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                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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

                                   FORM 10-K

                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                         COMMISSION FILE NUMBER 0-28293

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

                                AGENCY.COM LTD.

             (Exact Name of Registrant as Specified in Its Charter)

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<S>                                        <C>
             DELAWARE                                    13-3808969
  (State or other jurisdiction of          (I.R.S. Employer Identification Number)
  incorporation or organization)

   20 EXCHANGE PLACE, 15TH FLOOR                            10005
        NEW YORK, NEW YORK                               (ZIP Code)
  (Address of Principal Executive
             Offices)
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       Registrant's Telephone Number, including Area Code: (212) 358-2600

           Securities Registered Under Section 12(b) of the Act: NONE

               Securities Registered Under Section 12(g) the Act:

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                               TITLE OF CLASS                      NAME OF EXCHANGE ON WHICH REGISTERED
                       ------------------------------              ------------------------------------
<S>                    <C>                              <C>        <C>                                    <C>
                       COMMON STOCK, $0.001 PAR VALUE                   NASDAQ NATIONAL MARKET
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    Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/  No / /

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

    There were 38,541,506 shares of Common Stock outstanding as of March 26,
2001. The aggregate market value of the Common Stock held by non-affiliates of
the Registrant at March 26, 2001 was approximately $15.1 million. Such aggregate
market value is computed by reference to the last sales price of the Common
Stock on such date.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE

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                               TABLE OF CONTENTS

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                                         PART I
ITEM 1.           Business....................................................      1
ITEM 1A           Risk Factors................................................     11
ITEM 2.           Properties..................................................     20
ITEM 3.           Legal Proceedings...........................................     20
ITEM 4.           Submission of Matters to a Vote of Security Holders.........     20

                                        PART II
ITEM 5.           Market for Registrant's Common Equity and Related
                  Stockholder Matters.........................................     21
ITEM 6.           Selected Financial Data.....................................     22
ITEM 7.           Management's Discussion and Analysis of Financial Condition
                  and Results of Operations...................................     24
ITEM 7A.          Quantitative and Qualitative Disclosure About Market Risk...     39
ITEM 8.           Financial Statements and Supplementary Data.................     40
ITEM 9.           Changes in and Disagreements with Accountants on Accounting
                  and Financial Disclosure....................................     40

                                        PART III
ITEM 10.          Directors and Executive Officers of the Registrant..........     40
ITEM 11.          Executive Compensation......................................     40
ITEM 12.          Security Ownership of Certain Beneficial Owners and
                  Management..................................................     40
ITEM 13.          Certain Relationships and Related Party Transactions........     40

                                        PART IV
ITEM 14.          Exhibits, Financial Statement Schedules, and Reports on Form
                  8-K.........................................................     41
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    THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. THESE FORWARD-LOOKING STATEMENTS ARE USUALLY ACCOMPANIED BY WORDS
SUCH AS "BELIEVES", "ANTICIPATES", "PLANS", "EXPECTS" AND SIMILAR EXPRESSIONS.
OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY
THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS, AS MORE FULLY
DESCRIBED IN THIS SECTION AND ELSEWHERE IN THIS REPORT.

                                     PART I

ITEM 1. BUSINESS

                                    GENERAL

    AGENCY.COM Ltd. and its subsidiaries (collectively the "Company" or
"AGENCY.COM") is an Internet, interactive television and mobile business
professional services firm serving global markets. We provide our clients with
an integrated set of strategy, creative and technology services that take them
from concept to launch and operation of their interactive business. We deliver
our services through our multi-disciplinary teams of strategy, creative,
technology and project management specialists. These services help our clients
create and enhance relationships with their customers, staff, business partners
and suppliers.

    Our strategy services include advising clients on business models for their
interactive businesses, devising strategies so that clients can open new online
distribution and sales channels, identifying opportunities to achieve
operational efficiencies by pursuing online initiatives, and planning for the
operations and organization necessary to support an online business. Our
creative services include advising clients on how to effectively bring their
brands online, developing graphic designs and Web site structure for client Web
sites, and conducting online marketing campaigns. Our technology services
include recommending and installing appropriate hardware and software networks,
integrating Internet and older information technology systems, and implementing
electronic commerce systems to enable online sales, support and communication.
Our interactive television services enable our clients to enhance relationships
with their customers.

    We believe that our experience in providing Internet, interactive television
and mobile business professional services enhances our ability to meet the needs
of clients. Since our inception in 1995, we have provided services to more than
300 clients. Our largest clients during the year ended December 31, 2000 were
Reuters, British Airways, One 2 One, Maritz and Incyte. We believe that our
focus on long-term relationships with clients allows us to provide a broader and
more effective range of services.

    We believe interactive services are particularly effective when used to
extend and enhance the relationship that exists between a company and its
customers, staff, partners and suppliers. We intend to be the Internet,
interactive television and mobile business professional services firm of choice
for companies comprising Business Week magazine's Global 1000, which includes
companies with the largest market capitalizations worldwide.

                               INDUSTRY OVERVIEW

    Interactive technology is becoming an integral part of many people's lives.
Individuals and businesses are increasingly using the Internet, interactive
television and mobile business to find information, communicate and conduct
business. The increasing acceptance of interactive technology has created
numerous opportunities for companies that seek to grow and are challenged by
highly competitive and rapidly changing markets and demands for increased
efficiencies. Companies take advantage of interactive technology to strengthen
customer relationships, improve operational efficiency and spur product
innovation.

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    We believe that companies have found that merely enabling online
transactions and commerce does not ensure success in interactive business.
Consumers want more than the mechanical ability to transact with a company
online. They want to interact with a company that not only markets to them but
also is responsive to their needs. By successfully satisfying these needs, we
believe that businesses can build a long-lasting, ongoing interactive
relationship that fosters customer loyalty and increases margins.

    Developing successful interactive businesses that promote interactive
relationships requires a special set of capabilities. Developers of these
businesses must provide integrated strategy, creative, technology and project
management services. In addition, developers must have the ability to understand
the needs of customers and fulfill them. Few companies possess this
multi-disciplinary expertise as it is usually divided into separate information
technology, marketing and planning groups. Further, companies lack the
management and technical infrastructure required to develop and support
interactive technology.

    Therefore, companies seeking to do business on the Internet are increasingly
engaging Internet, interactive television and mobile business professional
services firms to provide integrated strategy, creative, technology and project
management services. We believe that companies are best served by firms that
have overcome the cultural and operational challenges of integrating strategy,
creative, technology and project management services into a single offering and
that have a proven methodology centered on the needs of customers.

                              AGENCY.COM APPROACH

    AGENCY.COM provides a broad range of integrated services that enable
businesses to use interactive technologies to develop and enhance long-term
relationships with their customers. AGENCY.COM's approach includes the following
key elements:

INTEGRATED FULL-SERVICE OFFERING

    We provide integrated strategy, creative, technology and project management
services in a seamless package. We start from the initial assessment of a
client's positioning and needs and work through post-implementation analysis and
development. We believe that our comprehensive integrated service offering
results in time and cost savings for our clients and also increases the
likelihood that their projects will be completed successfully.

INTERACTIVE TECHNOLOGY FOCUS AND EXPERIENCE

    Since our founding in 1995, we have focused on interactive technologies and
their implications for businesses. Our interactive technology focus allows us to
best fulfill our clients' needs and continuously refine our services while
staying at the forefront of interactive technology's rapid evolution.

CUSTOMER DRIVEN

    In planning, designing and deploying interactive services and strategies, we
base our work on the needs of our clients' customers. We focus on our clients'
customers because these individuals ultimately determine the success of our
clients' interactive businesses. Our approach enables us to establish a solid
and effective base from which our clients may develop their interactive
relationships. We work with our clients to analyze their customers' needs to
create interactive strategies best suited for the client and these customers.

RELATIONSHIPS WITH CLIENTS

    We seek to develop long-term relationships with our clients. We become
familiar with their businesses and work closely with senior management to
understand, predict and address our clients'

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evolving strategic business needs. Upon engagement, we assign to the client a
dedicated multi-disciplinary team of professionals, who work with our client
during each phase of the initial project and on future projects. We share our
experience and knowledge with our clients to enhance their familiarity with
interactive technology and its capabilities. We also establish extranets with
our clients to improve the exchange of information on all ongoing projects.

AGENCY.COM CULTURE

    Our culture is based on the principles of honoring the value of individuals
working as a team, growing through learning and knowledge-gathering, embracing
change and encouraging innovation. We recognize that we succeed as a firm only
when clients benefit from our work. We believe that nurturing our culture and
values enables us to deliver innovative solutions and attract and retain top
professionals. Our management and operational infrastructure foster our culture.
For example, substantially all of our employees have an equity stake in the
company through our stock option plan, and we have developed and put into
practice a number of internal mentoring and learning programs.

                              AGENCY.COM STRATEGY

    AGENCY.COM's goal is to build upon our position as an international provider
of Internet, interactive television and mobile business professional services.
To achieve this goal, we are pursuing the following strategies:

CONTINUE TO BUILD LONG-TERM RELATIONSHIPS WITH OUR CLIENTS AND OTHER
  INTERNATIONAL COMPANIES

    We believe that strong, long-term relationships with clients yield
significant benefits both to our clients and to our business. The depth and
breadth of our client relationships are demonstrated by our integral involvement
in developing interactive strategies, including the planning and budgeting
process, for a number of our large clients. In addition, we have retainer-based
relationships with a number of these clients and plan to increase the number of
clients on retainer. We believe that our record of client satisfaction has
contributed to an increase in the amount, scope and complexity of services
requested by many of our clients. As an indication of our success, 17 of our top
20 clients in 1999 continued to engage us in 2000.

FURTHER ENHANCE OUR MULTI-DISCIPLINARY TEAM APPROACH

    Because our work requires expert knowledge of multiple disciplines, we
believe that Internet, interactive television and mobile business professional
services are most effective when delivered through integrated,
multi-disciplinary client teams. We provide all our services through
client-centered teams that include strategy, creative, technology, project
management and client services professionals. Our client teams, and the culture
of teamwork that they enforce, shape the overall structure and operation of our
company. In order to deliver to our clients a broad range of sophisticated
services on an international basis, all of our offices operate together as a
single, unified organization rather than a set of competing entities. We will
continue to invest in and nurture our team-based organization in order to better
fulfill our clients' needs.

DEVELOP STRONG POSITIONS IN SERVICES TO BENEFIT OUR CLIENTS

    We will continue to build strong positions in services such as interactive
advisory, consulting and planning services, interactive commerce and
communication services and online branding and marketing services. We believe
that these services provide opportunities for strong growth, and help
differentiate us from our competitors. We have developed, and will continue to
develop, new interactive strategies as our clients' needs evolve and as new
technologies emerge. As with our current offerings, any new service that we
offer to our clients will incorporate a mix of our strategy, creative and
technology capabilities. Our strategies may incorporate technologies such as
wireless devices and devices suited to

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high bandwidth Internet connections for transmission of voice, video, data and
fax, known as broadband network devices.

EXTEND OUR GEOGRAPHIC REACH

    We believe that significant opportunities exist for our services beyond our
current locations, including serving existing and new clients in other markets.
We have expanded, and intend to continue to expand, our geographic presence in
key locations based on our clients' needs and market opportunities. We plan to
continue to expand primarily through organic growth along with possible targeted
acquisitions. Extending our geographic reach allows us to better serve our
multi-national clients by providing services locally through our regional
offices while taking advantage of our international resources and knowledge
base. We believe our ability to provide Internet, interactive television and
mobile business professional services internationally provides us with a
competitive advantage. We currently have offices located in the United States
and Europe, and have resources in additional locations through our minority
investments.

ATTRACT AND RETAIN THE HIGHEST QUALITY PROFESSIONALS AND FACILITATE EMPLOYEE
  DEVELOPMENT THROUGH TRAINING, CULTURE AND SUPPORT

    We believe that attracting and retaining high quality professionals is
critical to our success. Our culture is an integral part of our ability to
attract and retain quality professionals. We provide a stimulating and nurturing
work environment to increase employee satisfaction. We will continue to invest
in knowledge transfer, training and staff development resources for our
employees. In addition, we offer a competitive compensation package, including
broad-based equity ownership through our stock option plan and employee stock
purchase plan.

ENHANCE AWARENESS OF AGENCY.COM AS AN INTERNATIONAL PROVIDER OF INTERNET,
  INTERACTIVE TELEVISION AND MOBILE BUSINESS PROFESSIONAL SERVICES

    AGENCY.COM has built a recognized brand in the Internet, interactive
television and mobile business professional services market. Our internal
marketing and corporate communications teams promote our brand through speaking
engagements, event sponsorships, interviews and industry conferences. We receive
additional promotion from media coverage and from the numerous awards we have
received for our work. Our brand enables us to more effectively attract clients
and employees. We seek to be the most recognized Internet, interactive
television and mobile business professional services firm. Our goal is to be
among the few firms that the Global 1000 consider when choosing an Internet,
interactive television and mobile business professional services provider.

                              AGENCY.COM SERVICES

    We provide fully integrated Internet, interactive television and mobile
business professional services to our clients that enhance the development of
their interactive relationships. We conceive and implement interactive services
and strategies that add value to our clients businesses. We deliver to our
clients services that include strategic business planning, Web site content
development, graphic design, computer programming, interactive television and
mobile business services. Each client benefits from our fully integrated service
offering delivered by a team of strategy, creative and technology professionals.
Each engagement has a project manager who coordinates and oversees the team. The
project manager reports to the relationship manager who has direct
responsibility for the client relationship. The following is a description of
the primary components of our service offerings:

STRATEGIC SERVICES

    AGENCY.COM helps clients translate their corporate goals and objectives into
interactive strategies. We work closely with our clients to understand and
analyze their businesses. We help our

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clients formulate and execute their interactive strategies in the context of
their business and marketing goals, operational methods and success criteria.
Our strategic services include assisting our clients in:

    - establishing the operational guidelines and management structure necessary
      to execute their interactive strategies;

    - helping clients to formulate interactive strategies to reach new
      customers;

    - reducing the costs of serving existing customers;

    - improving the efficiency of internal operations; and

    - promoting customer loyalty and designing appropriate and innovative ways
      to extend our clients' brands on the Internet, interactive television and
      through mobile channels.

INTERNET COMMERCE AND COMMUNICATION SERVICES

    We help our clients use the Internet as an effective means of communicating
and transacting with customers. We create Internet resources such as Web sites
for our clients that encompass the entire customer relationship, including:

    - introducing relevant, customized information, products and services;

    - demonstrating the benefits of their products and services and gaining
      customer acceptance;

    - facilitating transactions; and

    - providing ongoing service tailored to the needs of and based on the
      feedback from each customer.

CREATIVE SERVICES

    We assist clients in designing online resources that are easy for customers
and others to use and that effectively present our clients' brands. In all of
our creative work, we work closely with our clients to understand their brands
and the needs of their customers. We advise clients on how they can bring their
brands online in a manner consistent with their other marketing and product
branding. We often create graphical elements and gauge their effectiveness
through sample group testing. We often coordinate online marketing campaigns
with clients' traditional advertising agencies.

SYSTEMS INTEGRATION

    We recommend and install appropriate hardware and software networks that
support our clients' interactive strategies. We provide integration services to
link disparate third party systems. We often integrate interactive-based
technologies with our clients' older information technology systems, such as
legacy and client-server systems. We also adapt and develop custom software
solutions and build add-on components to our clients' existing software
applications. Systems integration projects have included the integration of
sales systems, accounting systems and inventory systems to function over the
Internet.

INTERACTIVE TELEVISION PRACTICE GROUP ("ITV PRACTICE GROUP")

    AGENCY.COM's iTV Practice Group offers a comprehensive range of solutions
supporting interactive television services and programming. This practice group
was formed in late 1999 and has generated successful solutions for multiple
clients across multiple broadcasting environments. Our strategy and business
planning services help companies meet the challenges of the interactive TV
market. We work closely with our clients in order to deliver a tailored solution
that fits our clients' needs from business plans to service creation, system
engineering and integration. In delivering our services, we help our clients
adapt the new technologies to their businesses.

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    Our interactive services enable our clients to enhance relationships with
their customers. Our interactive television solutions demonstrate the depth and
breadth of our experience and include: Electronic Program Guides, portals,
Mosaic browsing screens, games, TV e-mail and chant news and information
service, catalog and shopping services delivered across multiple platforms in
multiple languages and broadcast in multiple territories. Interactive TV
standards, broadcasting technologies, set-top boxes and operating systems are
all gradually evolving, but at present they are complex and restrictive. Our iTV
Practice Group's technical team has taken these restrictive technologies and
built upon them to create robust applications, tools and software. Our mission
is to improve the manner in which these technologies are implemented and by
doing so, better enable our clients' ability to participate in the interactive
TV marketplace. We believe that we can provide companies with a proven broadcast
software infrastructure that is platform-independent. Our software framework
enables broadcasters to build, test, deploy and manage live high-quality
interactive TV services--making the technology a real tool for business.

    Our interactive TV services focus on three main areas:

    - crafting an engaging television experience for the target audience, using
      our expertise in interaction and interface design;

    - assist in conceiving or validating appropriate business models to support
      interactive television services and programming using our knowledge; and

    - executing and implementing software solutions by designing and deploying
      the technical infrastructure necessary for system operators and content
      providers. This includes our own tools and applications, as well as
      best-of-breed products from hardware and software specialists.

    Given the complexity and need for speed inherent in today's interactive TV
environment, these services are supported by AGENCY.COM's longstanding core
competencies in systems integration and project management.

MOBILE BUSINESS GROUP ("M-BUSINESS GROUP")

    We have been engaged with mobile channels for two years and have steadily
built a portfolio of world-class mobile solutions utilizing the services of
employees who are knowledgeable and experienced in the complications of the
Internet--regardless of the channel in which it arrives.

    The Company's M-Business Group services range from business strategy and
planning through implementation and back-end integration using custom built
applications. We engage lateral thinking strategists, information architects,
designers, writers and account services people who work together as a team from
the beginning. We believe that we create solutions and look at them from
multiple perspectives so the end product is fully integrated and dynamic.

    We execute business modeling for clients so they can develop unique value
propositions in the increasingly competitive industry of mobile services. We
also devise campaigns that offer customers appropriate services and messages,
which are personal, location relevant and timely. We believe that our solutions
can enable full personalization for lifestyle and business applications, and
develop value-added services and the niche/unique offerings that brands need in
this fast-moving space.

    We build mutually beneficial relationships between our clients and third
parties that help to extend a client's brand in order to generate incremental
revenue. We believe that we are experienced in creating the right mix and
balance for clients and partners. We understand the customer experiences of
mobile business and seek to optimize our clients' business applications and
marketing campaigns.

    Our ability to be successful in building mobile portals will depend upon a
number of factors, including our ability to understand what we believe to be the
key factors behind profitable m-commerce operations, such as ensuring user
security and authentication or preparing for the delivery of personal, localized
applications through global-positioning and location-based services. The rapid
development

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within the m-commerce space has the potential to present significant
opportunities over the course of the next few years.

                         AGENCY.COM COMPASS METHODOLOGY

    Our "Compass" methodology guides project management and execution. We
believe this methodology enables us to provide consistent quality on all
engagements and maximizes the value we deliver to our clients. Compass can be
employed on projects of all types, sizes and geographic boundaries. Our process
follows four distinct phases: Discovery, Design, Production and Deployment.
Within any phase of our methodology, we incorporate a series of steps--Check,
Adjust and Assess--which ensure that our clients' expectations for quality are
met in each stage. We refine our methods within Compass's four phases based on
input from clients and client teams. We also integrate the best practices of the
companies we acquire into Compass.

DISCOVERY

    During the Discovery phase, we assess the client's positioning and needs,
with an emphasis on the client's customers, and analyze the tasks and resources
required to deliver an effective interactive strategy. Based on this
understanding, we develop an initial plan for designing and completing the
project. AGENCY.COM works closely with the client to formulate and finalize the
strategy and services to be provided.

DESIGN

    During the Design phase, we define the creative components, technical design
and information architecture. These components are integrated and represented in
a detailed design document, which is reviewed by the client at numerous stages.
We build a prototype and conduct usability testing during this phase to ensure
that the design is best suited to the client's needs. The final design document
serves as a blueprint for the ensuing phases.

PRODUCTION

    During the Production phase, we develop and integrate all of the creative,
technical and information components. We then test the system jointly with the
client and optimize the performance of the hardware and software. At the end of
this phase, we deliver to our client a product that is ready for deployment.

DEPLOYMENT

    During the Deployment phase, we formally "launch" the client's online system
following all final testing and acceptance. We also educate and train our client
to use and maintain the finished application and, where appropriate, transfer
full control of the product to our client.

    We finish projects with a post-implementation evaluation, including
measurement against initial benchmarks and a client evaluation of AGENCY.COM's
work. Following the completion of a project, we document non-proprietary
knowledge and experiences, such as revised work plans or enhanced knowledge of a
particular technology, through post-engagement, internal reviews. This
information is then disseminated to our employees both through our internal
intranet and specific training sessions. By broadening our professionals'
knowledge base and improving their understanding of their field, we are able to
assist them in better serving client needs.

