in Section
6.5.1. Such a loan will be for a term not greater than nine months
and at a rate of interest and pursuant to such other terms and
conditions as the Corporation, under applicable law, may establish.

6.6 Plan Amendment, Termination and Suspension.
------------------------------------------

6.6.1 Board Authorization. The Board may, at any time, terminate or, from
-------------------
time to time, amend, modify or suspend this Plan, in whole or in
part. No Awards may be granted during any suspension of this Plan or
after termination of this Plan, but the Committee will retain
jurisdiction as to Awards then outstanding in accordance with the
terms of this Plan.

6.6.2 Stockholder Approval. Any amendment to this Plan shall be subject to
--------------------
stockholder approval to the extent then required under Section 422
or 424 of the Code or any other applicable law, or deemed necessary
or advisable by the Board.

6.6.3 Amendments to Awards. Without limiting any other express authority
--------------------
of the Committee under but subject to the express limits of this
Plan, the Committee by agreement or resolution (a) may waive
conditions of or limitations on Awards to Eligible Persons that the
Committee in the prior exercise of its discretion has imposed,
without the consent of a Participant, and (b) may make other changes
to the terms and conditions of Awards that do not affect in any
manner materially adverse to the Participant, the Participant's
rights and benefits under an Award, provided that changes
contemplated by Section 6.3 or Section 6.6.5 will not be deemed to
constitute changes or amendments for purposes of this Section 6.6.

6.6.4 Limitations on Amendments to Plan and Awards. No amendment,
--------------------------------------------
suspension or termination of this Plan or change of or affecting any
outstanding Award will, without written consent of the Participant,
affect in any manner materially adverse to the Participant any
rights or benefits of the Participant or obligations of the
Corporation under any Award granted under this Plan prior to the
effective date of such change. Changes contemplated by Section 6.3
or Section 6.6.5 will not be deemed to constitute changes or
amendments for purposes of this Section 6.6.

6.6.5 Accounting Changes. Notwithstanding the foregoing provisions of this
------------------
Section 6.6.3 or Section 6.6.4, if the accounting treatment under
generally accepted accounting principles of any Options granted
hereunder would be materially more adverse to the Company than
anticipated at the time of approval of this Plan or the Options
(including, without limitation, if any Option(s) would render
pooling accounting unavailable to the Company with respect to any
transaction that would, in the absence of such Option(s), be
accounted for as a pooling of interests transaction) because of a
change in those principles or the interpretation or application
thereof by the Corporation's independent accountants, the Committee
may, in the exercise of its discretion and without the consent of
the Participant, amend the terms of such Options to the extent the
Committee deems necessary to eliminate such effect.

6.7 Privileges of Stock Ownership. Except as otherwise expressly authorized by
-----------------------------
the Committee or this Plan, a Participant will not be entitled to any
privilege of stock ownership as to any shares of Common Stock not actually
delivered to and held of record by the Participant. No adjustment will be
made for dividends or other rights as a stockholder for which a record date
is prior to such date of delivery.

6.8 Effective Date of the Plan. This Plan was effective upon its initial
--------------------------
approval by the Board (the "Effective Date").

6.9 Term of the Plan. Unless earlier terminated by the Board, this Plan will
----------------
terminate at the close of business on the day before the 10th anniversary
of the Effective Date (the "Termination Date") and no Awards may be granted
under this Plan after that date.

Unless otherwise expressly provided in this Plan or in an applicable Award
Agreement, any Award granted prior to the termination date may extend
beyond such date, and all authority of the Committee with respect to Awards
hereunder, including the authority to amend an Award, will continue during
any suspension of this Plan and in respect of Awards outstanding on the
termination date.

6.10 Governing Law/Construction/Severability.
---------------------------------------

6.10.1 Choice of Law. This Plan, the Awards, all documents evidencing
-------------
Awards and all other related documents will be governed by, and
construed in accordance with, the laws of the state of Delaware.

6.10.2 Severability. If a court of competent jurisdiction holds any
------------
provision invalid and unenforceable, the remaining provisions of
this Plan will continue in effect provided that the essential
economic terms of this Plan and any Award can still be enforced.

6.10.3 Plan Construction.
-----------------

(a) Rule 16b-3. It is the intent of the Corporation that
----------
transactions involving the Awards under this Plan, in the
case of Participants who are or may be subject to Section 16
of the Exchange Act, satisfy to the extent feasible the
requirements for applicable exemptions under Rule 16 so that
such persons (unless they otherwise agree) will be entitled
to the benefits of Rule 16b-3 or other exemptive rules under
Section 16 of the Exchange Act in respect of those
transactions and will not be subjected to avoidable
liability thereunder.

(b) Section 162(m). It is the further intent of the Company that
--------------
Options or SARs with an exercise or base price not less than
Fair Market Value on the date of grant and Performance-Based
Awards under Section 5.2 of this Plan that are granted to or
held by a person subject to Section 162(m) will qualify as
performance-based compensation under Section 162(m) to the
extent that the Committee authorizing the Award (or the
payment thereof, as the case may be) satisfies the
administrative requirements thereof. This Plan shall be
interpreted consistent with such intent.

6.11 Captions. Captions and headings are given to the sections and subsections
--------
of this Plan solely as a convenience to facilitate reference. Such headings
will not be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.

6.12 Non-Exclusivity of Plan. Nothing in this Plan will limit or be deemed to
-----------------------
limit the authority of the Board or the Committee to grant awards or
authorize any other compensation, with or without reference to the Common
Stock, under any other plan or authority.

6.13 No Restriction on Corporate Powers. The existence of the Plan and the
----------------------------------
Awards granted hereunder shall not affect or restrict in any way the right
or power of the Board or the stockholders of the Corporation to make or
authorize any adjustment, recapitalization, reorganization or other change
in the Corporation's capital structure or its business, any merger or
consolidation of the Corporation, any issue of bonds, debentures, preferred
or prior preference stocks ahead of or affecting the Corporation's capital
stock or the rights thereof, the dissolution or liquidation of the
Corporation or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding.

6.14 Effect on Other Benefits. Payments and other benefits received by a
------------------------
Participant under an Award made pursuant to this Plan shall not be deemed a
part of a Participant's regular, recurring compensation for purposes of the
termination, indemnity or severance pay law of any country or state and
shall not be included in, nor have any effect on, the determination of
benefits under any other employee benefit plan or similar arrangement
provided by the Corporation or a Subsidiary unless expressly so provided by
such other plan or arrangements. Awards under this Plan may be made in
combination with or in tandem with, or as alternatives to, grants, awards
or payments under any other Corporation or Subsidiary plan.

7. Definitions.
-----------

"Award" means an award of any Option, Stock Appreciation Right, Restricted
Stock, Stock Bonus, performance share award, dividend equivalent or deferred
payment right or other right or security that would constitute a "derivative
security" under Rule 16a-1(c) of the Exchange Act, or any combination thereof,
whether alternative or cumulative, authorized by and granted under this Plan.

"Award Agreement" means any writing setting forth the terms of an Award that has
been authorized by the Committee.

"Award Date" means the date upon which the Committee took the action granting an
Award or such later date as the Committee designates as the Award Date at the
time of the grant of the Award.

"Beneficiary" means the person, persons, trust or trusts designated by a
Participant, or, in the absence of a designation, entitled by will or the laws
of descent and distribution, to receive the benefits specified in the Award
Agreement and under this Plan if the Participant dies, and means the
Participant's executor or administrator if no other Beneficiary is designated
and able to act under the circumstances.

"Board" means the Board of Directors of the Corporation.