    Following the completion of the Deployment phase, at the request of the
client, the AGENCY.COM client team often returns to the Discovery phase in order
to further develop and evolve our client's interactive business.

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                               PEOPLE AND CULTURE

    We believe that our people and culture represent a significant competitive
advantage and that our ability to scale innovation and creativity is at the core
of our success to date. To successfully compete in the future, we must continue
to identify, recruit, hire and retain outstanding professionals. We continually
nurture, develop and evolve a culture that supports innovation and creativity.

RECRUITING, RETAINING AND GROWING

    We promote and support each employee's personal growth through a variety of
career development programs. Internal knowledge management resources gather the
collective experience of client teams and individuals. Informal, internal
educational programs expose staff to new experiences. Examples include InspireU,
a collection of employee-led training courses, and Urban Desires, an online
magazine owned by our founders that is used to explore advanced and artistic
interactive experiences. More formal programs, involving internal and external
resources, focus growth along specific career tracks. Examples include seminars
with outside experts and multi-day training workshops.

    Recruiting and training are important to us. A dedicated recruitment group
works with management to fulfill staffing objectives on a regional and
international basis. New hires are commonly obtained through referrals from
current and former staff as well as from recruiters and self-initiated
referrals.

    Once we have hired an employee, our focus shifts to retention. In addition
to offering competitive compensation, we believe that we retain employees by
offering them a meaningful career path. Employees are reviewed by supervisors,
co-workers and employees they supervise in a 360-degree review process that is
integral to our team approach.

SCALING INNOVATION AND CREATIVITY

    We believe that possessing a single, unified culture in all offices
internationally is critical to fulfilling our business objectives. We pursue a
number of initiatives to emphasize and reinforce our culture and values. We
encourage regional managers to share resources across offices. Our client teams
combine individuals with experience in a variety of backgrounds to collaborate,
innovate and deliver services as a single unit. We instill and maintain our
culture throughout our company by promoting our core values:

    - We succeed only when our clients benefit from our work.

    - We deliver excellence with the highest standards of integrity.

    - We honor the dignity and value of individuals working as a team.

    - We celebrate diversity of people, ideas and cultures.

    - We seek to grow through learning and knowledge gathering.

    - We embrace change and encourage innovation.

                              SALES AND MARKETING

    We seek to generate revenues from our existing and new clients. We continue
to work with many of our early clients. We target the Global 1000 and top
private companies. For the year ended December 31, 2000, no client accounted for
more than 10% of our revenues.

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                             EXISTING RELATIONSHIPS

    We focus on long-term relationships with our clients. To facilitate this, we
assign a relationship manager to each of our clients. This relationship manager
leads the client engagement and proactively works with the client to refine and
further develop its interactive strategies. Our client team, led by a
relationship manager, identifies areas for potential business growth and
positions AGENCY.COM as the provider of these services.

                            NEW BUSINESS DEVELOPMENT

    To target new clients, we have more than 30 New Business Development
professionals located in our regional offices who seek to develop relationships
with companies that have businesses that can benefit from interactive services
and strategies, are willing to make a significant commitment to pursuing
interactive opportunities and are located in the same geographic regions as our
offices.

                               MARKETING EFFORTS

    Our marketing program focuses on extending our brand, generating incremental
revenue and increasing our visibility. We supplement our marketing efforts with
our marketing and technology alliances. Marketing and technology alliances
provide mutually beneficial staff cross-training opportunities and business
development opportunities to enhance the services we provide to our clients and
to increase our technical awareness and internal capabilities.

                          ACQUISITIONS AND INTEGRATION

    We evaluate potential acquisitions based on strategic and geographic fit.
After determining that an acquisition candidate meets one of these two criteria,
we then focus on its cultural fit. We target companies that will help us become
the leading global provider of Internet, interactive television and mobile
business professional services. We believe that acquired companies benefit from
our management expertise, international infrastructure, long-term client focus,
track record, brand awareness and brand strength. We have acquired 12 companies
since our founding in 1995.

                                  COMPETITION

    We compete with other providers of interactive professional services. Our
market is intensely competitive, highly fragmented and subject to rapid
technological change. We expect competition to persist and intensify in the
future. Our current and potential competitors include:

    - interactive professional services firms, such as Proxicom, Sapient,
      Razorfish, Organic, Scient, MarchFirst and Viant;

    - traditional strategic consulting firms, such as Booz-Allen & Hamilton,
      Boston Consulting Group and McKinsey;

    - interactive advertising agencies, such as Modem Media, Poppe Tyson and
      OgilvyOne;

    - professional services groups of computer equipment companies, such as
      Hewlett-Packard and IBM;

    - traditional systems integrators, such as Accenture (formerly Andersen
      Consulting), Cambridge Technology Partners, EDS and Sapient; and

    - internal resources of current or potential clients.

    We believe the principal competitive factors in our market are:

    - breadth and integration of service offerings;

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    - cost and quality of service;

    - client relationships;

    - technical knowledge and creative skills;

    - reliability;

    - ability to attract and retain quality professionals;

    - brand recognition;

    - reputation; and

    - vertical industry knowledge.

    We believe that we compete favorably with respect to these factors, but
cannot assure that we will continue to do so in the future.

                  INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

    We regard our copyrights, service marks, trademarks, trade secrets and other
intellectual property as critical to our success. Unauthorized use of our
intellectual property by third parties may damage our brand and our reputation.
We rely on trademark and copyright law, trade secret protection and
confidentiality and/or license agreements with our employees, customers,
partners and others to protect our intellectual property rights. Despite our
precautions, it may be possible for third parties to obtain and use our
intellectual property without our authorization. Furthermore, the validity,
enforceability and scope of protection of intellectual property in
Internet-related industries is uncertain and still evolving. The laws of some
foreign countries do not protect intellectual property to the same extent as do
the laws of the United States.

    We pursue the registration of our trademarks in the United States and
internationally in France, Germany, the Netherlands, Singapore, the United
Kingdom and other countries in the European Community. We may not be able to
secure adequate protection of our trademarks in the United States and other
countries. We currently hold trademark registrations in the United States,
France, Mexico, Brazil, Germany, the United Kingdom and the Netherlands for the
AGENCY.COM trademark. Effective trademark protection may not be available in all
of the countries in which we conduct business.

    We have also filed applications to register AGENCY.COM trademarks in Korea,
Australia, New Zealand, Brazil, Singapore and the European Community. Singapore
and New Zealand have raised certain objections to our application and we have
submitted an appropriate response. As we begin operations in new countries, it
is our intention to either file trademark applications for the AGENCY.COM
trademark in these countries or rely on the protection afforded by our European
Community registration in those countries where registration provides
protection. To the extent that we file new applications, we cannot be assured
that any of these applications will be accepted.

    Policing unauthorized use of our marks is difficult and expensive. In
addition, it is possible that our competitors will adopt product or service
names similar to ours, thereby impeding our ability to build brand identity and
possibly leading to customer confusion.

    We have made it a priority to acquire patent rights for the valuable
technologies and services that the Company develops at its research laboratory
and other parts of the Company. Patent applications have been filed for
inventions in fields including m-business, multiple digital channels and
interactive systems. Additional applications are presently under development.
The patent rights that may arise from those applications could help improve the
Company's competitive and financial position by excluding competitors from
making, using, or selling the patented inventions and could also generate

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revenue for the Company in licensing fees and royalties. The Company intends to
continue to rigorously acquire patent rights for its key services and
technologies.

    We may be subject to legal proceedings and claims from time to time relating
to the intellectual property of others in the ordinary course of our business.
We may incur substantial expenses in defending against these third-party
infringement claims, regardless of their merit. Successful infringement claims
against us may result in substantial monetary liability or may materially
disrupt the conduct of our business.

                             OUR CORPORATE HISTORY

    We were incorporated in New York on February 10, 1995 and commenced
operating as an Internet, interactive television and mobile business
professional services firm. We reincorporated in Delaware on August 30, 1999. We
completed our initial public offering on December 8, 1999, selling a total of
6,785,000 shares of common stock, including 885,000 shares pursuant to the
exercise of the underwriters' over-allotment option.

                                   EMPLOYEES

    As of December 31, 2000, we had over 1,500 full-time employees. None of our
employees are represented by a labor union. We have experienced no work
stoppages and we believe our relationship with our employees is good.

                 BUSINESS SEGMENT AND GEOGRAPHICAL INFORMATION

    The Company manages its business in one business segment. Information with
respect to the Company's financial information by geographic area is set forth
in Note 10 of the Consolidated Financial Statements of the Company filed with
this report.

ITEM 1A. RISK FACTORS

    You should carefully consider the following risks in your evaluation of us.
The risks and uncertainties described below are not the only ones we face.
Additional risks and uncertainties may also adversely impact and impair our
business. If any of the following risks actually occur, our business, results of
operations or financial condition would likely suffer. In such case, the trading
price of our common stock could decline, and you may lose all or part of your
investment in our common stock.

          RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL

OUR REVENUES COULD BE AFFECTED BY THE LOSS OF A MAJOR CLIENT

    A substantial portion of our revenue is generated from a limited number of
major clients. In particular, our ten largest clients accounted for
approximately 41% of our revenues for the year ended December 31, 2000. If one
of our major clients discontinues or reduces the use of our services, our
business, results of operations and financial condition could materially suffer.
We cannot assure you that our clients will continue to use our services in the
future. In addition, because a substantial portion of our revenue is generated
from a limited number of clients, the non-payment or late payment of amounts due
from a major client could have a materially adverse effect on our business,
results of operations and financial condition.

IF CLIENTS PREMATURELY TERMINATE OR REDUCE THE SCOPE OF EXISTING CONTRACTS, OUR
  REVENUES MAY DECLINE

    Our services are often sold pursuant to short-term arrangements and most
clients can reduce or cancel their contracts for our services without penalty
and with little or no notice. These arrangements are in writing, are binding
contracts and typically range in term from three months to one year. If a

                                       11
<PAGE>
major client or a number of small clients were to terminate, significantly
reduce or modify their business relationships with us, then our business,
results of operations and financial condition could be materially adversely
affected. Consequently, you should not predict or anticipate our future revenue
based upon the number of clients we currently have or the number and size of our
existing projects.

OUR REVENUES ARE DIFFICULT TO PREDICT, WHICH COULD LEAD TO POOR OPERATING
  RESULTS

    We derive our revenues in part from fees for services generated on a
project-by-project basis. These projects vary in length and complexity, as well
as in the fee charged for our services. Revenues are recognized for time and
materials projects as services are provided. Revenues from fixed-fee contracts
are recognized as services are provided upon the achievement of specified
milestones. Revenue is recognized on partially completed milestones in
proportion to the costs incurred for that milestone and only to the extent that
an irrevocable right to the revenue exists. Costs incurred under fixed-fee
contracts are recognized as incurred which generally is in the same period that
revenue is recorded. Our methods of recognizing revenue also vary depending on
whether we enter into a retainer, time-and-materials or fixed-fee arrangement
with the client. As a result, there may be significant fluctuation in the amount
of revenue generated by a particular client in different periods. Aggregate
quarterly results may fluctuate as well. We may be unable to adjust our cost
structure quickly enough to offset unexpected revenue shortfalls due to the fact
that many of our costs are fixed or are associated with commitments which cannot
be immediately terminated, which could cause our operating results to suffer.

OUR PAST ACQUISITIONS MAKE EVALUATING OUR BUSINESS DIFFICULT

    Our historical results of operations do not fully give effect to the
operations of the companies we have acquired. Consequently, our historical
results of operations may not give you an accurate indication of how AGENCY.COM,
together with these combined entities, will perform in the future.

WE MAY NEED TO RAISE ADDITIONAL CAPITAL, WHICH MAY NOT BE AVAILABLE TO US AND
  MAY LIMIT OUR GROWTH

    Our future liquidity and capital requirements are difficult to predict as
they depend upon numerous factors, including the success of our existing and new
service offerings and competing technological and market developments. Although
we believe that we have sufficient funds for working capital, we may need to
raise additional funds in order to meet additional working capital requirements,
support additional capital expenditures or take advantage of acquisition
opportunities. Our ability to obtain additional financing will be subject to a
number of factors, including market conditions, our operating performance and
investor sentiment. These factors may make the timing, amount, terms and
conditions of additional financing unattractive for us. If we are unable to
raise additional funds when needed or the terms are not favorable, our growth
could be impeded.

IF WE FAIL TO ACCURATELY ESTIMATE COSTS OF FIXED-FEE PROJECTS, OUR OPERATING
  RESULTS MAY SUFFER

    We derive our revenues from services performed under one of three pricing
arrangements: retainer, time-and-materials and fixed-fee. The majority of our
revenues are derived from time-and-materials contracts. At December 31, 2000,
18% of our revenue was derived from retainer contracts, 77% of our revenue was
derived from time-and-materials contracts and 5% was derived from fixed-fee
contracts. We assume greater financial risks on a fixed-fee project than on a
time-and-materials project because we may miscalculate the resources or time we
need for these projects, which may cause the costs of completing these projects
to exceed the fixed-fee we receive and result in our performing contracts that
are not profitable, or which result in a lower gross margin. The extent to which
our operating results may be adversely affected depends on the extent to which
we miscalculate our expenses for completing the contract. We recognize revenues
from fixed-fee projects as services are provided upon the achievement of
specified milestones. Revenue is recognized on partially

                                       12
<PAGE>
completed milestones in proportion to the costs incurred for that milestone and
only to the extent that an irrevocable right to the revenue exists. Costs
incurred under fixed-fee contracts are recognized as incurred which generally is
in the same period that revenue is recorded. To the extent our estimates of the
costs associated with each fixed-fee project are inaccurate, the revenues and
operating profits, if any, that we report for periods during which we are
working on that project may not accurately reflect the final results of the
project. In this case, we may be required to record an expense in the period in
which additional anticipated costs are identified.

                    RISKS RELATED TO OUR STRATEGY AND MARKET

FAILURE TO PROPERLY MANAGE OUR OPERATIONS MAY ADVERSELY IMPACT OUR BUSINESS

    Our rapid growth has placed a significant strain on our managerial and
operational resources. From January 1, 1997 to December 31, 2000, our staff
increased from approximately 60 to over 1,500 employees. If we cannot
effectively manage our operations, we may not be able to continue to grow, or
may grow at a slower pace. In order to manage any future growth, we must
continue to improve our financial and management controls, reporting systems and
procedures, and expand and train our work force. We cannot be assured that our
controls, systems or procedures will be able to support our expanding operations
or that we will be able to manage both internal and acquisition-based growth
effectively.

OUR BUSINESS IS SENSITIVE TO NATIONAL AND REGIONAL ECONOMIC CONDITIONS. ECONOMIC
DOWNTURNS COULD HAVE AN ADVERSE IMPACT ON THE DEMAND FOR OUR SERVICES

    The market for Internet, interactive television and mobile business
professional services is sensitive to national and regional economic conditions.
Economic downturns could cause our clients to reduce or cease their investment
in Internet-related technologies and related consulting and development services
such as those we provide. For example, in February 2001, the Company announced
that the demand environment for the near term was challenging. Any decrease in
the demand for our services could adversely affect our operating results and
financial condition. Our operating results and financial condition may also be
adversely affected by difficulties we may encounter in collecting our accounts
receivable and maintaining our profit margins during an economic downturn.

OUR PAST AND FUTURE ACQUISITIONS, IF ANY, SUBJECT US TO SIGNIFICANT RISKS, ANY
OF WHICH COULD HARM OUR BUSINESS

    Acquisitions involve a number of risks and present financial, managerial and
operational challenges, including:

    - adverse effects on our reported operating results due to the amortization
      of goodwill associated with acquisitions;

    - diversion of management attention from running our existing business;

    - increased expenses, including compensation expenses resulting from
      newly-hired employees; and

    - potential disputes with the sellers of acquired businesses, technologies,
      services or products.

    We may not be successful in integrating the technology, operations and
personnel of any acquired business. Client satisfaction or performance problems
with an acquired business, technology, service or product could also have a
material adverse impact on our reputation as a whole. In addition, any acquired
business, technology, service or product could significantly underperform
relative to our expectations. For all these reasons, our past and future
acquisitions, if any, could have a material adverse effect on our business,
results of operations and financial condition.

                                       13
<PAGE>
WE SOMETIMES AGREE NOT TO PERFORM SERVICES FOR OUR CLIENTS' COMPETITORS, WHICH
LIMITS OUR BUSINESS OPPORTUNITIES

    We have agreed with some of our clients to limit to some extent our right to
enter into business relationships with competitors of that client for a specific
time period. These provisions typically prohibit us from performing a broad
range of our Internet, interactive television and mobile business professional
services, which we might otherwise be willing to perform for potential clients.
These provisions are generally limited to six months and are sometimes further
limited by office location or apply only to specific employees. These provisions
may limit our ability to enter into engagements with new clients for specified
periods of time. This may adversely affect our business opportunities and our
revenues.

WE FACE INTENSE COMPETITION, WHICH COULD HARM OUR BUSINESS

    Our market is new, intensely competitive, highly fragmented and subject to
rapid technological change. We expect competition to intensify and increase over
time because:

    - there are no substantial barriers to entering the interactive professional
      services market;

    - our industry is consolidating; and

    - many of our competitors are forming cooperative relationships.

    We compete against other interactive professional services firms, as well as
a number of different types of companies that are not exclusively in the
interactive professional services business. These competitors, which generally
offer some of the interactive professional services we offer, include:

    - traditional strategic consulting firms;

    - interactive advertising agencies;

    - professional services groups of computer equipment companies;

    - traditional systems integrators; and

    - internal groups of current or potential clients.

    Many of our competitors have longer operating histories, greater name
recognition, larger established client bases, longer client relationships and
significantly greater financial, technical, personnel and marketing resources
than we do. Such competitors may be able to undertake more extensive marketing
campaigns, adopt more aggressive pricing policies and make more attractive
offers to potential clients, employees and strategic partners. Further, our
competitors may perform interactive services that are equal or superior to our
services or that achieve greater market acceptance than our services. We have no
patented technology that would preclude or inhibit competitors from duplicating
our services. We must rely on the skills of our personnel and the quality of our
client service.

    Increased competition may result in price reductions, reduced gross margins
and loss of market share, any of which would have a material adverse effect on
our business, results of operations and financial condition. We cannot assure
you that we will be able to compete successfully against existing or future
competitors.

IF WE ARE UNABLE TO IDENTIFY, HIRE, TRAIN AND RETAIN HIGHLY QUALIFIED
PROFESSIONALS AND RETAIN CURRENT KEY PERSONNEL, OUR BUSINESS AND GROWTH WILL
SUFFER

    Our success depends on our ability to identify, hire, train and retain
highly qualified professionals. These individuals are in high demand and we may
not be able to attract and retain the number of highly qualified professionals
that we need. Historically, we have experienced significant employee turnover.
If we cannot retain, attract and hire the necessary professionals, our ability
to grow, complete

                                       14
<PAGE>
existing projects and bid for new projects would be adversely affected and our
business, results of operations and financial condition would suffer.

    In addition, our future success depends, in part, upon the continued service
and performance of Chan Suh, Chairman, Chief Executive Officer and President,
Kyle Shannon, Chief People Officer, Kevin Rowe, President-North America and
Michael Mathews, President-Europe. Particularly in light of our relatively early
stage of development, the fact that many of our key personnel have worked
together for only a short period of time and the competitive nature of our
industry, we cannot assure you that we will be able to retain the services of
our senior management and other key personnel. Losing the services of any of
these individuals at our current stage would impair our ability to effectively
deliver our services and manage our company. These problems would negatively
affect our business, results of operations and financial condition, as well as
our ability to grow.

OUR EFFORTS TO RAISE AWARENESS OF THE AGENCY.COM BRAND MAY NOT BE SUCCESSFUL,
WHICH MAY LIMIT OUR ABILITY TO EXPAND OUR CLIENT BASE AND ATTRACT ACQUISITION
CANDIDATES AND EMPLOYEES

    We believe that building the AGENCY.COM brand is critical for attracting and
expanding our targeted client base and employees. If we do not continue to build
the AGENCY.COM brand on a global basis, we may not be able to effect our
strategy. We also believe that reputation and name recognition will grow in
importance as the number of companies competing in the market for Internet,
interactive television and mobile business professional services increases.
Promotion and enhancement of our name will depend largely on our success in
continuing to provide high quality, reliable and cost-effective services. If
clients do not perceive our services as meeting their needs, or if we fail to
market our services effectively, we will be unsuccessful in maintaining and
strengthening our brand. If we fail to promote and maintain our brand, or incur
excessive expenses to do so, our business, results of operations and financial
condition will materially suffer.

OUR INTERNATIONAL EXPANSION STRATEGY COULD SUBJECT US TO SIGNIFICANT RISKS, MANY
OF WHICH COULD HARM OUR BUSINESS

    We expect to expand our international operations and international sales and
marketing efforts. We commenced operations in the United Kingdom in
October 1997, France in April 1999, the Netherlands in August 1999 and Denmark
in November 1999, and made minority investments in companies in Singapore in
December 1998 and Korea in October 2000. Our international offices offer
Internet, interactive television and mobile business professional services
similar to our domestic offices. We have had limited experience in marketing,
selling and distributing our services internationally, and we cannot assure you
that we will be able to maintain and expand our international operations or
successfully market our services internationally. Failure to do so may
negatively affect our business, results of operations and financial condition,
as well as our ability to grow.