"Cause" means any act of theft, embezzlement, fraud, dishonesty, gross
negligence, repeated failure to perform assigned duties, a breach of fiduciary
duty to the Corporation or a breach of or deliberate disregard of the applicable
law or Company policy in any material respect, the unauthorized disclosure of
any trade secrets or confidential information of the Corporation, unfair
competition with the Corporation, inducement of any customer of the Corporation
to break any contract with the Corporation, or inducement of any principal for
whom the Corporation acts

as agent to terminate such agency relationship. For the purpose of this Plan, a
termination of services for Cause shall be deemed to occur (subject to
reinstatement upon a contrary final determination by the Board or Committee) on
the date when the Company delivers notice to the Participant of Cause and shall
be final in all respects on the date the Participant's service is terminated.
For purposes of this definition, the Corporation includes any affiliate of the
Corporation.

"Change in Control Event" means any of the following:

(a) Approval by the stockholders of the Corporation of the dissolution or
liquidation of the Corporation;

(b) Approval by the stockholders of the Corporation of a merger,
consolidation, or other reorganization, with or into, or the sale of
all or substantially all of the Corporation's business and/or assets
as an entirety to, one or more entities that are not Subsidiaries or
other affiliates of the Company (a "Business Combination"), unless (1)
as a result of the Business Combination more than 50% of the
outstanding voting power generally in the election of directors of the
surviving or resulting entity or a parent thereof (the "Successor
Entity") immediately after the reorganization are, or will be, owned,
directly or indirectly, by holders of the Corporation's voting
securities immediately before the Business Combination; and (2) no
Person (excluding the Successor Entity or an Excluded Person)
beneficially owns, directly or indirectly, more than 50% of the
outstanding shares or the combined voting power of the outstanding
voting securities of the Successor Entity, after giving effect to the
Business Combination, except to the extent that such ownership existed
prior to the Business Combination.

The stockholders before and after the Business Combination shall be
determined on the basis of the following assumptions: (1) there is no
change in the record ownership of the Corporation's securities from
the record date for such approval until the consummation of the
Business Combination, and (2) record owners other than affiliates of
the Corporation hold no securities of the other parties to such
reorganization.

(c) Approval by the stockholders of the Corporation of the sale of
substantially all of the Corporation's business and/or assets to a
person or entity that is not a Subsidiary or other affiliate; or;

(d) Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act other than an Excluded Person becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing more than
50% of the combined voting power of the Corporation's then outstanding
securities entitled to then vote generally in the election of
directors of the Corporation, other than as a result of (1) an
acquisition directly from the Company, (2) an acquisition by the
Company, (3) an acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or a Successor Entity;
or

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

"Commission" means the Securities and Exchange Commission.

"Committee" means the Board or one or more committees of director(s) appointed
by the Board to administer this Plan with respect to the Awards within the scope
of authority delegated to the acting Committee by the Board. At least one
committee will be comprised only of two or more directors, each of whom, in
respect of any decision involving both (i) a Participant affected by the
decision who is or may be subject to Section 162(m), and (ii) compensation
intended as performance-based compensation within the meaning of Section 162(m),
will be Disinterested; in acting on any transaction with or for the benefit of a
Section 16 Person, the participating members of such Committee also shall be
Non-Employee Directors within the meaning of Rule 16b-3.

"Common Stock" means the shares of the Common Stock of the Corporation and such
other securities or property as may become the subject of Awards, or become
subject to Awards, pursuant to an adjustment made under Section 6.3 of this
Plan.

"Company" means the Corporation and its Subsidiaries.

"Corporation" means Resources Connection, Inc., a Delaware corporation, and its
successors.

"Disinterested" means a director who is an "outside director" within the meaning
of Section 162(m) and any applicable legal or regulatory requirements.

"Early Terminate Date" means the date the Common Stock is first registered under
the Exchange Act and listed or quoted on a recognized national securities
exchange or in the NASDAQ National Market Quotation System.

"Eligible Employee" means an officer (whether or not a director) or employee of
the Company.