OUR BUSINESS MAY SUFFER IF WE FAIL TO ADAPT APPROPRIATELY TO THE DIFFERENCES
ASSOCIATED WITH OPERATING INTERNATIONALLY

    Our international operations began in October 1997, and we are focusing our
international operations in Europe and Asia. We have no current plans to expand
to any specific location internationally. Operating internationally may require
us to modify the way we conduct our business and deliver our services in these
markets. If we do not appropriately anticipate changes and adapt our practices,
our business, results of operations and financial condition could materially
suffer. We face the following challenges internationally:

    - the burden and expense of complying with a wide variety of foreign laws
      and regulatory requirements;

                                       15
<PAGE>
    - potentially adverse tax consequences;

    - longer payment cycles and problems in collecting accounts receivable;

    - technology export and import restrictions or prohibitions;

    - tariffs and other trade barriers;

    - difficulties in staffing and managing foreign operations;

    - political and economic instability;

    - cultural and language differences;

    - fluctuations in currency exchange rates; and

    - seasonal reductions in business activity, especially during the summer
      months in Europe and certain other parts of the world.

IF WE DO NOT KEEP PACE WITH TECHNOLOGICAL CHANGES, OUR SERVICES MAY BECOME LESS
COMPETITIVE AND OUR BUSINESS COULD SUFFER

    Our market is characterized by rapidly changing technologies, frequent new
product and service introductions, and evolving industry standards. If we cannot
keep pace with these changes our services could become less competitive and our
business could suffer. To achieve our goals, we need to provide strategic
business and interactive services that keep pace with continuing changes in
industry standards, information technology and client preferences. We may be
unable, for technological or other reasons, to develop and introduce new
services or enhancements to existing services in a timely manner or in response
to changing market conditions or client requirements. This would materially and
adversely affect our business, results of operations and financial condition.

THE MARKET FOR OUR SERVICES AND OUR REVENUE GROWTH DEPENDS ON OUR CURRENT AND
POTENTIAL CLIENTS ACCEPTING AND EMPLOYING INTERACTIVE TECHNOLOGIES

    Since we expect to derive most of our revenues from providing Internet,
interactive television and mobile business professional services, our future
success is dependent on the increased use of interactive technologies. If
interactive technologies fail to develop into a viable marketplace, or develop
more slowly than expected, our business, results of operations and financial
condition could materially suffer. Most of our current or potential clients have
limited experience with interactive technologies and may determine that it is
not an effective method for expanding their businesses. We cannot assure you
that the market for interactive technologies will continue to grow or become
sustainable.

    Interactive technologies may not develop into a viable commercial
marketplace because of many factors, including:

    - the inadequate development of the necessary infrastructure;

    - a lack of development of complementary products (such as high speed modems
      and high speed communication lines); and

    - delays in the development or adoption of new standards and protocols
      required to handle increased levels of activity.

    The Internet has experienced, and is expected to continue to experience,
significant growth in the number of users and volume of traffic. We cannot
assure you that the Internet infrastructure will be able to support the demands
placed on it by this continued growth. In addition to the Internet's uncertain
ability to expand to accommodate increasing traffic, critical issues concerning
the use of the Internet (including security, reliability, cost, ease of
deployment and administration and quality of

                                       16
<PAGE>
service) remain unresolved. For example, a number of states have recently
permitted telephone companies to charge increased rates for consumers connecting
to the Internet. Concerns regarding these issues may affect the growth of the
use of interactive technologies to solve business problems.

                       RISKS RELATED TO LEGAL UNCERTAINTY

GOVERNMENTAL REGULATIONS REGARDING INTERACTIVE SERVICES MAY BE ENACTED WHICH
COULD IMPEDE OUR BUSINESS

    The legal and regulatory environment that pertains to e-commerce and
interactive services may change. New laws and regulations, or new
interpretations of existing laws and regulations, could impact us directly, by
regulating our operations or imposing additional taxes on the services we
provide, which could adversely impact our results and operations. These
regulations could restrict our ability to provide our services or increase our
costs of doing business.

    In addition, new laws could impact us indirectly by preventing our clients
from delivering products and services over the Internet or by slowing the growth
of the Internet. In particular, new laws relating to sales and other taxes, user
privacy, pricing controls, consumer protection and international commerce may
dampen the growth of the Internet as a communications and commercial medium. For
example, a number of proposals have been made at the federal, state and local
levels and by foreign governments that could impose taxes on the online sales of
goods and services and other Internet activities. In addition, unfavorable
judicial interpretation of existing laws, here and abroad, and the adoption of
new laws, here and abroad, regarding liability for libel and defamation and
copyright, trademark and patent infringement may extend liability to Web site
owners. If these new laws decrease the acceptance of e-commerce and other
aspects of the Internet, our clients may be harmed and, as a consequence, our
revenue growth and growth in demand for our services would be limited and our
business, results of operations and financial condition would be adversely
affected.

WE MAY BECOME SUBJECT TO CLAIMS REGARDING FOREIGN LAWS AND REGULATIONS, WHICH
COULD SUBJECT US TO INCREASED EXPENSES

    Because we have employees, property and business operations in the United
States, Denmark, France, the Netherlands and the United Kingdom, we are subject
to the laws and the court systems of multiple jurisdictions. We may become
subject to claims in foreign jurisdictions for violations of their laws. In
addition, these laws may change or new laws may be enacted in the future.
International litigation is often expensive, time-consuming and distracting, and
could have a material adverse effect on our business, financial condition and
results of operations.

UNAUTHORIZED USE OF OUR INTELLECTUAL PROPERTY BY THIRD PARTIES MAY DAMAGE OUR
BRAND

    Unauthorized use of our intellectual property by third parties may damage
our brand and our reputation. We currently have three patent applications
pending in the United States and in the United Kingdom, but do not have any
registered patents and existing trade secret, trademark and copyright laws
afford us only limited protection. It may be possible for third parties to
obtain and use our intellectual property without our authorization. Furthermore,
the validity, enforceability and scope of protection of intellectual property in
Internet-related industries are uncertain and still evolving. The laws of some
foreign jurisdictions may not protect our intellectual property rights to the
same extent as do the laws of the United States.

DEFENDING AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS COULD BE EXPENSIVE
AND DISRUPTIVE TO OUR BUSINESS

    We cannot be certain that our services, the finished products that we
deliver or materials provided to us by our clients for use in our finished
products do not or will not infringe valid patents, copyrights or other
intellectual property rights held by third parties. We may be subject to legal
proceedings and

                                       17
<PAGE>
claims from time to time relating to the intellectual property of others in the
ordinary course of our business. Intellectual property litigation is expensive
and time consuming and successful infringement claims against us may result in
substantial monetary liability or may materially disrupt the conduct of our
business.

IF WE FAIL TO DELIVER QUALITY SERVICES OR FULFILL CLIENT NEEDS, OR IF OUR
SERVICES HARM OUR CLIENTS' BUSINESSES, WE MAY FACE ADDITIONAL EXPENSES, LOSSES
OR NEGATIVE PUBLICITY

    Many of our engagements involve projects that are critical to the operations
of our clients' businesses. If we cannot complete engagements to our clients'
expectations, we could materially harm our clients' operations. This could
damage our reputation, subject us to increased risk of litigation or force us to
redesign the project. Any of these events could have a material adverse effect
on our business, results of operations and financial condition. While our
agreements with clients often limit our ability for damages arising from our
rendering of services, we cannot assure you that these provisions will be
enforceable in all instances or would otherwise protect us from liability.
Although we carry general liability insurance coverage, our insurance may not
cover all potential claims to which we are exposed or may not be adequate to
indemnify us for all liability that may be imposed. The successful assertion of
one or more significant claims against us could have a material adverse effect
on our business, results of operations and financial condition.

WE MAY BE SUBJECT TO CLAIMS FOR PAST ACTS OF THE COMPANIES THAT WE ACQUIRE,
WHICH MAY SUBJECT US TO INCREASED EXPENSES

    We could experience financial or other setbacks if any of the businesses
that we acquire had problems in the past of which we are not aware. We are not
aware of any material legal liabilities of the companies we have acquired to
date. However, to the extent any client or other third party asserts any legal
claim against any of the companies we have acquired, our business, results of
operations and financial condition could be materially adversely affected.

                          RISKS RELATED TO OUR SHARES

AS AN INTERACTIVE PROFESSIONAL SERVICES COMPANY, OUR STOCK PRICE IS LIKELY TO BE
HIGHLY VOLATILE AND COULD DROP UNEXPECTEDLY

    The price at which our common stock trades is highly volatile and fluctuates
substantially. For example, during 2000, the price of our common stock dropped
significantly. As a result, investors in our common stock may experience a
decrease in the value of their common stock regardless of our operating
performance or prospects. In addition, the stock market has, from time to time,
experienced significant price and volume fluctuations that have affected the
market prices for the securities of technology companies, particularly
interactive professional services companies. In the past, following periods of
volatility in the market price of a particular company's securities, securities
class action litigation was often brought against that company. Many
technology-related companies have been subject to this type of litigation. We
may also become involved in this type of litigation. Litigation is often
expensive and diverts management's attention and resources, which could have a
material adverse effect upon our business, financial condition and results of
operations.

OUR DIRECTORS, EXECUTIVE OFFICERS AND AFFILIATES OWN ENOUGH OF OUR SHARES TO
CONTROL AGENCY.COM, WHICH WILL LIMIT YOUR ABILITY TO INFLUENCE CORPORATE MATTERS

    Our directors, executive officers and affiliates currently beneficially own
approximately 71% of our common stock. Accordingly, these stockholders could
control the outcome of any corporate transaction or other matter submitted to
the stockholders for approval, including mergers, consolidations and the sale of
all or substantially all of our assets, and also could prevent or cause a change
in control. Third

                                       18
<PAGE>
parties may be discouraged from making a tender offer or bid to acquire us
because of this concentration of ownership. The interests of these stockholders
may differ from the interests of the other stockholders. Omnicom Group, Inc.
("Omnicom"), together with its direct and indirect subsidiaries currently
beneficially own approximately 38% of our common stock, allowing them to
significantly influence the outcome of any matter submitted to a vote of
AGENCY.COM stockholders.

OUR STOCKHOLDERS COULD BE ADVERSELY AFFECTED AS A RESULT OF OMNICOM'S AND ITS
TWO DESIGNATED DIRECTORS' POTENTIAL CONFLICTS OF INTERESTS

    Omnicom has significant ownership positions in some of our direct
competitors. These ownership positions may create conflicts of interest for
Omnicom and its director nominees as a result of their access to information and
business opportunities possibly useful to us and to these competitors.

ONE OF OUR DIRECTORS IS ALSO A DIRECTOR OF ONE OF OUR DIRECT COMPETITORS

    Gerald Bruce Redditt was one of Communicade Inc.'s ("Communicade") (a
wholly-owned subsidiary of Omnicom) nominees to our Board of Directors and is
currently serving on our board. Mr. Redditt is also a director of
Organic, Inc., one of our direct competitors. This directorship may create
actual and perceived conflicts of interest for Mr. Redditt as a result of this
access to information and business opportunities possibly useful to this
competitor and us.

OMNICOM HAS PROVIDED US WITH FINANCING AND IT HAS NO OBLIGATION TO RENEW OUR
CREDIT FACILITY BEYOND ITS TERMINATION DATE

    We have received significant benefits from our relationship with Omnicom,
our largest shareholder. In 1999, we invested substantially all of the net
proceeds (after repayments of our outstanding debt due to Omnicom) from our
initial public offering with Omnicom Finance Inc. ("Omnicom Finance"). To date,
our working capital and many of our acquisitions have been financed on favorable
terms by lines of credit advanced by Omnicom. We currently have no outstanding
indebtedness under our credit facility provided by Omnicom. This credit facility
provides for a $54.0 million revolving credit line and a real property lease
credit support facility providing letter of credit and/or guarantees up to
$6.0 million in the aggregate. The credit facility bears interest at Omnicom's
commercial paper rate, which was 7.6% on December 31, 2000, plus 1.25%. The
credit facility places restrictions on the conduct of our business that
stockholders may not consider favorable, including our ability to pay dividends
and incur additional debt. Omnicom is not obligated to extend this credit
facility beyond September 30, 2001. We cannot assure you that upon termination
of this facility we will be able to obtain any additional financing. As a
result, our financial condition might suffer.

SHARES ELIGIBLE FOR PUBLIC SALE COULD ADVERSELY AFFECT OUR STOCK PRICE

    Based on shares outstanding on December 31, 2000, from time to time, a total
of approximately 31.5 million additional shares of common stock may be sold in
the public market by existing stockholders. The market price of our common stock
could decline as a result of sales by these existing stockholders of their
shares of common stock in the market, or the perception that these sales could
occur. These sales also might make it difficult for us to sell equity securities
in the future at a time and at a price that we deem appropriate.

OUR CHARTER DOCUMENTS AND DELAWARE LAW MAY INHIBIT A TAKEOVER THAT STOCKHOLDERS
MAY CONSIDER FAVORABLE

    Provisions in our charter and bylaws, including those that provide for a
classified board of directors, authorized but unissued shares of common and
preferred stock and notice requirements for stockholder meetings, and Delaware
law, regarding the ability to conduct specific types of mergers

                                       19
<PAGE>
within specified time periods, may have the effect of delaying or preventing a
change of control or changes in our management that stockholders may consider
favorable or beneficial or that would provide stockholders with a premium to the
market price of their common stock. A classified board of directors may
discourage acquisitions in general and a tender offer not endorsed by our board
in particular since only one-third of our directors are re-elected annually,
thereby requiring two annual meetings before a majority of the directors could
be replaced. The authorization of undesignated preferred stock gives our board
the ability to issue preferred stock with voting or other rights or preferences
that could impede the success of any attempt to change control of the company.
If a change of control or change in management is delayed or prevented, this
premium may not be realized or the market price of our common stock could
decline.

ITEM 2. PROPERTIES

    Our principal executive offices and New York operating office are currently
located in a leased facility in New York, New York, consisting of an aggregate
of approximately 158,000 square feet. The lease for this office space expires on
April 15, 2014. We also lease space for our operations in California, Georgia,
Illinois, Massachusetts, New Jersey, Oregon and Texas, as well as in Denmark,
France, the Netherlands and the United Kingdom. We believe that our existing
facilities are adequate for our current needs and that additional space will be
available as needed.

ITEM 3. LEGAL PROCEEDINGS

    We are not a party to any material legal proceedings. However, the Company,
from time to time, becomes involved in various routine legal proceedings in the
ordinary course of its business. The Company believes that the outcome of all
pending legal proceedings and unasserted claims in the aggregate will not have a
material adverse effect on its consolidated results of operations, consolidated
financial position or liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    Not Applicable

                                       20
<PAGE>
                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

PRICE RANGE OF COMMON STOCK

    AGENCY.COM's common stock has been quoted on The NASDAQ National Market
under the symbol ACOM since AGENCY.COM's initial public offering on December 8,
1999. The following table presents, for the periods indicated, the high and low
sales prices per share of our common stock as reported on The NASDAQ National
Market:

<TABLE>
<CAPTION>
                            1999                                HIGH       LOW
                            ----                              --------   --------
<S>                                                           <C>        <C>
Fourth Quarter (beginning December 8, 1999).................   $98.00     $51.00

<CAPTION>
                            2000                                HIGH       LOW
                            ----                              --------   --------
First Quarter.                                                $  56.00   $  20.00
<S>                                                           <C>        <C>
Second Quarter..............................................   $27.13     $12.00
Third Quarter...............................................   $27.56     $14.94
Fourth Quarter..............................................   $15.25     $ 2.50
</TABLE>

    On March 26, 2001, the last reported sale price of our common stock on The
NASDAQ National Market was $1.3438. As of March 26, 2001, there were 631 holders
of record of our common stock.

RECENT SALES OF UNREGISTERED SECURITIES

    During the year ended December 31, 2000, the Company issued and sold the
following securities:

    In October 1999, the Company invested $500,000 in Pictoris Interactive SA
("Pictoris") in exchange for 5% of the outstanding equity in Pictoris from its
existing shareholders. In January 2000, we exercised our option to purchase the
remaining 95% of Pictoris. The total consideration for the acquisition was
approximately $12.4 million consisting of $8.7 million in cash and 78,954 shares
of our common stock valued at approximately $46.00 per share. Pictoris operates
as a separate subsidiary.

    In September 2000, the Company entered into an Agreement with Speedmount
Services Limited ("Speedmount") pursuant to which the Company acquired all of
the outstanding shares of Speedmount, a private company incorporated in England
and Wales, in exchange for 48,832 shares of our common stock valued at
approximately $14.00 per share.

    The foregoing transactions did not involve a public offering, and the
Company believes that such transactions were exempt from the registration
requirements of the Securities Act by virtue of Section 4(2) thereof or
Regulation D promulgated thereunder. These sales were made without general
solicitation or advertising. Each purchaser was an accredited investor or a
sophisticated investor with access to all relevant information necessary. The
recipients in such transactions represented their intention to acquire the
securities for investment only and not with a view to or for sale in connection
with any distribution thereof, and appropriate legends were affixed to the share
certificates and instruments issued in such transactions.

DIVIDEND POLICY

    We have not declared or paid any cash dividends on our common stock other
than a distribution to our stockholders prior to the September 1996 termination
of our status as an S-corporation. The Company intends to retain all earnings,
if any, to finance the growth and development of its business and does not
anticipate paying cash dividends on its common stock in the foreseeable future.
In

                                       21
<PAGE>
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
         (CONTINUED)
addition, the Company's credit facility with Omnicom prohibits the company and
its subsidiaries from paying dividends. Any future determination as to payment
of dividends on the common stock will depend upon the Company's future earnings,
results of operations, capital requirements and financial condition and any
other factors the Board of Directors of the Company may consider.

ITEM 6. SELECTED FINANCIAL DATA

SELECTED CONSOLIDATED FINANCIAL DATA

    The selected Consolidated Balance Sheet data as of December 31, 1996, 1997
and 1998 and the selected Consolidated Statement of Operations data for the
years ended December 31, 1996 and 1997 are derived from our Audited Consolidated
Financial Statements not included in this report. The Selected Consolidated
Balance Sheet data as of December 31, 1999 and 2000 and the Selected
Consolidated Statement of Operations data for the years ended December 31, 1998,
1999 and 2000 have been derived from our Audited Consolidated Financial
Statements included elsewhere in this report.

                                       22
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA (CONTINUED)
    You should read the following selected financial data in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the AGENCY.COM audited Consolidated Financial Statements and
accompanying notes included in this report.

<TABLE>
<CAPTION>
                                                       (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                ----------------------------------------------------
                                                  1996       1997       1998       1999       2000
                                                --------   --------   --------   --------   --------
                                                               YEAR ENDED DECEMBER 31
<S>                                             <C>        <C>        <C>        <C>        <C>
Consolidated Statement of Operations Data:
Revenues......................................   $6,095    $12,975    $26,452    $ 87,786   $202,090
Direct salaries and costs.....................    2,217      6,200     15,930      45,458     98,953
                                                 ------    -------    -------    --------   --------
Gross profit..................................    3,878      6,775     10,522      42,328    103,137
Operating Expenses:
General and administrative (1)................      955      3,815     10,944      33,830     84,241
Sales and marketing...........................       --        528        596       4,671     12,873
Depreciation and amortization.................       61        304      1,141       4,627      7,116
Amortization of intangibles...................       --         72        893       7,783     17,243
Non-cash compensation (2).....................       --         --         --       1,239      2,366
                                                 ------    -------    -------    --------   --------
Total operating expenses......................    1,016      4,719     13,574      52,150    123,839
                                                 ------    -------    -------    --------   --------
Income (loss) from operations.................    2,862      2,056     (3,052)     (9,822)   (20,702)
Interest income (expense), net................       28         10       (360)     (2,862)     3,247
Minority Interest income (expense)............       --        167       (282)         51         --
                                                 ------    -------    -------    --------   --------
Income (loss) before provision for (benefit
  from) income taxes..........................    2,890      2,233     (3,694)    (12,633)   (17,455)
Provision for (benefit from) income taxes.....    1,388      1,051     (1,213)        246     (2,769)
                                                 ------    -------    -------    --------   --------
Net income (loss).............................   $1,502    $ 1,182    $(2,481)   $(12,879)  $(14,686)
                                                 ======    =======    =======    ========   ========
Basic net income (loss) per common share
  (3).........................................   $ 0.32    $  0.07    $ (0.15)   $  (0.53)  $  (0.41)
                                                 ======    =======    =======    ========   ========
Diluted net income (loss) per common share
  (3).........................................   $ 0.31    $  0.07    $ (0.15)   $  (0.53)  $  (0.41)
                                                 ======    =======    =======    ========   ========
Weighted average shares outstanding used in
  basic net income (loss) per common share
  calculation.................................    4,750     16,200     16,854      24,495     35,452
                                                 ======    =======    =======    ========   ========
Weighted average shares outstanding used in
  diluted net income (loss) per common share
  calculation.................................    4,797     16,297     16,854      24,495     35,452
                                                 ======    =======    =======    ========   ========
</TABLE>

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

(1) Restructuring and other costs of $12.9 million are included in 2000 general
    and administrative expenses. In December 2000, the Company reorganized its
    operations through a restructuring plan in order to more properly align its
    capacity with the changing demand environment for Internet services. The
    restructuring plan included the closure of the Vail, Colorado office and
    other selected company-wide staff reductions.