"Eligible Person" means an Eligible Employee, or any Other Eligible Person, as
determined by the Committee.

"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time.

"Excluded Person" means (a) any person described in and satisfying the
conditions of Rule 13d-1(b)(1) under the Exchange Act, (b) Evercore Capital
Partners L.P. (or its successor), (c) the Company, or (d) an employee benefit
plan (or related trust) sponsored or maintained by the Company or the Successor
Entity.

"Fair Market Value" on any date means:

(a) if the stock is listed or admitted to trade on a national securities
exchange, the closing price of the stock on the Composite Tape, as
published in the Western Edition of The Wall Street Journal, of the
principal national securities exchange on which the stock is so listed
or admitted to trade, on such date, or, if there is no trading of the
stock on such date, then the closing price of the stock as quoted on

such Composite Tape on the next preceding date on which there was
trading in such shares;

(b) if the stock is not listed or admitted to trade on a national
securities exchange, the last/closing price for the stock on such
date, as furnished by the National Association of Securities Dealers,
Inc. ("NASD") through the NASDAQ National Market Reporting System or a
similar organization if the NASD is no longer reporting such
information;

(c) if the stock is not listed or admitted to trade on a national
securities exchange and is not reported on the National Market
Reporting System, the mean between the bid and asked price for the
stock on such date, as furnished by the NASD or a similar
organization; or

(d) if the stock is not listed or admitted to trade on a national
securities exchange, is not reported on the National Market Reporting
System and if bid and asked prices for the stock are not furnished by
the NASD or a similar organization, the value as established by the
Committee at such time for purposes of this Plan.

Any determination as to fair market value made pursuant to this Plan
shall be determined without regard to any restriction other than a
restriction which, by its terms, will never lapse, and shall be
conclusive and binding on all persons.

"Incentive Stock Option" means an Option that is designated and intended as an
incentive stock option within the meaning of Section 422 of the Code, the award
of that contains such provisions (including but not limited to the receipt of
stockholder approval of this Plan, if the award is made prior to such approval)
and is made under such circumstances and to such persons as may be necessary to
comply with that section.

"Nonqualified Stock Option" means an Option that is designated as a Nonqualified
Stock Option and will include any Option intended as an Incentive Stock Option
that fails to meet the applicable legal requirements thereof. Any Option granted
hereunder that is not designated as an incentive stock option will be deemed to
be designated a nonqualified stock option under this Plan and not an incentive
stock option under the Code.

"Option" means an option to purchase Common Stock granted under this Plan. The
Committee will designate any Option granted to an employee of the Corporation or
a Subsidiary as a Nonqualified Stock Option or an Incentive Stock Option.

"Other Eligible Person" means any director of, or any individual consultant or
advisor or agent who renders or has rendered bona fide services (other than
---- ----
services in connection with the offering or sale of securities of the Company in
a capital raising transaction) to, the Company, and who (to the extent provided
in the next sentence) is selected to participate in this Plan by the Committee.
A person who is neither an employee, officer, nor director who provides bona
----
fide services to the Company may be selected as an Other Eligible Person only if
----
such person's participation in this Plan would not adversely affect (a) the
Corporation's eligibility to use Form S-8 to register under the Securities Act,
the offering of shares issuable under this Plan by the Company, or (b) the
Corporation's compliance with any other applicable laws.

"Participant" means an Eligible Person who has been granted and holds an Award
under this Plan.

"Performance Share Award" means an Award of a right to receive shares of Common
Stock under Section 5.1, or to receive shares of Common Stock or other
compensation (including cash) under Section 5.2, the issuance or payment of
which is contingent upon, among other conditions, the attainment of performance
objectives specified by the Committee.

"Personal Representative" means the person or persons who, upon the disability
or incompetence of a Participant, has acquired on behalf of the Participant, by
legal proceeding or otherwise, the power to exercise the rights or receive
benefits under this Plan by virtue of having become the legal representative of
the Participant.