(2) Non-cash compensation expenses for the year ended December 31, 1999 and 2000
    are approximately $1.2 million and $2.4 million, respectively, which is the
    result of us granting approximately 1,783,000 stock options in 1999 to
    employees at exercise prices ranging from $4.065 to $19.55 per share, which
    at the time of grant, was below the fair market value of our common stock.
    As a result of these grants, we have estimated cumulative compensation
    expense of $6.5 million, which will be charged over the vesting period. This
    will result in future non-cash

                                       23
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA (CONTINUED)
    compensation expense of $1.6 million for the year ended December 31, 2001,
    $1.2 million for the year ended December 31, 2002 and $27,000 for the year
    ended December 31, 2003. We did not have any stock option grants with
    exercise prices that were below the fair market value of our common stock
    prior to 1999.

(3) Basic and diluted net income or loss per share was calculated in accordance
    with SFAS No. 128, "Earnings Per Share" ("SFAS No. 128"). Under SFAS
    No. 128, the number of shares used to calculate diluted net income or loss
    per share is calculated in accordance with the treasury stock method. The
    treasury stock method is a method for calculating outstanding shares that
    adds to the actual number of shares outstanding additional shares issuable
    upon the exercise of stock options and warrants based on a calculation that
    assumes that any proceeds that could be obtained upon the exercise of
    outstanding stock options and warrants during the applicable period would be
    used to purchase common stock at the average market price during the period.
    Stock options and warrants are not included if the impact of such inclusion
    is antidilutive.

    The following balance sheet data are presented:

<TABLE>
<CAPTION>
                                                   AS OF DECEMBER 31,
                                  ----------------------------------------------------
                                    1996       1997       1998       1999       2000
                                  --------   --------   --------   --------   --------
                                                     (IN THOUSANDS)
<S>                               <C>        <C>        <C>        <C>        <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents.......   $  513     $  388     $  769    $ 85,035   $ 70,659
Short term investment...........       --         --         --          --      4,883
Working capital.................    1,633      4,353      1,326      87,646     71,718
Total Assets....................    4,100     11,291     24,860     226,891    254,800
Notes payable, excluding current
  portion.......................       --      2,425     11,989          --         --
Capital leases, excluding
  current installments..........       --        116        848       1,644      2,750
Total stockholders' equity......   $2,260     $3,449     $2,060    $190,693   $191,514
</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

    THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH OUR
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE IN THIS
REPORT.

OVERVIEW

    The Company is an international Internet, interactive television and mobile
business professional services firm. Our revenues have grown from $6 million in
1996 to $202 million in 2000. We achieved this growth through long-term
relationships with multiple clients. For the year ended December 31, 2000, no
client accounted for more than 10% of our revenues. For the year ended
December 31, 1999, one client accounted for 11.3% of our revenues. We have
expanded our geographic reach to 12 cities in the United States and Europe and
have made minority investments in companies based in Singapore, Korea and Miami,
Florida. Please see Note 10 to the AGENCY.COM Consolidated Financial Statements
for a summary of our operations by geographic area.

    We derive our revenues from services performed under one of three pricing
arrangements: retainer, time-and-materials and fixed-fee. The services performed
under any of these arrangements are substantially identical.

                                       24
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
    We bill and recognize revenues from retainer agreements on a monthly basis
while the agreement is in effect. We believe that retainer arrangements are
indicative of our strong, long-term relationships with clients, which yield
significant benefits both to our clients and to us. We believe that we will
achieve greater predictability of revenues and higher revenue growth with
clients who engage us in retainer-based relationships. Retainer agreements are
generally one year in length and include a renewal clause. Typically, retainer
relationships with clients result in additional fixed-fee and time-and-materials
projects since retainer agreements may not cover the full cost of specific
projects. Retainer fees represented approximately 18% of our revenues for the
year ended December 31, 2000. Revenue from clients with whom we have retainer
relationships represented approximately 42% of our revenues during this period.
Consistent with our focus on long-term relationships, our goal is to increase
our number of retainer-based arrangements. To the extent we acquire companies in
the future that differ in their allocation of contract types, the percentage of
revenue we derive from each type of contract may differ from current
percentages.

    We bill and recognize revenues from time-and-materials projects as services
are provided on the basis of costs incurred in the period. We estimate these
costs according to an internally developed process. This process takes into
account the type and overall complexity of the project, the anticipated number
of personnel of various skill sets needed and their associated billing rates,
and the estimated duration of and risks associated with the project. Management
personnel familiar with the production process evaluate and price all project
proposals.

    We recognize revenues from fixed-fee projects as services are provided upon
the achievement of specified milestones. Revenue is recognized on partially
completed milestones in proportion to the costs incurred for that milestone and
only to the extent that an irrevocable right to the revenue exists. Fees are
billed to the client over the course of the project. Revenue is only recognized
when persuasive evidence of an arrangement exists, services have been rendered,
the fees are fixed or determinable and collectibility is reasonably assured. We
estimate the price for fixed-fee projects using the same methodology as
time-and-materials projects. A member of our senior management team must first
approve all fixed-fee proposals.

    Provisions for estimated losses on all three types of contracts are made
during the period in which such losses become probable and can be reasonably
estimated. To date, such losses have not been significant. We report revenue net
of reimbursable expenses.

    Our net income decreased from $1.5 million for the year ended December 31,
1996 to a net loss of $14.7 million for the year ended December 31, 2000. This
significant increase in net loss is primarily attributable to the restructuring
charge and other costs we incurred in the fourth quarter of 2000 of
$12.9 million, increased amortization of goodwill, customer base and workforce
resulting from our acquisitions, which are amortized over a period of seven,
five and three years, respectively, increased general and administrative
expenses and sales and marketing expenses related to growth in our
infrastructure, and increased depreciation and amortization expense from capital
expenditures incurred as a result of our continued growth. The increased
expenses were partially offset by gross profit on increased revenue, and
interest income on cash proceeds from our initial public offering in
December 1999.

    For the year ended December 31, 2000, we incurred a net loss of
$14.7 million. As a result of this and prior losses, our accumulated deficit was
$28.4 million at December 31, 2000. The year 2000 loss resulted primarily from
the restructuring charges and other one time costs we incurred in the fourth
quarter of 2000 of $12.9 million, amortization of goodwill, customer base and
workforce of $17.2 million associated with our acquisitions, which are amortized
over a period of seven, five and

                                       25
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
three years, respectively, depreciation and amortization expense of
$7.1 million due to increased capital expenditures, non-cash compensation
expense of $2.4 million, increased costs due to an increase in the number of
billable and non-billable employees from an average for the year of
approximately 680 at December 31, 1999 to approximately an average for the year
of 1,420 at December 31, 2000, as a result of our decision to continue to build
our infrastructure. The increased expenses were partially offset by our
increased revenues.

    Included in the net loss for the year ended December 31, 2000 is non-cash
compensation expense of $2.4 million, which is the result of us granting
approximately 1,783,000 stock options in 1999 to employees at exercise prices
ranging from $4.065 to $19.55 per share, which at the time of grant, were below
the fair market value of our common stock. As a result of these grants, we have
estimated cumulative compensation expense of $6.5 million, which will be charged
over the vesting period of such options. This will result in future non-cash
compensation expense of $1.6 million for the year ended December 31, 2001,
$1.2 million for the year ended December 31, 2002 and $27,000 for the year ended
December 31, 2003. We did not have any stock option grants with exercise prices
that were below the fair market value of our common stock prior to 1999.

    Our revenues and earnings are affected by a number of factors, including:

    - the amount of business developed from existing relationships;

    - our ability to meet the changing needs of the marketplace;

    - employee retention;

    - billing rates;

    - our ability to deliver complex projects on time; and

    - efficient utilization of our employees.

    Many of our business initiatives, including our past acquisition strategy,
are aimed at enhancing these factors. Further, we believe that our focus on
retainer-based arrangements will continue to improve the predictability of our
quarter-to-quarter results.

    Our expenses include direct salaries and costs, sales and marketing, general
and administrative, depreciation and amortization of tangible assets, and
amortization of intangible assets. Direct salaries and costs include salaries,
benefits and incentive compensation of billable employees. Billable employees
are full time employees. Billable employees and subcontractors whose time spent
working on client projects is charged to that client at agreed upon rates are
our primary source of revenue. Direct salaries and costs also include other
direct costs associated with revenue generation. Sales and marketing expenses
include promotion and new business generation expenses and the salary and
benefit costs of personnel in these functions. General and administrative
expenses include the salaries and benefits costs of management and other
non-billable employees, rent, accounting, legal and human resources costs and
with respect to 2000, a restructuring charge. Depreciation and amortization
expenses primarily include depreciation of technology equipment, furniture and
fixtures, and leasehold improvements. Amortization of intangibles expenses
includes charges for the excess of purchase price over net tangible book value
of acquired companies and the goodwill is amortized over a period of seven
years. Personnel compensation and facilities costs represent a high percentage
of our operating expenses and are relatively fixed in advance of each quarter.

    We have achieved growth in revenues by pursuing a strategy of increasing
revenues from existing lines of businesses and through augmenting existing lines
of business with acquisitions.

                                       26
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
    Revenue from our international operations was $19.2 million for the year
ended December 31, 1999, compared to $47.7 million for the year ended
December 31, 2000. This represents an increase of 148% for the year. Net loss
from international operations was $0.5 million for the year ended December 31,
1999 compared to $5.9 million for the year ended December 31, 2000. This
represents an increase of 1,080% for the year. The increase in our international
revenue of $28.5 million for the year ended December 31, 2000, compared to the
year ended December 31, 1999 was due to the following: $3.7 million was
contributed by our Paris office primarily due to our acquisition of Pictoris in
January 2000, $5.0 million was contributed by our Amsterdam office which was
part of our operations for a full year in 2000 versus five months in 1999 and
$10.7 million was contributed by the Copenhagen office which was in our
operations for a full year in 2000 versus two months in 1999. The remaining
$9.1 million of this increase is attributable to an increase in revenue from new
and existing clients of our London office.

    Restructuring and other one time costs of $12.9 million are included in 2000
general and administrative expenses. In December 2000, the Company reorganized
its operations through a restructuring plan in order to more properly align its
capacity with the changing demand environment for interactive services. The
restructuring plan included the closure of the Vail, Colorado office and other
selected company-wide staff reductions. Overall, the Company reduced its
workforce by approximately 190 employees, 130 of which were billable
consultants. In connection with the reorganization, the Company took a charge in
the fourth quarter of 2000 of approximately $12.9 million, all of which is
included in general and administrative expenses. Unpaid amounts of
$11.1 million are included in accrued restructuring charges as of December 31,
2000.

    The restructuring charges consists of the following:

<TABLE>
<CAPTION>
                                                              (IN MILLIONS)
                                                              -------------
<S>                                                           <C>
Severance...................................................      $ 3.8
Office closure..............................................        3.6
Abandonment of fixed assets.................................        3.6
Other restructuring costs...................................        0.5
Other costs.................................................        1.4
                                                                  -----
                                                                  $12.9
                                                                  =====
</TABLE>

    Included in other costs is a one time write-off of leasehold improvements
associated with the Company's decision to terminate one of its leases.

ACQUISITIONS

    A key component of our overall growth strategy has been the acquisition of
or investment in, complementary businesses, technologies, services and products.
From inception through December 31, 2000, we acquired 12 companies and may
acquire similar businesses in the future. We acquired Spiral Media, Inc.
("Spiral Media"), Online Magic Limited ("Online Magic"), Ketchum
Advertising Inc. ("Ketchum"), Web Partners (doing business as "The Primary
Group"), Interactive Solutions Incorporated ("ISI"), Quadris Consulting, Inc.
("Quadris"), (Quadris became a wholly-owned subsidiary of ISI immediately prior
to our acquisition of ISI), Eagle River Interactive, Inc. ("ERI"), Digital
Vision Communications, Inc. ("Digital Vision"), Twinspark Interactive People
B.V. ("Twinspark"), Pictoris, Interactive Traffic Inc. ("I-traffic"), Visionik
A/S ("Visionik"), and Speedmount. We have also made minority investments in The
EdgeMatrix PTE. LTD. ("EdgeMatrix") (formerly The

                                       27
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
Edge Consultants PTE. LTD.), based in Singapore, AGENCY.COM Korea, based in
Korea and QUAXAR.COM ("QUAXAR"), based in Miami, Florida, all of which are
technology and services companies. Our growth for 2000 was not materially
impacted by foreign currency fluctuations.

    All of the companies and businesses in which we have acquired a 100%
ownership interest have been incorporated into our operations.

    In July 1997, we acquired 51% of Spiral Media, and in July 1998, we acquired
the remaining 49%. The total consideration for the acquisition was approximately
$6.2 million, consisting of a cash payment of $5.5 million, relinquishment of
debt due from Spiral Media stockholders of $128,000 and the issuance of 480,626
shares of our common stock valued at $1.12 per share. As a result of this
acquisition, the Company has recorded goodwill of approximately $6.1 million,
which is the cost in excess of net assets acquired and is being amortized over a
period of seven years. Spiral Media created new media services for businesses
and consumers by offering Internet-based and digital media communications
strategies and development for clients. Spiral Media broadened our ability to
offer complex technology services, such as implementing electronic commerce
systems. Spiral Media has been incorporated into the operations of our New York
office.

    In October 1997, we acquired 42.5% of Online Magic and acquired the
remaining equity interest in two steps in May 1998 and July 1998. As of
December 31, 1998, the total consideration for the acquisition was
$2.2 million. The consideration was comprised of a cash payment of $1.6 million
and the issuance of 498,434 shares of our common stock valued at $1.12 per
share. As a result of this acquisition, the Company has recorded goodwill of
approximately $1.9 million, which is the cost in excess of net assets acquired
and is being amortized over a period of seven years. Furthermore, the purchase
agreements call for certain earn-out payments to former shareholders of Online
Magic based upon the achievement of targeted operating performance of Online
Magic through December 1999. In September 1999, the Company released 123,376
shares from escrow and issued them to two of the former shareholders of Online
Magic as part of the earn-out payment. These shares were valued at $11.00, which
was the current fair market value of the Company's stock. The total value of the
shares of approximately $1.4 million was recorded as additional purchase price
and is reflected as additional goodwill in the accompanying financial
statements. In March 2000, the Company released the remaining 123,376 shares
from escrow to the same former shareholders of Online Magic as the remaining
earn-out payment. These shares were valued at $29.50, which was the current fair
market value of the Company's stock at the date of the release. The total value
of these shares of approximately $3.6 million was recorded as additional
purchase price and was reflected as goodwill. Online Magic designed, built and
managed web sites for their clients. Online Magic contributed to our growth by
increasing our U.K. staff by approximately 75 people and by significantly
increasing our client base in the U.K. We incorporated the U.S. operations of
Online Magic into the operations of our New York office. The U.K. office of
Online Magic operates as a separate subsidiary.

    In April 1998, we acquired assets from Ketchum. The consideration consisted
of a cash payment of approximately $0.6 million. As a result of this
acquisition, the Company has recorded goodwill of approximately $0.6 million,
which is the cost in excess of net assets acquired and is being amortized over a
period of seven years. Ketchum was an interactive marketing and branding agency,
which developed interactive communications for clients by utilizing strategic
consulting, design and production. We incorporated the operations of Ketchum
into our operations and it currently operates as our San Francisco office.
Ketchum contributed to our growth by expanding our presence in San Francisco.

                                       28
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
    In August 1998, we acquired assets from The Primary Group. In consideration
of the assets acquired, we paid approximately $50,000 in cash. The Primary Group
focused on online marketing needs for luxury and style brands. The Primary Group
contributed to our growth by increasing our client base within the fashion and
retail markets. The Primary Group has been incorporated into the operations of
our New York office.

    In April 1999, we acquired ISI through a merger in exchange for an aggregate
of 4,171,846 shares of our common stock valued at $1.23 per share and warrants
valued at $0.80 per share to purchase 3,071,248 shares of our common stock at a
purchase price of $0.005 per share. The total consideration of the acquisition
was approximately $8.2 million. As a result of this acquisition, the Company has
recorded goodwill of approximately $15.1 million, which is the cost, plus the
net liabilities assumed after the allocation to trained workforce and customer
base of $1.0 million and $2.6 million, respectively. Goodwill, trained workforce
and customer base are being amortized over a period of seven, three and five
years, respectively. ISI created digital communications strategies to help its
clients increase sales, improve communications and create brand identities. ISI
contributed to our growth by increasing the complexity of our technology
services, such as system integration services. It also contributed by increasing
our client base in the financial services and healthcare markets and by
expanding our presence in the Boston market. We incorporated the operations of
ISI into our operations and it currently operates as our Boston office.

    In April 1999, we acquired ERI through a merger in exchange for an aggregate
of 3,659,548 shares of our common stock valued at $1.23 per share and a warrant
valued at $0.80 per share to purchase 4,328,752 shares of our common stock at a
purchase price of $0.005 per share. In addition, we issued 80,690 shares of our
common stock to the former President of ERI, in connection with his employment
agreement with ERI. The total consideration of the acquisition was approximately
$8.1 million. As a result of this acquisition, the Company has recorded goodwill
of approximately $26.4 million, which is the cost, plus the net liabilities
assumed after the allocation to trained workforce and customer base of
$1.3 million and $3.2 million, respectively. Goodwill, trained workforce and
customer base are being amortized over a period of seven, three and five years,
respectively. ERI created, developed and deployed online marketing strategies to
assist a variety of companies, primarily in the United States, in communicating
effectively with their targeted audiences. ERI contributed to our growth by
improving our project management capabilities and by expanding our presence in
Chicago, Portland, Dallas and New York. We incorporated the operations of ERI
into our operations and it currently operates as our Portland, Dallas and Paris
offices. In addition, a portion of ERI's operations has been integrated into our
New York office.

    In May 1999, we purchased all of the issued and outstanding shares of
capital stock of Digital Vision for $1.1 million in cash. As a result of this
acquisition, the Company has recorded goodwill of approximately $1.4 million,
which is the cost plus the net liabilities assumed and is being amortized over a
period of seven years. Digital Vision was an interactive services firm that
provided web site design and development. Digital Vision contributed to our
growth by increasing our presence in the Chicago market. We incorporated the
operations of Digital Vision into our operations and it currently operates as
our Chicago office.

    In August 1999, we purchased all of the issued and outstanding shares of
capital stock of Twinspark for $0.7 million in cash and 1,057,226 shares of our
common stock valued at $11.00 per share, of which 1,047,226 shares were issued
to the shareholders of Twinspark and 10,000 shares were issued to former
employees of Twinspark, for total consideration paid as of December 31, 2000 of
$12.3 million. As a result of this acquisition, the Company has recorded
goodwill of approximately

                                       29
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
$12.2 million, which is the cost plus the net liabilities assumed and is being
amortized over a period of seven years. In January 2001, the Company issued
85,000 additional shares to the former shareholders of Twinspark for settlement
of the final performance payment. This additional consideration will be recorded
as goodwill in January 2001. Twinspark delivers interactive strategies to global
organizations including electronic commerce and strategic consultancy, building
and maintenance of Web sites, Intranet and Extranet and enterprise Web site
management systems. Twinspark contributed to our growth by increasing our
presence in the Dutch market. Twinspark operates as a separate subsidiary.

    In October 1999, we consummated our investment of 5% of the outstanding
equity in Pictoris from its existing shareholders for $0.5 million. In
January 2000, we exercised our option to purchase the remaining 95% of Pictoris.
The total consideration for the acquisition was approximately $12.4 million
consisting of $8.7 million in cash and 78,954 shares of our common stock valued
at approximately $46.00 per share. As a result of this acquisition, the Company
recorded goodwill of approximately $13.3 million, which was the cost plus the
net liabilities assumed and is being amortized over a period of seven years.
Pictoris is located in Paris, France and concentrated on helping its clients
develop their overall interactive strategy and helping them implement that
strategy through design, programming and production of Internet sites. Pictoris
operates as a separate subsidiary.

    In October 1999, we acquired I-traffic through a merger. The consideration
paid to the stockholders of I-traffic totaled $12.5 million, which includes
approximately $3.0 million in cash paid at closing, $1.0 million paid in
January 2000, $1.8 million paid in four quarterly installments during 2000,
469,320 shares of our common stock valued at $11.00 per share, the assumption of
options to purchase 160,680 shares of our common stock at $2.54 per share and
the issuance of newly-granted options to purchase 60,000 shares of our common
stock at $2.50 per share. The total consideration was adjusted for
performance-based payments consisting of $1.8 million that were paid in 2000. As
a result of this acquisition, through December 31, 2000, the Company has
recorded goodwill of approximately $13.3 million, which is the cost plus the net
liabilities assumed and is being amortized over a period of seven years. In
addition, in January 2001, the total consideration was adjusted for
approximately 307,000 shares which were issued in satisfaction of the
achievement of the earn-out. These shares will be recorded as additional
goodwill in January 2001. I-traffic is a full service online direct marketing
company headquartered in New York, with an office in San Francisco. They provide
strategic marketing services through media planning, development, tracking and
the creation of affiliation programs. I-traffic will contribute to our growth by
increasing the complexity of our strategy and creative services, such as
advising clients on online direct marketing. I-traffic operates as a separate
subsidiary.

    In November 1999, we acquired all of the issued and outstanding equity of
Visionik, a company based in Denmark. The total consideration for the
acquisition was $6.8 million, consisting of $0.5 million in cash and 572,000
shares of our common stock valued at $11.00 per share. As a result of this
acquisition, the Company has recorded goodwill of approximately $7.7 million,
which is the cost plus the net liabilities assumed in excess of the net assets
acquired and is being amortized over a period of seven years. Visionik is
located in Copenhagen, Denmark, and concentrates on providing complete
interactive television and Internet-related services to its clients. Visionik
will contribute to our growth by broadening our services to include advising
clients on interactive television applications. Visionik also expanded our
presence in the Danish market. Visionik operates as a separate subsidiary.

    In October 2000, the Company acquired all of the issued and outstanding
shares of Speedmount, a United Kingdom company, for approximately $0.7 million
in the form of equity of the Company. Speedmount's employees and other assets
have been redeployed predominantly to the Company's Paris

                                       30
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
offices. The acquisition of Speedmount deepens the Company's technical service
offering in Europe. As a result of this acquisition, the Company recorded
goodwill of approximately $0.9 million.

    We believe our acquisitions have supported our ability to grow rapidly while
continually enhancing the quality of services we offer our clients. Our
acquisitions have allowed us to rapidly build our base of professionals in the
context of a tight labor market for experienced technical and creative
professionals. From January 1, 1997, to December 31, 2000, our staff increased
from approximately 60 to over 1,500 employees. The acquired entities
collectively employed approximately 710 individuals at the time we acquired
them.

    We evaluate acquisitions based on numerous quantitative and qualitative
factors. Quantitative factors include historical and projected revenues and
profitability, geographic coverage and backlog of projects under contract.
Qualitative factors include strategic and cultural fit, management skills,
customer relationships and technical proficiency.

    We integrate all acquired companies into our operating organization. This
integration includes business development, delivery of services, managerial and
administrative support, benefits, purchasing and all other areas.

    All of our acquisitions have been accounted for using the purchase method.
Under the purchase method, the financial data of the acquired entities are
consolidated with our financial results from the effective dates of their
acquisition. For each acquisition, a portion of the purchase price is allocated
to the tangible and identifiable intangible assets acquired and liabilities
assumed based on their respective fair market values on the acquisition date.
The remaining unallocated portion of the purchase price of each of the
acquisitions is allocated to intangible assets, primarily goodwill, and
amortized on a straight-line basis over the estimated period of benefit, which
is seven years for goodwill, five years for customer base and three years for
workforce. We evaluate the period of benefit on a company-by-company basis. For
the year ended December 31, 1999 and 2000, amortization of intangibles expense
was $7.8 million and $17.2 million, respectively. We expect to incur
amortization expense on currently recorded intangibles of approximately
$18 million for the year ending December 31, 2001. We may incur additional
acquisition related amortization expenses as a result of any future
acquisitions.

    A significant differentiating factor in our growth strategy is that we
manage regional locations based on key success factors rather than traditional
profit-loss statements. In order to facilitate cooperation across our company
and prevent territorial conflicts, we evaluate Regional Presidents on the basis
of key success factors, including project profitability, utilization, retention,
client satisfaction and revenue per billable employee. We believe that managing
by these key success factors enables our offices to function more effectively as
a team and to jointly take advantage of greater opportunities for synergies and
additional revenues.

INVESTMENTS

    In December 1998, the Company entered into an agreement to acquire up to 60%
of EdgeMatrix in a staggered transaction. In December 1998, under this
agreement, the Company acquired 12% of EdgeMatrix's outstanding shares and in
July 1999, increased the investment by an additional 18%. The total cash
consideration for the 30% investment was $3.1 million. Of the $3.1 million,
$2.2 million of the Company's investment in EdgeMatrix represented costs in
excess of 30% of EdgeMatrix's net assets. In accordance with the equity method
of accounting, these costs in excess of the Company's total investment have been
recorded as goodwill in the accompanying financial statements and are

                                       31
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
being amortized over a period of seven years. In November 2000, EdgeMatrix
entered into a recapitalization agreement introducing new investors to
EdgeMatrix. As a result of this recapitalization, the Company's ownership of
EdgeMatrix was partially diluted. In December 2000, the Company disposed of a
portion of the investment for $1.7 million. The proceeds were offset against the
Company's investment in EdgeMatrix and the previously recorded goodwill. The
Company currently owns approximately 19% of EdgeMatrix.

    During 2000, the Company entered into joint venture agreements with QUAXAR,
a company located in Miami, FL and AGENCY.COM Korea, a company based in Korea.
In addition, in October 2000, the Company entered into an agreement with
Botticelli Investments (Cayman), L.P. ("Botticelli"). Botticelli is a limited
partnership that invests in Israeli based technology companies. Under this
agreement, the Company has committed to investing $5.0 million, subject to
capital calls being made by Botticelli. As of December 31, 2000, approximately
$0.9 million has been invested in Botticelli. Botticelli is a partnership
founded by Omnicom and others; several of its investors are related parties of
Omnicom.

RESULTS OF OPERATIONS

    The following discussion relates to our operating results for the periods
noted. The operating results discussed include the operations of acquired
companies from the effective dates of their acquisitions. Given that each year
includes revenues and expenses from new acquisitions, we believe that the
operating results for 2000 are not directly comparable to the operating results
for 1999 and the operating results for 1999 are not directly comparable to the
operating results for 1998.

COMPARISON OF THE FISCAL YEARS 1999 AND 2000

    REVENUES.  Revenues were $87.8 million in 1999 and grew to $202.1 million in
2000, an increase of 130%. $85.9 million and $28.4 million of this growth
related to domestic and international operations, respectively. The total growth
of $114.3 million primarily reflected increases in the number of clients,
average revenues per client and the number of billable employees to meet the
growing demand for our services. The number of clients with revenues over $100K
increased from approximately 100 at December 31, 1999 to approximately 150 at
December 31, 2000, the average revenues per client for our top 20 clients
increased from approximately $2.6 million during the year ended December 31,
1999 to approximately $5.8 million during the year ended December 31, 2000 and
the number of billable employees increased from approximately 810 at
December 31, 1999 to approximately 1,180 at December 31, 2000.

    DIRECT SALARIES AND COSTS.  Direct salaries and costs were $45.5 million for
the year ended December 31, 1999 and grew to $99.0 million for the year ended
December 31, 2000, an increase of 118%. The increase in direct salaries and
costs of $53.5 million for the year ended December 31, 2000 compared to the year
ended December 31, 1999 was due to an increase in the number of personnel needed
to service our client engagements. For the year ended December 31, 1999 and
2000, there were an average of approximately 510 and 1,060 employees,
respectively, included in direct salaries and costs. As a percentage of
revenues, direct salaries and costs decreased from 51.8% for the year ended
December 31, 1999 to 49.0% for the year ended December 31, 2000.

    GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses
were $33.8 million for the year ended December 31, 1999 and grew to
$84.2 million for the year ended December 31, 2000, an increase of 149%. As a
percentage of revenues, general and administrative expenses increased from 38.5%
for the year ended December 31, 1999 to 41.7% for the year ended December 31,
2000. The

                                       32
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
increase in general and administrative expenses in absolute dollar terms of
$50.4 million from 1999 compared to 2000 was primarily due to an increase in the
yearly average of the number of non-billable employees from approximately 170 to
360, resulting in an increase in salaries and benefits of $12.6 million, an
increase in facility costs of $6.7 million to support our growth and the
restructuring charge and other one time costs we incurred in the fourth quarter
of 2000 of $12.9 million.

    SALES AND MARKETING EXPENSES.  Sales and marketing expenses were
$4.7 million for the year ended December 31, 1999 and grew to $12.9 million for
the year ended December 31, 2000, an increase of 174%. As a percentage of
revenues, sales and marketing expenses increased from 5.3% for the year ended
December 31, 1999 to 6.4% for the year ended December 31, 2000. Sales and
marketing expenses increased in absolute dollar terms and as a percentage of
revenues primarily as a result of the increase in the number of sales personnel
from a yearly average of approximately 25, for the year ended December 31, 1999,
to 50, for the year ended December 31, 2000 and an overall increase in our
marketing and branding efforts.

    DEPRECIATION AND AMORTIZATION.  Depreciation and amortization expenses were
$4.6 million for the year ended December 31, 1999 and grew to $7.1 million for
the year ended December 31, 2000, an increase of 54%. As a percentage of
revenues, depreciation and amortization represented 5.3% and 3.5% of revenues
for the year ended December 31, 1999 and 2000, respectively. The increases in
absolute dollar terms from year to year resulted from depreciation of
growth-related infrastructure investments, including technology equipment,
furniture and fixtures and leasehold improvements and the depreciation of the
assets that we acquired.

    AMORTIZATION OF INTANGIBLES.  Amortization of intangibles was $7.8 million
for the year ended December 31, 1999 and grew to $17.2 million for the year
ended December 31, 2000, an increase of 121%. The increase of amortization
expense of $9.4 million primarily related to the impact of our 1999 acquisitions
being amortized for the full year in 2000 as opposed to a partial year of
amortization in 1999. Intangible assets, which primarily include goodwill,
customer base and workforce, are amortized over periods of seven, five and three
years, respectively. As a percentage of revenues, amortization of intangibles
represented 8.9% and 8.5% of revenues for the years ended December 31, 1999 and
2000, respectively.

    NET LOSS.  Net loss for 1999 was $12.9 million compared to a net loss of
$14.7 million for 2000. Excluding the restructuring and other one time charge of
$12.9 million in 2000, our net loss decreased from $12.9 million in 1999 to
$1.8 million in 2000 primarily due to our significant increase in revenues which
were offset by increased direct salaries and costs, general and administrative
expenses, sales and marketing expenses, depreciation and amortization,
amortization of intangibles and non-cash compensation, all of which are
discussed above.

                                       33
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

COMPARISON OF THE FISCAL YEARS 1998 AND 1999

    REVENUES.  Revenues were $26.5 million in 1998 and grew to $87.8 million in
1999, an increase of 231%. $26.0 million, or 42%, of this growth was attributed
to existing operations, of which $20.5 million and $5.5 million related to
domestic and international growth, respectively. $35.3 million of this growth
related to acquisitions, of which $14.4 million, $15.0 million, $2.7 million,
$600,000 and $2.6 million was attributed to Eagle River Interactive, Interactive
Solutions, Inc., Twinspark, Visionik and I-traffic respectively. All of the
growth from acquisitions came from locations that were new to us in 1999. The
$26.0 million attributed to existing operations primarily reflected increases in
the number of clients, average revenues per client and the number of billable
employees to meet the growing demand for our services. Our growth for 1999 was
not materially impacted by foreign currency fluctuations. The number of clients
increased from approximately 100 at December 31, 1998 to approximately 310 at
December 31, 1999, the average revenues per client increased from approximately
$267,000 during the year ended December 31, 1998 to approximately $285,000
during the year ended December 31, 1999 and the number of billable employees
increased from approximately 240 at December 31, 1998 to approximately 810 at
December 31, 1999. The increase to 810 billable employees consisted of 110
employees newly hired to support growing demand for Internet professional
service and approximately 460 billable employees added as a result of our
acquisitions during the year ended December 31, 1999.

    DIRECT SALARIES AND COSTS.  Direct salaries and costs were $15.9 million for
the year ended December 31, 1998 and grew to $45.5 million for the year ended
December 31, 1999, an increase of 186%. The increase in direct salaries and
costs of $29.6 million for the year ended December 31, 1999 compared to the year
ended December 31, 1998 was due to the planned investment in additional
employees and acquisitions in anticipation of future growth. As a percentage of
revenues, direct salaries and costs decreased from 60% for the year ended
December 31, 1998 to 52% for the year ended December 31, 1999. For the year
ended December 31, 1998 and 1999, there were approximately 240 and 810
employees, respectively, included in direct salaries and costs.

    GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses
were $10.9 million for the year ended December 31, 1998 and grew to
$33.8 million for the year ended December 31, 1999, an increase of 210%. As a
percentage of revenues, general and administrative expenses decreased from 41.4%
for the year ended December 31, 1998 to 38.5% for the year ended December 31,
1999. The increase in general and administrative expenses in absolute dollar
terms of $22.9 million from 1998 compared to 1999 was primarily due to an
increase in the number of non-billable employees from approximately 85 to 300,
salaries and benefits of $6.5 million, rent expense of $1.2 million, other
operating expenses of $2.7 million and general and administrative costs from our
acquisitions of $12.5 million.

    SALES AND MARKETING EXPENSES.  Sales and marketing expenses were
$0.6 million for the year ended December 31, 1998 and grew to $4.7 million for
the year ended December 31, 1999, an increase of 683%. As a percentage of
revenues, sales and marketing expenses increased from 2.3% for the year ended
December 31, 1998 to 5.4% for the year ended December 31, 1999. Sales and
marketing expenses increased in absolute dollar terms and as a percentage of
revenues primarily as a result of the increase in the number of sales personnel
and an overall increase in our marketing and branding efforts, such as an
increase in the number of our marketing personnel from two to eight and
increased participation in electronic commerce trade shows.

                                       34
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
    DEPRECIATION AND AMORTIZATION.  Depreciation and amortization expenses were
$1.1 million for the year ended December 31, 1998 and grew to $4.6 million for
the year ended December 31, 1999, an increase of 318%. As a percentage of
revenues, depreciation and amortization represented 4.3% and 5.3% of revenues
for the year ended December 31, 1998 and 1999, respectively. The increases in
absolute dollar terms from year to year resulted from depreciation of
growth-related infrastructure investments, including technology equipment,
furniture and fixtures and leasehold improvements and the depreciation of the
assets of the companies that we acquired, which totaled $1,000 for the year
ended December 31, 1998 as compared to $1.0 million for the year ended
December 31, 1999. We expect these expenses to continue to grow in absolute
dollar terms as we continue to invest in growth and technology and training to
yield more efficient operations and as a result of our acquisitions in 1999, we
expect these expenses to increase in future years.

    AMORTIZATION OF INTANGIBLES.  Amortization of intangibles was $0.9 million
for the year ended December 31, 1998 and grew to $7.8 million for the year ended
December 31, 1999, an increase of 767%. Intangible assets, which primarily
include goodwill, customer base and workforce, are amortized over periods of
seven, five and three years, respectively. As a percentage of revenues,
amortization of intangibles represented 3.4% and 8.9% of revenues in the year
ended December 31, 1998 and 1999, respectively. The increase was due to the
acquisitions of ERI, ISI (including Quadris), Twinspark, I-traffic, Visionik and
Digital Vision. Of this $6.9 million increase, $3.2 million was for ERI,
$1.3 million for ISI, $740,000 for Quadris, $757,000 for Twinspark, $251,000 for
I-traffic, $155,000 for Visionik and $137,000 for Digital Vision, and the
issuance of contingent consideration to former shareholders of Online Magic
resulting in additional amortization of intangibles of $356,000.

    NET LOSS.  Net loss for 1998 was $2.5 million compared to a net loss of
$12.9 million for 1999. For the year ended December 31, 1998, our acquisitions
contributed $180,000 of profit and our continuing operations contributed
$2.7 million of net losses to our total net losses of $2.5 million. For the year
ended December 31, 1999, our acquisitions contributed $(4.0) million of net
losses and our continuing operations contributed $(8.9) million of net losses
for a total net loss of $(12.9) million. The increase in net loss of
$10.4 million between the periods was primarily attributable to amortization of
intangibles of $6.9 million and depreciation and amortization of $3.5 million,
both of which increased at a greater rate than our increase in revenues, both of
which are discussed above.

QUARTERLY RESULTS OF OPERATIONS

    The following tables set forth unaudited consolidated quarterly financial
data for the periods indicated. We derived this data from unaudited consolidated
financial statements, and in the opinion of our management, they include all
adjustments, which consist only of normal recurring adjustments necessary to
present fairly the financial results for the periods. Results of operations for
any previous quarter do not necessarily indicate what results may be for any
future period.

                                       35
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
                        AGENCY.COM LTD. AND SUBSIDIARIES
                  UNAUDITED QUARTERLY ACTUAL OPERATING RESULTS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                   MARCH 31,   JUNE 30,   SEPTEMBER 30,   DECEMBER 31,
                                                     2000        2000         2000            2000
                                                   ---------   --------   -------------   ------------
<S>                                                <C>         <C>        <C>             <C>
Revenues.........................................   $38,505    $50,227       $57,321         $56,037
Direct salaries and costs........................    19,842     24,648        27,287          27,176
                                                    -------    -------       -------         -------
  Gross margin...................................    18,663     25,579        30,034          28,861
Operating expenses
  General and administrative.....................    14,513     17,918        19,394          32,416
  Sales and marketing............................     2,577      2,949         3,951           3,396
  Depreciation and amortization..................     1,548      1,724         1,938           1,906
  Amortization of intangibles....................     4,098      4,310         4,426           4,409
  Non-cash compensation..........................       773        773           409             411
                                                    -------    -------       -------         -------
  Total operational expenses.....................    23,509     27,674        30,118          42,538
                                                    -------    -------       -------         -------
  Loss from operations...........................    (4,846)    (2,095)          (84)        (13,677)
Interest (income)/expense/other..................    (1,014)      (758)         (810)           (665)
                                                    -------    -------       -------         -------
(Loss)/Income before provision for (benefit from)
  income taxes...................................    (3,832)    (1,337)          726         (13,012)
Provision for/(Benefit from) income taxes........       321         29           765          (3,884)
                                                    -------    -------       -------         -------
Net loss.........................................   $(4,153)   $(1,366)      $   (39)        $(9,128)
                                                    =======    =======       =======         =======
Per share information:
  Net loss per common share
    Basic........................................   $ (0.12)   $ (0.04)      $ (0.00)        $ (0.25)
                                                    =======    =======       =======         =======
    Diluted......................................   $ (0.12)   $ (0.04)      $ (0.00)        $ (0.25)
                                                    =======    =======       =======         =======
  Weighted average common shares used
    in computing per share amounts
    Basic........................................    34,878     35,297        35,659          35,956
                                                    =======    =======       =======         =======
    Diluted......................................    34,878     35,297        35,659          35,956
                                                    =======    =======       =======         =======
% of Revenue
Revenues.........................................       100%       100%          100%            100%
Direct salaries and costs........................        52%        49%           48%             48%
                                                    =======    =======       =======         =======
  Gross margin...................................        48%        51%           52%             52%
Operating expenses
  General and administrative.....................        37%        36%           33%             58%
  Sales and marketing............................         7%         6%            7%              6%
  Depreciation and amortization..................         4%         3%            3%              3%
  Amortization of intangibles....................        11%         9%            8%              8%
  Non-cash compensation..........................         2%         2%            1%              1%
                                                    -------    -------       -------         -------
  Total operational expenses.....................        61%        56%           52%             76%
                                                    -------    -------       -------         -------
  (Loss)/Income from operations..................       (13)%       (5)%          (0)%           (24)%
Interest (income)/expense/other..................        (3)%       (2)%          (1)%            (1)%
                                                    -------    -------       -------         -------
  Loss before provision for/(benefit from) income
    taxes........................................       (10)%       (3)%           1%            (23)%
Provision for/(Benefit from) income taxes........         1%         0%            1%             (7)%
                                                    -------    -------       -------         -------
Net loss.........................................       (11)%       (3)%          (0)%           (16)%
                                                    =======    =======       =======         =======
</TABLE>

                                       36
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
                        AGENCY.COM LTD. AND SUBSIDIARIES
            UNAUDITED QUARTERLY ACTUAL OPERATING RESULTS (CONTINUED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                   MARCH 31,   JUNE 30,   SEPTEMBER 30,   DECEMBER 31,
                                                     1999        1999         1999            1999
                                                   ---------   --------   -------------   ------------
<S>                                                <C>         <C>        <C>             <C>
Revenues.........................................   $8,922     $21,467       $26,110         $31,287
Direct salaries and costs........................    4,373      10,699        13,712          16,674
                                                    ------     -------       -------         -------
  Gross margin...................................    4,549      10,768        12,398          14,613
Operating expenses
  General and administrative.....................    2,835       7,820        11,054          12,121
  Sales and marketing............................      234       1,020         1,336           2,081
  Depreciation and amortization..................    1,077         907         1,165           1,478
  Amortization of intangibles....................      310       2,025         2,352           3,096
  Non-cash compensation..........................       --          --            --           1,239
                                                    ------     -------       -------         -------
  Total operational expenses.....................    4,456      11,772        15,907          20,015
                                                    ------     -------       -------         -------
  Income/(Loss) from operations..................       93      (1,004)       (3,509)         (5,402)
Interest expense other...........................      208         847         1,070             686
                                                    ------     -------       -------         -------
  Loss before provision for income taxes.........     (115)     (1,851)       (4,579)         (6,088)
Provision for income taxes.......................       13          40           185               8
                                                    ------     -------       -------         -------
Net loss.........................................   $ (128)    $(1,891)      $(4,764)        $(6,096)
                                                    ======     =======       =======         =======
Per share information:
  Net loss per common share
    Basic........................................   $(0.01)    $ (0.08)      $ (0.18)        $ (0.21)
                                                    ======     =======       =======         =======
    Diluted......................................   $(0.01)    $ (0.08)      $ (0.18)        $ (0.21)
                                                    ======     =======       =======         =======
  Weighted average common shares used
    in computing per share amounts
    Basic........................................   17,179      25,177        26,310          29,403
                                                    ======     =======       =======         =======
    Diluted......................................   17,179      25,177        26,310          29,403
                                                    ======     =======       =======         =======
% of Revenue
Revenues.........................................      100%        100%          100%            100%
Direct salaries and costs........................       49%         50%           53%             53%
                                                    ------     -------       -------         -------
  Gross margin...................................       51%         50%           47%             47%
Operating expenses
  General and administrative.....................       32%         37%           42%             38%
  Sales and marketing............................        3%          5%            5%              7%
  Depreciation and amortization..................       12%          4%            4%              5%
  Amortization of intangibles....................        3%          9%            9%             10%
  Non-cash compensation..........................        0%          0%            0%              4%
                                                    ------     -------       -------         -------
  Total operational expenses.....................       50%         55%           60%             64%
                                                    ------     -------       -------         -------
  Income/(loss) from operations..................        1%         (5)%         (13)%           (17)%
Interest expense/other...........................        2%          4%            4%              2%
                                                    ------     -------       -------         -------
  Loss before provision for income taxes.........       (1)%        (9)%         (17)%           (19)%
Provision for income taxes.......................        0%          0%            1%              0%
                                                    ------     -------       -------         -------
Net loss.........................................       (1)%        (9)%         (18)%           (19)%
                                                    ======     =======       =======         =======
</TABLE>

                                       37
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
    We have generally experienced lower growth in the first and fourth quarters
of the year than in other quarters. We believe that this is due to client budget
cycles.