"Plan" means this Resources Connection, Inc. 1999 Long-Term Incentive Plan, as
it may hereafter be amended from time to time (formerly the RC Transaction Corp.
1999 Long-Term Incentive Plan).

"Restricted Shares" or "Restricted Stock" means shares of Common Stock awarded
to a Participant under this Plan, subject to payment of such consideration, if
any, and such conditions on vesting (which may include, among others, the
passage of time, specified performance objectives or other factors) and such
transfer and other restrictions as are established in or pursuant to this Plan
and the related Award Agreement, for so long as such shares remain unvested
under the terms of the applicable Award Agreement.

"Retirement" means retirement with the consent of the Company or, from active
service as an employee or officer of the Company on or after attaining (a) age
55 with ten or more years of employment with the Company, or (b) age 65.

"Rule 16b-3" means Rule 16b-3 as promulgated by the Commission pursuant to the
Exchange Act, as amended from time to time.

"Section 16 Person" means a person subject to Section 16(a) of the Exchange Act.

"Section 162(m)" means Section 162(m) of the Code and the regulations
promulgated thereunder.

"Securities Act" means the Securities Act of 1933, as amended from time to time.

"Severance Date" means the date of a Participant's termination of employment
with the Company for any reason whatsoever.

"Stock Appreciation Right" or "SAR" means a right authorized under this Plan to
receive a number of shares of Common Stock or an amount of cash, or a
combination of shares and cash, the aggregate amount or value of which is
determined by reference to a change in the Fair Market Value of the Common
Stock.

"Stock Bonus" means an Award of shares of Common Stock granted under this Plan
for no consideration other than past services and without restriction other than
such transfer or other restrictions as the Committee may deem advisable to
assure compliance with law.

"Subsidiary" means any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation.

"Total Disability" means a "total and permanent disability" within the meaning
of Section 22(e)(3) of the Code and, with respect to Awards other than Incentive
Stock Options, such other disabilities, infirmities, afflictions, or conditions
as the Committee may include.

An extra section break has been inserted above this paragraph. Do not
delete this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.

Please date, sign and mail your
proxy card back as soon as possible!

Annual Meeting of Stockholders

RESOURCES CONNECTION, INC.

October 5, 2001

V Please Detach and Mail in the Envelope Provided V
--------------------------------------------------------------------------------

A [X] Please mark your
votes as in this
example.

The Board of Directors recommends a vote FOR each of the nominees listed in
Proposal 1 and FOR Proposal 2

FOR WITHHELD
ALL FOR ALL Nominee:
1. Election of the [_] [_] Karen M. Ferguson
nominees listed C. Stephen Mansfield
at right Leonard Schutzman
for a three-year term as members of the
Company's Board of Directors:

INSTRUCTION: To withhold authority to vote for
any individual, write that nominee's name in the
space provided below.

-------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of an amendment to the Company's [_] [_] [_]
1999 Long-Term Incentive Plan.

3. In their discretion, upon any other matters as may properly come before the
meeting or at any adjournment thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREBY BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR EACH NOMINEE IN PROPOSAL 1 and FOR PROPOSAL 2. IF ANY NOMINEE BECOMES
UNAVAILABLE FOR ANY REASON, THE PERSONS NAMED AS PROXIES SHALL VOTE FOR THE
ELECTION OF SUCH OTHER PERSON AS THE BOARD OF DIRECTORS MAY PROPOSE TO REPLACE
SUCH NOMINEE.

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

________________________ Dated _______, 2001 ________________________ Dated _______, 2001
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER

NOTE: (This Proxy must be signed exactly as your name appears hereon.
Executors, administrators, trustees, etc., should give full title as
such. If the shares are held in joint name, either person may sign this
Proxy. If the stockholder is a corporation, a duly authorized officer
should sign on behalf of the corporation and should indicate his or her
title.)