LIQUIDITY AND CAPITAL RESOURCES

    Since inception, we have funded our operations and investments in property
and equipment primarily through cash from operations, borrowings from Omnicom,
capital leases and our initial public offering.

    At December 31, 2000, the Company had approximately $70.6 million in cash
and cash equivalents and $4.9 million in certificate of deposits. For the year
ended December 31, 2000, net cash provided by operating activities was
approximately $9.3 million. Net cash used in investing activities was
approximately $26.6 million, of which $13.1 million was related to capital
expenditures, $11.6 million was primarily due to our acquisitions of Pictoris
and Speedmount and $1.9 million to net additional investments. The Company had
net cash provided by financing activities of approximately $2.8 million, of
which $6.2 million was from proceeds from the employee stock purchase plan and
exercise of stock options offset by payments on capital lease obligations of
$2.2 million, the repurchase of 150,000 shares of the Company's common stock of
$0.9 million and other net of $0.3 million.

    Capital expenditures of approximately $1.9 million, $12.2 million and
$13.1 million for the years ended December 31, 1998, 1999 and 2000,
respectively, were used primarily for computer equipment, office equipment and
leasehold improvements related to the Company's growth.

    On November 4, 1999, we entered into an $85.0 million credit facility with
Omnicom Finance, a wholly owned subsidiary of Omnicom, to replace our revolving
credit line and consolidate all of our previously outstanding indebtedness due
to Omnicom Finance. The new credit facility, which terminates on September 30,
2001, provided for a $25.0 million term loan facility, a $54.0 million revolving
credit line and a real property lease credit support facility providing letters
of credit and/or guarantees up to $6.0 million in the aggregate. As required by
the credit facility, in December 1999, we repaid the full amounts borrowed of
$77.2 million, under the term loan portion of the new credit facility. As of
December 31, 2000, we did not have any borrowings outstanding on our
$54.0 million revolving credit line with Omnicom Finance. This credit facility
bears interest at Omnicom's commercial paper rate plus 1.25%. As of
December 31, 2000, Omnicom's commercial paper rate was 7.6%. As of December 31,
2000, Omnicom Finance has incurred obligations totaling approximately
$5.1 million in connection with the issuance of a lease guaranty of our lease of
our New York facility. We pay to Omnicom Finance a fee equal to 0.5% per annum
of the aggregate outstanding amount of such lease guaranty obligation. The
credit facility is secured by substantially all of our assets, including the
shares of our subsidiaries, is guaranteed by our domestic subsidiaries and
prohibits us and our subsidiaries from paying dividends other than in shares of
our stock. The credit facility requires compliance with a number of covenants,
including restrictions on asset sales, liens, the incurrence of debt, making of
loans and the repurchase, redemption or other acquisition of our stock.

    In December 2000, the Company secured loans in aggregate amounts of
$5.5 million that were made to certain officers by a third party bank that is
secured by cash of approximately $5.0 million. In return for this transaction,
the officers indemnified the Company and pledged to the Company approximately
1.6 million shares of common stock they held in the Company.

    To date, our main sources of liquidity have been cash from operations,
borrowings from Omnicom and our proceeds from our initial public offering. We
believe that on a short-term basis we will have sufficient funds for working
capital, capital expenditures from our existing working capital and

                                       38
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
increased cash flow from operations resulting from the collection of outstanding
accounts receivable and the billing and collection of unbilled charges. We
believe that on a long-term basis our liquidity will be funded, if necessary,
from additional equity financing or borrowings under our credit facility. We
believe that our current cash, cash equivalents and short-term investments,
available borrowings under our credit facility and the net proceeds from our
initial public offering will be sufficient to meet our working capital and
capital expenditure requirements for at least the next 12 months.

RECENT ACCOUNTING PRONOUNCEMENTS

    In December 1999, the Securities and Exchange Commission ("SEC") released
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements," which provides guidance on the recognition, presentation and
disclosure of revenue in financial statements filed with the SEC. Subsequently,
the SEC released SAB 101B, which delayed the implementation date of SAB 101 for
registrants with fiscal years that begin between December 16, 1999 and
March 15, 2000. The Company was required to be in conformity with the provisions
of SAB 101, as amended by SAB 101B, no later than October 1, 2000. The adoption
of SAB 101, as amended by SAB 101B, did not have a material adverse effect on
our financial position, results of operations or cash flows.

    In July 1999, the Financial Accounting Standards Board ("FASB") approved
Statement of Financial Accounting Standard ("SFAS") No. 137 "Accounting for
Derivative Instruments and Hedging Activities--Deferral of the Effective date of
FASB Statement No. 133" SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" establishes accounting and reporting standards requiring
that every derivative instrument, including certain derivative instruments
embedded in other contracts, be recorded in the balance sheet as either an asset
or liability measured at its fair value. The statement also requires that
changes in the derivative's fair value be recognized in earnings unless specific
hedge accounting criteria are met. The adoption of SFAS No. 133 will not have a
material effect on the Company's Consolidated Financial Statements.

    In March 2000, the FASB issued Interpretation No. 44 ("FIN. 44"),
"Accounting for Certain Transactions Involving Stock Compensation, and
Interpretation of Accounting Principles Board ("APB") Opinion No. 25". The
Interpretation is intended to clarify certain problems that have arisen in
practice since the issuance of APB No. 25, "Accounting for Stock Issued to
Employees." The effective date of the interpretation was July 1, 2000. The
provisions of the interpretation apply prospectively, but they also covered
certain events occurring after December 15, 1998 and after January 12, 2000. The
adoption of FIN. 44 did not have a material adverse effect on our current or
historical consolidated financial statements, but may affect future accounting
regarding stock option transactions.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

    INTEREST RATE RISK.  To date, we have not utilized derivative financial
instruments or derivative commodity instruments. We invested approximately
$17.4 million of our cash with Omnicom Finance, a related party that is 100%
owned by our largest stockholder, Omnicom, and in a certificate of deposit and
money market funds, which are subject to minimal credit and market risk. We
believe the market risks associated with these financial instruments are
immaterial.

    FOREIGN CURRENCY RISK.  We face foreign currency risks primarily as a result
of the revenues we receive from services delivered through our foreign
subsidiaries. These subsidiaries incur most of their expenses in the local
currency. Accordingly, our foreign subsidiaries use the local currency as their
functional currency.

                                       39
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)
    We are also exposed to foreign exchange rate fluctuations, primarily with
respect to the British Pound and the Euro, as the financial results of foreign
subsidiaries are translated into United States Dollars for consolidation. As
exchange rates vary, these results, when translated, may vary from expectations
and adversely impact net income (loss) and overall profitability. The effect of
foreign exchange rate fluctuation for the year ended December 31, 2000 was not
material.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

    See the Consolidated Financial Statements and Financial Statement Schedule
of the Company and its subsidiaries filed as part of this report and listed on
the index to financial statements set forth in Item 14 of this Form 10K, which
are incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

    In July 1998, we replaced Ernst & Young LLP and engaged Arthur Andersen LLP
as our independent accountants to audit our financial statements as of, and for
the period ended December 31, 1997. The decision to change independent
accountants from Ernst & Young LLP to Arthur Andersen LLP was approved by our
board of directors. We believe, and have been advised by Ernst & Young LLP that
it concurs in this belief, that, for the period from January 1, 1996 through the
date of dismissal (the entire period of its engagement), AGENCY.COM and Ernst &
Young LLP did not have any disagreement on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure,
that if not resolved to the satisfaction of Ernst & Young LLP, would have caused
it to make reference in connection with its report on our financial statements
to the subject matter of the disagreement. Ernst & Young LLP's report on our
financial statements for the period from January 1, 1996 through December 31,
1996 did not contain an adverse opinion or a disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit scope or accounting principles.
During that year there were no "reportable events" within the meaning of Item
304(a)(1)(v) of Regulation S-K promulgated under the Securities Act.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    Information responsive to this Item is incorporated herein by reference to
AGENCY.COM's definitive Proxy Statement for the 2001 annual meeting of our
stockholders.

ITEM 11. EXECUTIVE COMPENSATION

    Information responsive to this Item is incorporated herein by reference to
AGENCY.COM's definitive Proxy Statement for the 2001 annual meeting of our
stockholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    Information responsive to this Item is incorporated herein by reference to
AGENCY.COM's definitive Proxy Statement for the 2001 annual meeting of our
stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

    Information responsive to this Item is incorporated herein by reference to
AGENCY.COM's definitive Proxy Statement for the 2001 annual meeting of our
stockholders.

                                       40
<PAGE>
                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

    (a) Documents filed as part of this report:

       (1) Financial Statements

          The Consolidated Financial Statements as set forth in the Index to
           Financial Statements on page F-1 hereof, are filed as part of this
           report.

       (2) Financial Statement Schedule:

          The Financial Statement Schedule as set forth in the Index to
           Financial Statements on page F-1 hereof is filed as part of this
           report.

       (3) Exhibits:

<TABLE>
<CAPTION>
NUMBER                                          DESCRIPTION
------                  ------------------------------------------------------------
<C>                     <S>
             3.1+       Amended and Restated Certificate of Incorporation.

             3.3+       Amended and Restated By-laws.

             4.1+       Specimen common stock certificate.

             4.2+       See Exhibits 3.1 and 3.2 for provisions of the Certificate
                        of Incorporation and By-laws of the Registrant defining the
                        rights of holders of Common Stock of the Registrant.

            10.1+       1999 Stock Option/Stock Issuance Plan (as Amended Restated
                        on October 13, 1999).*

            10.2+       Interactive Solutions Incorporated 1996 Stock Option Plan.

            10.3+       1998 Quadris Consulting, Inc. Equity Incentive Plan.*

            10.4+       Employment Agreement dated April 28, 1999, by and between
                        Chan Suh and the Registrant.*

            10.5+       Employment Agreement dated April 28, 1999, by and between
                        Kyle Shannon and the Registrant.*

            10.6+       Employment Agreement dated April 28, 1999, by and between
                        Kevin Rowe and the Registrant.*

            10.7+       Employment Agreement dated April 28, 1999, by and between
                        Kenneth Trush and the Registrant.*

            10.8+       Employment Agreement dated April 28, 1999, by and between
                        Eamonn Wilmott and the Registrant.*

            10.9+       Employment Agreement dated April 28, 1999, by and between
                        Lawrence Krakauer and the Registrant.*

           10.10+       Employment Agreement dated April 28, 1999, by and between
                        Janet Ambrosi Wertman and the Registrant.*

            10.11       Employment Agreement dated October 17, 2000, by and between
                        James Imbriaco and the Registrant.*

           10.12+       Restricted Stock Agreement, dated April 16, 1999, by and
                        between Kevin Rowe and the Registrant.*
</TABLE>

                                       41
<PAGE>

<TABLE>
<CAPTION>
NUMBER                                          DESCRIPTION
------                  ------------------------------------------------------------
<C>                     <S>
          10.12A+       Credit Agreement, dated as of November 4, 1999 between
                        Omnicom Finance Inc. and the Registrant and Subsidiary
                        Guarantors.

           10.12B       Letter Agreement, dated January 26, 2000, by and between the
                        Registrant and Omnicom Finance, amending certain provisions
                        of the Credit Agreement.

           10.13+       Agreement and Plan of Merger, dated April 28, 1999, by and
                        between Interactive Solutions Incorporated and Quadris
                        Consulting, Inc.

           10.14+       Agreement and Plan of Merger, dated April 28, 1999, by and
                        between Interactive Solutions Incorporated and the
                        Registrant.

           10.15+       Agreement and Plan of Merger, dated April 28, 1999, by and
                        between Eagle River Interactive Inc. and the Registrant.

           10.16+       Agreement dated April 27, 1999, by and between Jeffrey
                        Rayport and the Registrant.

           10.17+       Stock Purchase Agreement, dated July 23, 1999, by and
                        between Topics Interactive Factory B.V. and the Registrant,
                        as amended.

           10.18+       Registration Rights Agreement dated November 23, 1999, by
                        and among the Registrant and Omnicom.

           10.19+       Employment Agreement dated October 28, 1999, by and between
                        Charles Dickson and the Registrant.*

           10.20+       Agreement and Plan of Merger, dated October 21, 1999, by and
                        among the Registrant ITI Acquisition Inc., Interactive
                        Traffic, Inc., and the Stockholders listed therein.

           10.21+       Acquisition Agreement, dated October 23, 1999, by and
                        between the Registrant and the Stockholders listed therein
                        and In-Com.

           10.22+       Stock Exchange Agreement, dated November 3, 1999, by and
                        between the Registrant and Visionik Holding ApS, Associated
                        Management Services A/S and Jorgen Lembke and Soren
                        Hougaard-Hansen.

           10.23+       1999 Employee Stock Purchase Plan.*

           10.24+       Consulting Agreement dated November 22, 1999, by and between
                        Thomas DeLong and the Registrant.

           10.25+       Warrant Agreement, dated November 24, 1999, by and between
                        Omnicom Group Inc. and the Registrant.

           10.26+       Warrant Agreement, as amended, dated April 28, 1999, by and
                        between Communicade, Inc. and the Registrant.

           10.27+       Lease, dated April 15, 1999, by and between 20 Place
                        Associates LLC and the Registrant.

            10.28       Separation and General Release and Consulting Agreement,
                        dated January 31, 2001, by and between Janet Ambrosi Wertman
                        and the Registrant*

            10.29       Promissory Note, Pledge Agreement and Indemnity Agreement to
                        the Company by Chan Suh

            10.30       Promissory Note, Pledge Agreement and Indemnity Agreement to
                        the Company by Kyle Shannon
</TABLE>

                                       42
<PAGE>

<TABLE>
<CAPTION>
NUMBER                                          DESCRIPTION
------                  ------------------------------------------------------------
<C>                     <S>
            10.31       Promissory Note, Pledge Agreement and Indemnity Agreement to
                        the Company by Eamonn Wilmott

            16.1+       Letter from Ernst & Young LLP re Change in Certifying
                        Accountants.

            21.1+       Subsidiaries of the Registrant.

             23.1       Consent of Arthur Andersen LLP-New York, New York.
</TABLE>

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

+   Incorporated by reference to the exhibits filed with the Registrant's
    Registration Statement on Form S-1 (Reg. No. 333-986433), which was declared
    effective on December 8, 1999.

*   Management contract or compensatory plan or arrangement.

(b) Reports on Form 8-K

    None.

                                       43
<PAGE>
                                   SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of New
York, State of New York, on this 28th day of March 2001.

<TABLE>
<S>                                                    <C>  <C>
                                                       AGENCY.COM LTD.

                                                       By:  /s/ CHARLES DICKSON
                                                            -----------------------------------------
                                                            Name:  Charles Dickson
                                                            Title:   Executive Vice President,
                                                            Treasurer and Chief Financial Officer

                                                       AGENCY.COM LTD.

                                                       By:  /s/ MICHAEL JACKSON
                                                            -----------------------------------------
                                                            Name:  Michael Jackson
                                                            Title:   Corporate Controller (signing in
                                                            his capacity as Chief Accounting Officer)
</TABLE>

    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities indicated on
March 28, 2001:

<TABLE>
<CAPTION>
                      SIGNATURE                                           TITLE(S)
                      ---------                                           --------
<C>                                                    <S>
                    /s/ CHAN SUH                       President and Chief Executive Officer, and
     -------------------------------------------         Chairman of the Board of Directors
                      Chan Suh                           (Principal Executive Officer)

                  /s/ KYLE SHANNON
     -------------------------------------------       Chief People Officer and Director
                    Kyle Shannon

                  /s/ KENNETH TRUSH
     -------------------------------------------       Executive Vice President and Director
                    Kenneth Trush

                 /s/ CHARLES DICKSON                   Executive Vice President, Treasurer and Chief
     -------------------------------------------         Financial Officer (Principal Financial
                   Charles Dickson                       Officer)

                 /s/ MICHAEL JACKSON
     -------------------------------------------       Corporate Controller (Principal Accounting
                   Michael Jackson                       Officer)

              /s/ GERALD BRUCE REDDITT
     -------------------------------------------       Director
                Gerald Bruce Redditt

                  /s/ JOHN D. WREN
     -------------------------------------------       Director
                    John D. Wren

                 /s/ JEFFREY RAYPORT
     -------------------------------------------       Director
                   Jeffrey Rayport

                  /s/ THOMAS DELONG
     -------------------------------------------       Director
                    Thomas DeLong
</TABLE>

                                       44
<PAGE>
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                        AGENCY.COM LTD. AND SUBSIDIARIES

<TABLE>
<S>                                                           <C>
Report of Management........................................      F-2

Report of Independent Public Accountants....................      F-3

Consolidated Balance Sheets as of December 31, 1999 and
  2000......................................................      F-4

Consolidated Statements of Operations for the three years
  ended December 31, 2000...................................      F-5

Consolidated Statements of Stockholders' Equity for the
  three years ended December 31, 2000.......................      F-6

Consolidated Statements of Cash Flows for the three years
  ended December 31, 2000...................................      F-7

Notes to Consolidated Financial Statements..................      F-8

Schedule II--Schedule of Valuation and Qualifying
  Accounts..................................................  Schedule II
</TABLE>

                                      F-1
<PAGE>
                              REPORT OF MANAGEMENT

    The management of AGENCY.COM Ltd. is responsible for the integrity of the
financial data reported by the Company and its subsidiaries. Management uses its
best judgment to ensure that the financial statements present fairly, in all
material respects, the consolidated financial position and results of operations
of AGENCY.COM Ltd. and subsidiaries. These financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States.

    The system of internal controls of the Company is designed to provide
reasonable assurance that assets are safeguarded and records are maintained to
substantiate the preparation of accurate financial information. Underlying this
concept of reasonable assurance is the premise that the cost of control should
not exceed the benefits derived therefrom.

    The financial statements have been audited by independent public
accountants. Their report expresses an independent informed judgment as to the
fairness of management's reported operating results and financial position. This
judgment is based on the procedures described in the second paragraph of their
report.

    The Audit Committee meets periodically with representatives of financial
management and the independent public accountants to assure that each is
properly discharging their responsibilities. In order to ensure complete
independence, the Audit Committee communicates directly and separately with the
independent public accountants and financial management to discuss the results
of their audits, the adequacy of internal accounting controls and the quality of
financial reporting.

<TABLE>
<S>                                        <C>
           /s/ Charles Dickson                        /s/ Michael Jackson
----------------------------------------    ----------------------------------------
             Charles Dickson                            Michael Jackson
        Executive Vice President                     Corporate Controller
       and Chief Financial Officer             and Principal Accounting Officer
</TABLE>

                                      F-2
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors of
AGENCY.COM Ltd. and Subsidiaries:

    We have audited the accompanying consolidated balance sheets of
AGENCY.COM Ltd. (a Delaware corporation) and subsidiaries, as of December 31,
1999 and 2000 and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years ended
December 31, 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of AGENCY.COM Ltd. and
subsidiaries as of December 31, 1999 and 2000 and the results of their
operations and their cash flows for each of the three years ended December 31,
2000 in conformity with accounting principles generally accepted in the United
States.

    Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of valuation and qualifying
accounts-Schedule II of this Form 10-K for the three years ended December 31,
2000 is presented for the purpose of complying with the Securities and Exchange
Commissions rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

                                          ARTHUR ANDERSEN LLP

New York, New York
February 1, 2001

                                      F-3
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                              DECEMBER 31,   DECEMBER 31,
                                                                  1999           2000
                                                              ------------   ------------
<S>                                                           <C>            <C>
                           ASSETS

Current Assets:
Cash and cash equivalents...................................    $ 85,035       $ 70,659
Certificate of deposit......................................          --          4,883
Accounts receivable, net of allowance for doubtful accounts
  of $5,164 and $5,144, respectively........................      23,768         32,669
Unbilled charges............................................       9,224          9,717
Prepaid expenses and other current assets...................       1,698          1,842
Other receivables...........................................          --          5,157
Due from related parties....................................         255            485
                                                                --------       --------
  Total current assets......................................     119,980        125,412
Property and equipment, net of accumulated depreciation and
  amortization of $9,325 and $14,726, respectively..........      18,554         28,300
Intangibles, net of accumulated amortization of $8,749 and
  $26,179, respectively.....................................      85,244         88,161
Deferred tax assets.........................................         547          8,705
Investments and other assets................................       2,566          4,222
                                                                --------       --------
  Total assets..............................................    $226,891       $254,800
                                                                ========       ========

            LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable and accrued expenses.......................    $ 18,075       $ 28,262
Accrued restructuring costs.................................          --         11,086
Income taxes payable........................................       1,462          1,472
Deferred revenue............................................      10,283         10,757
Current portion of capital lease obligations................       1,511          2,117
Due to related parties......................................       1,003             --
                                                                --------       --------
  Total current liabilities.................................      32,334         53,694
                                                                ========       ========
Long-Term Liabilities:
Deferred tax liabilities....................................         482          3,389
Capital lease obligations...................................       1,644          2,750
Due to related parties......................................       1,217             --
Deferred rent...............................................         240          2,993
Other long-term liabilities.................................         281            460
                                                                --------       --------
  Total long-term liabilities...............................       3,864          9,592
                                                                --------       --------
  Total liabilities.........................................      36,198         63,286
                                                                --------       --------
Commitments and Contingencies (Note 11)
Stockholders' Equity (Note 9):
Preferred stock, $0.001 par value, 10,000,000 shares
  authorized; none issued or outstanding as of December 31,
  1999 and 2000, respectively...............................          --             --
Common stock, $0.001 par value, 200,000,000 shares
  authorized; 34,849,641 and 38,260,067 shares issued and
  34,726,265 and 38,260,067 shares outstanding at December
  31, 1999 and 2000, respectively...........................          35             38
Treasury stock, 150,000 shares at cost......................          --           (882)
Additional paid-in capital..................................     204,554        220,724
Accumulated deficit.........................................     (13,725)       (28,410)
Accumulated other comprehensive (loss) income...............        (171)            44
                                                                --------       --------
  Total stockholders' equity................................     190,693        191,514
                                                                --------       --------
  Total liabilities and stockholders' equity................    $226,891       $254,800
                                                                ========       ========
</TABLE>

    The accompanying notes are an integral part of these consolidated balance
sheets.

                                      F-4
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                           ------------------------------------
                                                              1998         1999         2000
                                                           ----------   ----------   ----------
<S>                                                        <C>          <C>          <C>
Revenues.................................................  $   26,452   $   87,786   $  202,090
Direct salaries and costs................................      15,930       45,458       98,953
                                                           ----------   ----------   ----------
    Gross profit.........................................      10,522       42,328      103,137
General and administrative...............................      10,944       33,830       84,241
Sales and marketing......................................         596        4,671       12,873
Depreciation and amortization............................       1,141        4,627        7,116
Amortization of intangibles..............................         893        7,783       17,243
Non-cash compensation....................................          --        1,239        2,366
                                                           ----------   ----------   ----------
    Loss from operations.................................      (3,052)      (9,822)     (20,702)
Interest (expense) / income, net.........................        (360)      (2,862)       3,247
                                                           ----------   ----------   ----------
    Loss before minority interest and income taxes.......      (3,412)     (12,684)     (17,455)
Minority interest........................................        (282)          51           --
                                                           ----------   ----------   ----------
    Loss before / (benefit from) provision for income
    taxes................................................      (3,694)     (12,633)     (17,455)
(Benefit from) / Provision for income taxes..............      (1,213)         246       (2,769)
                                                           ----------   ----------   ----------
Net loss.................................................  $   (2,481)  $  (12,879)  $  (14,686)
                                                           ==========   ==========   ==========
Per share information:
    Net loss per common share
      Basic and Diluted..................................  $    (0.15)  $    (0.53)  $    (0.41)
                                                           ==========   ==========   ==========
    Weighted average common shares used in computing per
    share amounts:
      Basic and Diluted..................................  16,854,499   24,494,603   35,451,624
                                                           ==========   ==========   ==========
</TABLE>

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

                                      F-5
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                  COMMON STOCK        TREASURY     ADDITIONAL      RETAINED     ACCUMULATED OTHER       TOTAL
                              ---------------------     STOCK       PAID-IN       EARNINGS/       COMPREHENSIVE     STOCKHOLDERS'
                                SHARES      AMOUNT     AMOUNT       CAPITAL       (DEFICIT)       (LOSS) INCOME        EQUITY
                              ----------   --------   ---------   ------------   ------------   -----------------   -------------
<S>                           <C>          <C>        <C>         <C>            <C>            <C>                 <C>
Balance, January 1, 1998....  16,200,000   $16,200    $      --   $  1,797,691   $  1,634,921       $     --        $  3,448,812
Common stock issued in
  connection with Spiral
  Media Inc. acquisition....     480,626       480           --        535,425             --             --             535,905
Common stock issued in
  connection with Online
  Magic Ltd. acquisition....     498,434       498           --        555,255             --             --             555,753
Capital Contribution........          --        --           --          9,899             --             --               9,899
Foreign currency translation
  adjustment................          --        --           --             --             --         (9,308)             (9,308)
Net loss....................          --        --           --             --     (2,480,980)            --          (2,480,980)
                              ----------   -------    ---------   ------------   ------------       --------        ------------
Balance, December 31,
  1998......................  17,179,060    17,178           --      2,898,270       (846,059)        (9,308)          2,060,081
Common stock issued in
  connection with Eagle
  River Interactive
  acquisition...............   3,740,238     3,740           --      4,497,584             --             --           4,501,324
Warrants issued in
  connection with Eagle
  River Interactive
  acquisition...............          --        --           --      3,428,471             --             --           3,428,471
Common stock issued in
  connection with
  Interactive Solutions
  acquisition...............   4,171,846     4,172           --      5,127,199             --             --           5,131,371
Stock options issued in
  connection with
  Interactive Solutions
  acquisition...............          --        --           --        722,191             --             --             722,191
Warrants issued in
  connection with
  Interactive Solutions
  acquisition...............          --        --           --      2,424,620             --             --           2,424,620
Common stock issued in
  connection with Twinspark
  Interactive...............   1,057,226     1,057           --     11,628,429             --             --          11,629,486
Common stock issued as
  contingent consideration
  in connection with Online
  Magic Ltd. acquisition....     123,376       123           --      1,357,794             --             --           1,357,917
Common stock issued in
  connection with Visionik
  acquisition...............     572,000       572           --      6,291,428             --             --           6,292,000
Common stock issued in
  connection with I-traffic
  acquisition...............     469,320       469           --      5,162,051             --             --           5,162,520
Stock options issued in
  connection with I-traffic
  acquisition...............          --        --           --      1,509,353             --             --           1,509,353
Sale of common stock under
  public offering, net of
  expenses..................   6,785,000     6,785           --    157,591,026             --             --         157,597,811
Foreign currency translation
  adjustment................          --        --           --             --             --       (161,968)           (161,968)
Deferred compensation.......          --        --           --      1,238,565             --             --           1,238,565
Exercise of employee stock
  options...................     628,199       628           --        677,004             --             --             677,632
Net loss....................          --        --           --             --    (12,879,050)            --         (12,879,050)
                              ----------   -------    ---------   ------------   ------------       --------        ------------
Balance, December 31,
  1999......................  34,726,265    34,724           --    204,553,985    (13,725,109)      (171,276)        190,692,324
Public offering expenses....          --        --           --       (349,219)            --             --            (349,219)
Common stock issued in
  connection with Speedmount
  acquisition...............      48,832        49           --        662,235             --             --             662,284
Common stock issued in
  connection with Pictoris
  acquisition...............      78,954        79           --      3,641,595             --             --           3,641,674
Common stock issued in
  connection with Employee
  Stock Purchase Plan.......     309,574       310           --      4,049,995             --             --           4,050,305
Common stock issued as
  contingent consideration
  in connection with Online
  Magic Ltd. acquisition....     123,376       123           --      3,639,469             --             --           3,639,592
Deferred compensation.......          --        --           --      2,366,417             --             --           2,366,417
Repurchase of common
  stock.....................          --        --     (882,190)            --             --             --            (882,190)
Foreign currency translation
  adjustment................          --        --           --             --             --        215,514             215,514
Tax benefit from exercise of
  stock options.............          --        --           --      1,000,000             --             --           1,000,000
Exercise of employee stock
  options...................     741,066       743           --      1,150,887             --             --           1,151,630
Exercise of warrants........   2,232,000     2,232           --          9,072             --             --              11,304
Net loss....................          --        --           --             --    (14,685,281)            --         (14,685,281)
                              ----------   -------    ---------   ------------   ------------       --------        ------------
Balance, December 31,
  2000......................  38,260,067   $38,260    $(882,190)  $220,724,436   $(28,410,390)      $ 44,238        $191,514,354
                              ==========   =======    =========   ============   ============       ========        ============
</TABLE>

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

                                      F-6
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                1998       1999       2000
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Cash Flows from Operating Activities:
Net loss....................................................  $(2,481)   $(12,879)  $(14,686)
Adjustments to reconcile net loss to net cash provided by
  (used in) operating activities--
  Allowance for doubtful accounts...........................      785         244        (20)
  Depreciation and amortization.............................    2,034      12,258     24,359
  Deferred income taxes.....................................   (1,596)       (274)    (5,251)
  Deferred rent expense.....................................       --         240      2,753
  Non-cash compensation expense.............................       --       1,239      2,366
Changes in operating assets and liabilities:
  Certificate of deposits...................................       --          --     (4,883)
  Accounts receivable.......................................       43     (14,705)    (8,429)
  Unbilled charges..........................................   (1,646)       (296)      (493)
  Prepaid expenses and other current assets.................       26        (405)      (144)
  Other receivables.........................................       --          --     (5,157)
  Due from related parties..................................      157        (255)      (230)
  Other assets..............................................     (124)        656        334
  Accounts payable and accrued expenses.....................    3,155       5,332      9,633
  Accrued restructuring costs...............................       --          --     11,086
  Income taxes payable......................................      (64)      1,267         10
  Deferred revenue..........................................       92       5,167        352
  Due to related parties....................................      454       1,313     (2,220)
  Other long-term liabilities...............................       67          68       (118)
                                                              -------    --------   --------
Net cash provided by (used in) operating activities.........      902      (1,030)     9,262
                                                              -------    --------   --------
Cash Flows from Investing Activities:
  Capital expenditures......................................   (1,884)    (12,186)   (13,110)
  Acquisitions, net of cash acquired........................   (7,699)    (10,787)   (11,566)
  Investment in affiliates..................................       --        (993)    (1,927)
                                                              -------    --------   --------
Net cash (used in) investing activities.....................   (9,583)    (23,966)   (26,603)
                                                              -------    --------   --------
Cash Flows from Financing Activities:
  Proceeds from note payable due to Omnicom.................    9,564      29,396         --
  Payments on note payable to Omnicom.......................       --     (77,213)        --
  Payments under capital lease obligations..................     (271)       (942)    (2,232)
  Net borrowings under line of credit.......................      (86)        (55)        --
  Proceeds from common stock offering, net..................       --     157,561       (349)
  Deferred registration costs...............................     (146)         --         --
  Capital contribution......................................       10          --         --
  Proceeds from Employee Stock Purchase Plan................       --          --      4,050
  Repurchase of common stock................................       --          --       (882)
  Proceeds from exercise of stock options...................       --         677      2,163
                                                              -------    --------   --------
  Net cash provided by financing activities.................    9,071     109,424      2,750
                                                              -------    --------   --------
Effect of Exchange Rate on Cash and Cash Equivalents........       (9)       (162)       215
                                                              -------    --------   --------
Net increase (decrease) in Cash and Cash Equivalents........      381      84,266    (14,376)
Cash and Cash Equivalents, beginning of year................      388         769     85,035
                                                              -------    --------   --------
Cash and Cash Equivalents, end of year......................  $   769    $ 85,035   $ 70,659
                                                              =======    ========   ========
Supplemental Disclosures of Cash Flow Information:
  Income taxes paid.........................................  $   315    $    246   $  1,044
                                                              =======    ========   ========
  Interest paid.............................................  $     2    $  2,862   $    163
                                                              =======    ========   ========
Supplemental Disclosure of Non-Cash Investing Activities:
  Equipment acquired under capital leases...................  $ 1,444    $  2,685   $  3,943
                                                              =======    ========   ========
  Retirement of fixed assets................................  $    --    $     --   $  1,927
                                                              =======    ========   ========
Supplemental Disclosure of Non-Cash Financing Activities:
  Common stock issued for acquisitions......................  $ 1,092    $ 25,379   $  7,944
                                                              =======    ========   ========
  Warrants issued for acquisitions..........................  $    --    $  5,853   $     --
                                                              =======    ========   ========
  Stock options issued for acquisitions.....................  $    --    $  2,232   $     --
                                                              =======    ========   ========
  Tax benefit from exercise of stock options................  $    --    $     --   $  1,000
                                                              =======    ========   ========
</TABLE>

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

                                      F-7
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    BUSINESS

    AGENCY.COM Ltd. and its subsidiaries (collectively the "Company" or
"AGENCY.COM") is an international Internet, interactive television and mobile
business professional services firm. The Company provides clients with an
integrated set of strategy, creative and technology services that takes them
from concept to launch and operation of their interactive businesses. The
Company's services include: advising, consulting and planning on the strategic
implications of interactive technologies for a company's business; designing
creative, content, interface and information architecture elements of
Internet-related resources such as Web sites; programming, technical
architecture development and systems integration to implement complex
information technology systems such as electronic commerce platforms; and
planning and executing online marketing strategies that build audiences and
develop brand awareness. In order to serve its global clients, AGENCY.COM
currently has offices in New York; Atlanta; Chicago; Dallas; Portland, Oregon;
San Francisco; Cambridge, Massachusetts; Woodbridge, New Jersey; London; Paris;
Amsterdam and Copenhagen. AGENCY.COM also has minority investments in companies
in Singapore, Korea and Miami.

    PRINCIPLES OF CONSOLIDATION

    The Consolidated Financial Statements include the accounts of all
majority-owned subsidiaries. All significant intercompany transactions have been
eliminated in consolidation.

    The Company's investments in less than 20% owned companies in which it does
not have the ability to exercise significant influence over operating and
financial policies are accounted for using the cost method. As of December 31,
2000, the Company had approximately a 19% investment in The EdgeMatrix PTE. LTD.
(formerly The Edge Consultants PTE. LTD.), approximately a 17% investment in
AGENCY.COM Korea, and approximately a 3.7% investment in UrbanBite, all of which
are accounted for under the cost method (see Note 6).

    USE OF ESTIMATES

    The preparation of financial statements in conformity with generally
accepted accounting principals applied in the United States requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

    REVENUE RECOGNITION

    Revenues are recognized for time and materials projects as services are
provided. Revenues from fixed-fee contracts are recognized as services are
provided upon the achievement of specified milestones. Revenue is recognized on
partially completed milestones in proportion to the costs incurred for that
milestone and only to the extent that an irrevocable right to the revenue
exists. Costs incurred under fixed-fee contracts are recognized as incurred
which generally is in the same period that revenue is recorded. Revenues are
recorded on partially completed contracts to the extent that an irrevocable
right to the revenue exists under each client contract. Revenue is only
recognized when persuasive evidence of an arrangement exists, services have been
rendered, the fees are fixed or determinable and collectibility is reasonably
assured. Unbilled charges represent labor costs incurred and estimated earnings,
production and other client reimbursable costs. Provisions for estimated losses
on

                                      F-8
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
uncompleted contracts are made in the period in which such losses are probable.
Amounts billed, which are not yet earned, are classified as deferred revenue in
the accompanying consolidated balance sheets.

    CASH AND CASH EQUIVALENTS

    The Company considers all highly liquid debt and equity instruments with an
original maturity of three months or less to be cash equivalents. Cash
equivalents include investments in money market funds and are stated at cost,
which approximates market value.

    CUSTOMER ADVANCES

    In connection with performing direct marketing consulting services for its
customers, the Company purchases advertising on Web sites on behalf of its
customers. The Company invoices its customers for the cost of media placements
and remits payments to the Web sites but does not assume any credit risk
associated with the transactions.

    The Company does not recognize any revenue or expenses associated with the
purchasing and reinvoicing of advertising placements in its statement of
operations. As of December 31, 1999 and 2000, the Company has received
approximately $4.4 million and $8.3 million, respectively, of cash advances from
its customers for the purchase of advertising on Web sites.

    PROPERTY AND EQUIPMENT

    Property and equipment is stated at cost, net of accumulated depreciation
and amortization. Property and equipment is depreciated on a straight-line basis
over their estimated useful lives of three to seven years. Leasehold
improvements and equipment held under capital leases are amortized utilizing the
straight-line method over the lesser of the estimated useful life of the asset
or the remaining term of the related lease.

    INTANGIBLE ASSETS

    Goodwill, which represents the excess of the purchase price over the fair
value of the net assets acquired, is included in intangible assets and is
presently being amortized over a period of seven years on a straight-line basis.
Customer base and workforce are being amortized over a period of five years and
three years, respectively, on a straight-line basis. The Company reviews its
intangible assets for impairment quarterly or whenever events or changes in
circumstances indicate that the carrying amount of the intangible asset exceeds
the fair value of the asset. If circumstances indicate that the carrying amount
of the intangible asset that the Company expects to hold and use may not be
recoverable, the Company will estimate the future cash flows expected to result
from the use of the asset and its eventual disposition. Future cash flows are
the future cash inflows expected to be generated by an asset less the future
cash outflows expected to be necessary to obtain those inflows. If the sum of
the expected future cash flows (undiscounted and without interest charges) is
less than the carrying amount of the asset, the Company will recognize an
impairment loss equal to the amount by which the carrying amount of the asset
exceeds the fair value of the asset. The fair value of the asset is the amount
at which the asset could be bought or sold in a current transaction between
willing parties or determined by calculating the present value of estimated
expected future cash flows using a discount rate commensurate with the risks
involved. Management has evaluated the carrying values and amortization periods
in the current period and has determined that no impairment currently exists.
These carrying

                                      F-9
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
values and amortization periods will be evaluated by management on a continuing
basis, and will be adjusted if the lives of the related intangible assets are
impaired.

    ACCOUNTING FOR LONG-LIVED ASSETS

    The Company follows the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed of." This statement establishes
financial accounting and reporting standards for the impairment of long-lived
assets, certain identifiable intangibles and goodwill related to those assets to
be held and used, and for long-lived assets and certain identifiable intangibles
to be disposed of. The Company reviews long-lived assets and certain
identifiable intangibles to be held and used for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset exceeds
the fair value of the asset. If other events or changes in circumstances
indicate that the carrying amount of an asset that the Company expects to hold
and use may not be recoverable, the company will estimate the future cash flows
expected to result from the use of the asset and its eventual disposition.

    INCOME TAXES

    The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes." This statement requires an asset and liability
approach for measuring deferred taxes based on temporary differences between the
financial statement and income tax bases of assets and liabilities existing at
each balance sheet date using enacted tax rates for the years in which the taxes
are expected to be paid or recovered. The effect on deferred tax assets or
liabilities of a change in tax rates is recognized in the period in which the
tax change occurs. Through December 31, 1998, the Company elected to file its
income tax returns using the cash basis of accounting. Subsequent to the year
ending December 31, 1998, the Company had elected to file its income tax returns
using the accrual basis of accounting.

    FOREIGN CURRENCY TRANSLATION

    All assets and liabilities of foreign subsidiaries are translated into U.S.
Dollars at fiscal year-end exchange rates. Income and expense items are
translated at average exchange rates prevailing during the fiscal year. The
resulting translation adjustments are recorded as a component of Stockholders'
Equity in the accompanying Consolidated Financial Statements. Gains or losses
resulting from foreign currency transactions are included in the accompanying
Consolidated Statements of Operations.

    FAIR VALUE OF FINANCIAL INSTRUMENTS

    The carrying amounts of cash and cash equivalents, certificate of deposits,
net accounts receivable, other receivables, due from related parties and
accounts payable and accrued expenses approximate fair value due to the
short-term maturity of these instruments. The carrying amounts of capital lease
obligations, including current portions, approximate fair value.

    BUSINESS CONCENTRATIONS AND CREDIT RISK

    Financial instruments, which subject the Company to concentrations of credit
risk, consist primarily of cash and cash equivalents and trade accounts
receivable. As of December 31, 2000, the Company

                                      F-10
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
maintained approximately $17.4 million of its cash and cash equivalents with
Omnicom Finance Inc. ("Omnicom Finance"), a wholly-owned subsidiary of Omnicom
Group Inc. ("Omnicom"), which is the largest shareholder of the Company. The
remainder of the Company's cash is invested with various other financial
institutions. The Company performs periodic evaluations of the relative credit
standing of these institutions. The Company's clients are primarily concentrated
in the United States and Europe. The Company performs ongoing credit
evaluations, generally does not require collateral, and establishes an allowance
for doubtful accounts based upon factors surrounding the credit risk of
customers, historical trends and other information.

    For the year ended December 31, 1998, 1 client accounted for 16% of total
revenues.

    For the year ended December 31, 1999, 1 client accounted for 11% of total
revenues.

    For the year ended December 31, 2000, no client accounted for more than 10%
of total revenues.

    As of December 31, 1999, 1 client accounted for 23% of total accounts
receivable and unbilled charges.

    As of December 31, 2000, 4 clients accounted for 46% of total accounts
receivable and unbilled charges.

    NET INCOME (LOSS) PER COMMON SHARE

    The Company computes net income (loss) per common share in accordance with
SFAS No. 128, "Earnings Per Share". Under the provisions of SFAS No. 128, basic
net income (loss) per common share ("Basic EPS") is computed by dividing net
income (loss) by the weighted average number of common shares outstanding.
Diluted net income (loss) per common share ("Diluted EPS") is computed by
dividing net income (loss) by the weighted average number of common shares and
dilutive common share equivalents then outstanding. SFAS No. 128 requires the
presentation of both Basic EPS and Diluted EPS on the face of the consolidated
statements of operations.

    Basic and Diluted EPS are the same for each of the three years ended
December 31, 2000, as Diluted EPS does not include the impact of stock options
and warrants then outstanding as the effect of their inclusion would be
antidilutive.

    STOCK-BASED COMPENSATION

    In 1998, the Company adopted the provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation," by continuing to apply the provisions of Accounting
Principles Board ("APB") No. 25, "Accounting for Stock Issued to Employees,"
while providing the necessary pro forma disclosures as if the fair value method
had been applied (Note 9).

    COMPREHENSIVE LOSS

    During 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income," which established standards for reporting and displaying comprehensive
income and its components in a

                                      F-11
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
financial statement that is displayed with the same prominence as other
financial statements. The components of comprehensive loss are as follows:

<TABLE>
<CAPTION>
                                                YEAR ENDED DECEMBER 31,
                                       -----------------------------------------
                                          1998           1999           2000
                                       -----------   ------------   ------------
<S>                                    <C>           <C>            <C>
Net loss.............................  $(2,480,980)  $(12,879,050)  $(14,685,281)
Foreign currency translation
  adjustment.........................       (9,308)      (161,968)       215,514
                                       -----------   ------------   ------------
Comprehensive loss...................  $(2,490,288)  $(13,041,018)  $(14,469,767)
                                       ===========   ============   ============
</TABLE>

    NEW ACCOUNTING PRONOUNCEMENTS

    In December 1999, the Securities and Exchange Commission ("SEC") released
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements," which provides guidance on the recognition, presentation and
disclosure of revenue in financial statements filed with the SEC. Subsequently,
the SEC released SAB 101B, which delayed the implementation date of SAB 101 for
registrants with fiscal years that begin between December 16, 1999 and
March 15, 2000. The Company was required to be in conformity with the provisions
of SAB 101, as amended by SAB 101B, no later than October 1, 2000. The adoption
of SAB 101, as amended by SAB 101B, did not have a material effect on the
Company's consolidated financial position, results of operations or cash flows.

    In July 1999, the Financial Accounting Standards Board ("FASB") approved
SFAS No. 137 "Accounting for Derivative Instruments and Hedging
Activities--Deferral of the Effective date of FASB Statement No. 133". SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities"
establishes accounting and reporting standards requiring that every derivative
instrument, including certain derivative instruments embedded in other
contracts, be recorded in the balance sheet as either an asset or liability
measured at its fair value. The statement also requires that changes in the
derivative's fair value be recognized in earnings unless specific hedge
accounting criteria are met. The adoption of SFAS No. 133 will not have a
material effect on the Company's Consolidated Financial Statements.

    In March 2000, the Financial Accounting Standards Board issued
Interpretation No. 44 (FIN. 44), "Accounting for Certain Transactions Involving
Stock Compensation, and Interpretation of APB Opinion No. 25". The FIN. 44 is
intended to clarify certain problems that have arisen in practice since the
issuance of APB No. 25, "Accounting for Stock Issued to Employees." The
effective date of the interpretation was July 1, 2000. The provisions of the
interpretation apply prospectively, but they will also cover certain events
occurring after December 15, 1998 and after January 12, 2000. The adoption of
FIN. 44 did not have a material adverse effect on the Company's current or
historical consolidated financial statements, but may affect future accounting
regarding stock option transactions.

    RECLASSIFICATIONS

    Certain reclassifications have been made to the prior years Consolidated
Financial Statements to conform to the current year presentation.

                                      F-12
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  ACQUISITIONS

    SPIRAL MEDIA INC.

    In July 1997, the Company purchased 51% of the outstanding shares of Spiral
Media Inc. ("Spiral Media"). The Company purchased the remaining portion of
outstanding shares in July 1998. The total consideration for all of the stock
acquired was approximately $6.2 million. This consideration was comprised of a
cash payment of $5.5 million, relinquishment of debt due from Spiral Media
stockholders totaling approximately $0.1 million and the issuance of 480,626
shares of the Company's common stock valued at $1.12 per share, which in
management's opinion was the fair market value of the common stock at the date
of issuance. This acquisition has been accounted for under the purchase method
of accounting and, accordingly, the purchase price has been allocated to the
tangible and intangible assets acquired and liabilities assumed on the basis of
their respective fair values on the respective acquisition dates. As a result of
this acquisition, the Company has recorded goodwill of approximately
$6.1 million, which is the cost in excess of net assets acquired and is being
amortized.

    ONLINE MAGIC LIMITED

    In October 1997, the Company purchased 42.5% of the outstanding shares of
Online Magic Limited ("Online Magic"), a United Kingdom company, which
represented the controlling interest in Online Magic. The outstanding shares
acquired were deemed to be a controlling interest, as after the investment, the
Company had the ability to direct or cause the direction of the management and
operating and financing policies of Online Magic. In May 1998 and July 1998, the
Company acquired all of the remaining outstanding shares of Online Magic through
two separate purchase agreements. The initial consideration paid was
approximately $2.2 million. The consideration was comprised of a cash payment of
approximately $1.6 million and the issuance of 498,434 shares of the Company's
common stock value at $1.12 per share, which in management's opinion was the
fair market value of the common stock at the date of issuance. This acquisition
has been accounted for under the purchase method of accounting and, accordingly,
the purchase price has been allocated to the tangible and intangible assets
acquired and liabilities assumed on the basis of their respective fair values on
the respective acquisition dates. As a result of this acquisition, the Company
recorded goodwill of approximately $1.9 million, which is the cost in excess of
net assets acquired. Furthermore, the purchase agreements called for certain
earn-out payments to former shareholders of Online Magic based upon the
achievement of targeted operating performance of Online Magic through
December 1999. In September 1999, the Company released 123,376 shares from
escrow and issued them to two of the former shareholders of Online Magic as part
of the earn-out payment. These shares were valued at $11.00, which was the
current fair market value of the Company's stock. The total value of the shares
of approximately $1.4 million was recorded as additional purchase price and is
reflected as additional goodwill in the accompanying consolidated financial
statements. In March 2000, the Company released the remaining 123,376 shares
from escrow to the same former shareholders of Online Magic as the remaining
earn-out payment. These shares were valued at $29.50, which was the then fair
market value of the Company's common stock at the date of release. The total
value of these shares of approximately $3.6 million was considered additional
purchase price and recorded as additional goodwill in the Company's consolidated
financial statement.

    KETCHUM ADVERTISING INC.

    In April 1998, the Company acquired certain assets and assumed certain
liabilities from Ketchum Advertising Inc. ("Ketchum"). Ketchum was a subsidiary
of Omnicom, which is a significant

                                      F-13
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  ACQUISITIONS (CONTINUED)
shareholder of the Company's common stock both directly and through a
wholly-owned subsidiary. In consideration for the net assets acquired, the
Company paid approximately $0.6 million in cash. This acquisition has been
accounted for under the purchase method of accounting and, accordingly, the
purchase price has been allocated to the tangible and intangible assets acquired
and liabilities assumed on the basis of their respective fair values on the
acquisition date. As a result of this acquisition, the Company has recorded
goodwill of approximately $0.6 million.

    THE PRIMARY GROUP

    In August 1998, the Company acquired certain assets from Web Partners ("The
Primary Group") and assumed certain liabilities. In consideration for the net
assets acquired, the Company paid approximately $50,000 in cash. This
acquisition has been accounted for under the purchase method of accounting and,
accordingly, the purchase price has been allocated to the tangible and
intangible assets acquired and liabilities assumed on the basis of their
respective fair values on the acquisition date. As a result of this acquisition,
the Company has recorded goodwill of approximately $50,000.

    INTERACTIVE SOLUTIONS INCORPORATED AND QUADRIS CONSULTING, INC.

    In April 1999, the Company acquired all of the issued and outstanding shares
of capital stock of Interactive Solutions Incorporated ("ISI") from the ISI
shareholders (including Communicade Inc. ("Communicade"), a wholly-owned
subsidiary of Omnicom) in exchange for an aggregate of 4,171,846 shares of the
Company's common stock and a warrant to purchase 3,071,248 shares of the
Company's common stock at a purchase price of $0.005 per share. Such warrant was
valued at $0.80 per share and the fair value of the Company's common stock on
the date of purchase was $1.23 per share, each as determined by an independent
third-party valuation. In December 2000, Communicade through a wholly-owned
subsidiary, exercised a portion of the warrant for 2,232,000 shares of the
Company's common stock and transferred the unexercised portions of the warrant
to two companies that are not affiliated with Omnicom, Communicade, or their
subsidiaries.

    Immediately, prior to the acquisition of ISI, ISI acquired all of the issued
and outstanding shares of capital stock of Quadris Consulting, Inc. ("Quadris")
from the Quadris shareholders in exchange for an aggregate of 1,869,528 shares
of ISI common stock. Prior to both acquisitions, Communicade sold 485,999.64
shares of ISI common stock to certain of the Company's shareholders for an
aggregate price of approximately $0.4 million.

    Outstanding stock options under the stock option plans of Quadris and ISI
were converted into 1,406,378 options to purchase the Company's common stock.
Included in these options were 557,978, 185,988 and 662,412 options which were
converted at exercise prices of $0.41, $0.45 and $1.21, respectively, which were
lower than the fair market value of the Company's common stock at the date of
grant, which was $1.23. Accordingly, the Company has recorded additional
purchase price of approximately $0.6 million for the difference between the
exercise price and the fair market value of the underlying common shares
relating to these options.

    As a result of this acquisition, the Company has recorded goodwill of
approximately $15.1 million, which is the cost, plus the net liabilities assumed
after the allocation to workforce and customer base of $1.0 million and
$2.6 million, respectively.

                                      F-14
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  ACQUISITIONS (CONTINUED)
    EAGLE RIVER INTERACTIVE INC.

    In April 1999, the Company acquired all of the issued and outstanding shares
of capital stock of Eagle River Interactive Inc. ("ERI") from Omnicom, ERI's
sole shareholder, in exchange for an aggregate of 3,659,548 shares of the
Company's common stock and a warrant to purchase 4,328,752 shares of the
Company's common stock at a purchase price of $0.005 per share. Such warrant was
valued at $0.80 per share and the fair value of the Company's common stock on
the date of purchase was $1.23 per share, each as determined by an independent
third-party valuation. In November 1999, Omnicom transferred a portion of this
warrant to purchase 1.4 million shares to a non-affiliated third party and in
December 2000, it transferred the remaining portion of the warrant to a
wholly-owned subsidiary of Communicade, which then exercised part of the warrant
for 2,232,000 shares of the Company's common stock and transferred the
unexercised portions of the warrant to two companies that are not affiliated
with Omnicom, Communicade or their subsidiaries. In addition, at this time,
Omnicom caused Communicade to transfer 13,322 shares of the Company's common
stock to certain participants of the ERI Key Executive Incentive Program in
settlement of all obligations due under the program. 80,690 shares were issued
to an executive of ERI in connection with his employment agreement. These shares
have been valued at $1.23 per share, the then fair market value of the Company's
common stock for a total value of approximately $0.1 million. Provided that the
employee remains in continuous service with the Company, one-third of the
restricted shares will automatically vest on each of the first three
anniversaries of the date of grant. If the employee retires or his employment is
involuntarily terminated prior to any of the first three anniversaries, the pro
rata portion of the number of restricted shares that would have vested as of
such termination date will vest. The Board of Directors has sole discretion to
increase the number of shares that will vest on retirement or involuntary
termination. The Company will amortize the fair value of the shares granted over
the three-year vesting period as compensation expense.

    As a result of this acquisition, the Company has recorded goodwill of
approximately $26.4 million which is the cost plus net liabilities assumed after
the allocation to workforce and customer base of $1.3 million and $3.2 million,
respectively.

    DIGITAL VISION COMMUNICATIONS INC.

    In May 1999, the Company purchased all of the issued and outstanding shares
of capital stock of Digital Vision Communications Inc. ("Digital Vision") for
approximately $1.1 million in cash. This acquisition has been accounted for
under the purchase method of accounting and, accordingly, the purchase price has
been allocated to the tangible and intangible assets acquired and liabilities
assumed on the basis of their respective fair values on the acquisition date.

    As a result of this acquisition, the Company has recorded goodwill of
approximately $1.4 million, which is the cost, plus the net liabilities assumed.

    TWINSPARK INTERACTIVE PEOPLE B.V.

    In August 1999, the Company purchased all of the issued and outstanding
shares of capital stock of Twinspark Interactive People B.V. ("Twinspark"), a
Dutch company, for $0.7 million in cash and 1,057,226 shares of the Company's
common stock valued at $11.00 per share, of which 1,047,226 shares were given to
the shareholders of Twinspark and 10,000 to former employees of Twinspark, for a
total aggregate purchase price of approximately $12.3 million. The Company also
granted 75,000 stock

                                      F-15
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  ACQUISITIONS (CONTINUED)
options to former employees of Twinspark at an exercise price equal to the then
fair market value of the Company's common stock. This acquisition has been
accounted for under the purchase method of accounting and, accordingly, the
purchase price has been allocated to the tangible and intangible assets acquired
and liabilities assumed on the basis of their respective fair values on the
acquisition date. As a result of this acquisition, the Company has recorded
goodwill of approximately $12.2 million, which is the cost, plus the net
liabilities assumed. Furthermore, the purchase agreement calls for certain
earn-out payments to the former shareholders of Twinspark based upon the
achievement of certain targeted operating results of Twinspark through
December 1999. In January 2001, the Company issued 85,000 additional shares to
the former shareholders of Twinspark in final settlement of the earn-out payment
obligation. This additional consideration of $318,750 will be recorded as
goodwill in January 2001.

    PICTORIS INTERACTIVE SA

    In October 1999, the Company consummated its investment of 5% of the
outstanding equity in Pictoris Interactive SA ("Pictoris") from its existing
shareholders for $0.5 million. In January 2000, the Company exercised its option
to purchase the remaining 95% of Pictoris. The total consideration for the
acquisition was approximately $12.4 million consisting of $8.7 million in cash
and 78,954 shares of the Company's common stock valued at $46.12 per share. As a
result of this acquisition, the Company recorded goodwill of approximately
$13.3 million, which is cost plus the net liabilities assumed.

    INTERACTIVE TRAFFIC, INC.

    In October 1999, the Company purchased all of the issued and outstanding
shares of capital stock of Interactive Traffic, Inc. ("I-traffic") for
approximately $3.0 million in cash at the closing, a $1.0 million payment in
January 2000, 469,320 shares of the Company's common stock valued at $11.00 per
share, the assumption of options to purchase 160,680 shares of the Company's
common stock at an average exercise price of $2.54 per share, the issuance of
newly-granted options to purchase 60,000 shares of the Company's common stock at
an exercise price of $2.50 per share, which options were valued at less than the
fair market value of the Company's common stock on the date of grant, valued at
approximately $1.5 million, and performance-based payments of $1.8 million paid
in 2000 for a total aggregate purchase price of approximately $12.5 million. As
a result of this acquisition, through December 31, 2000, the Company has
recorded goodwill of approximately $13.3 million, which is the cost, plus the
net liabilities assumed. In addition, in January 2001, the total consideration
was adjusted for approximately 307,000 shares which were issued in satisfaction
of the achievement of the earn-out. 62.5% of such payment was distributed to the
former shareholders of I-traffic, the balance is held in escrow pursuant to the
terms of the escrow agreement. This acquisition has been accounted for under the
purchase method of accounting and, accordingly, the purchase price has been
allocated to the tangible and intangible assets acquired and liabilities assumed
on the basis of their respective fair value on the acquisition date.

    VISIONIK A/S

    In November 1999, the Company purchased all of the issued and outstanding
shares of capital stock of Visionik A/S ("Visionik"), a Danish corporation, for
$0.5 million in cash and 572,000 shares of the Company's common stock valued at
$11.00 per share for a total aggregate purchase price of approximately
$6.8 million. This acquisition has been accounted for under the purchase method
of

                                      F-16
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  ACQUISITIONS (CONTINUED)
accounting and, accordingly, the purchase price has been allocated to the
tangible and intangible assets acquired and liabilities assumed on the basis of
their respective fair values on the acquisition date. As a result of this
acquisition, the Company has recorded goodwill of approximately $7.7 million,
which is the cost in excess of the net assets acquired.

    SPEEDMOUNT SERVICES LIMITED

    In October 2000, the Company acquired all of the issued and outstanding
shares of Speedmount Services Limited ("Speedmount"), a United Kingdom company,
for consideration of approximately $0.7 million, which was comprised of 48,832
shares of the Company's common stock valued at $13.56 per share, based upon the
then fair market value. As a result of this acquisition, the Company recorded
goodwill of approximately $0.9 million.

    The acquisitions described were valued based on management's estimate of the
fair value of the net assets acquired at the date of acquisition. Costs in
excess of net assets acquired were recorded as intangible assets. Presented
below is the allocation of the purchase price among assets acquired, liabilities
assumed and intangible assets.

<TABLE>
<CAPTION>
                             SPIRAL MEDIA   ONLINE MAGIC   KETCHUM    THE PRIMARY GROUP
                             ------------   ------------   --------   -----------------
                                                   (IN THOUSANDS)
<S>                          <C>            <C>            <C>        <C>
Accounts receivable........     $  402         $ 1,080       $ --            $--
Fixed assets...............        202             345         --              2
Other assets...............        132             797         --             --
Intangible assets..........      6,111           6,870        643             51
Current liabilities........       (615)         (1,313)        --             --
Long-term liabilities......        (66)           (585)        --             --
                                ------         -------       ----            ---
  Total purchase price.....     $6,166         $ 7,194       $643            $53
                                ------         -------       ----            ---
</TABLE>

<TABLE>
<CAPTION>
                                      ISI AND
                                      QUADRIS      ERI      DIGITAL VISION   TWINSPARK
                                      --------   --------   --------------   ---------
                                                       (IN THOUSANDS)
<S>                                   <C>        <C>        <C>              <C>
Accounts receivable.................  $   811    $    521       $  159        $ 1,040
Fixed assets........................    1,026       2,132           26            511
Other assets........................    2,648       2,755           --            154
Intangible assets...................   18,784      30,951        1,435         12,241
Current liabilities.................   (5,159)    (10,872)        (319)        (1,565)
Long-term liabilities...............   (9,905)    (17,407)        (202)           (52)
                                      -------    --------       ------        -------
  Total purchase price..............  $ 8,205    $  8,080       $1,099        $12,329
                                      -------    --------       ------        -------
</TABLE>

                                      F-17
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.  ACQUISITIONS (CONTINUED)

<TABLE>
<CAPTION>
                                        PICTORIS   I-TRAFFIC   VISIONIK   SPEEDMOUNT
                                        --------   ---------   --------   ----------
                                                       (IN THOUSANDS)
<S>                                     <C>        <C>         <C>        <C>
Accounts receivable...................  $ 1,273     $ 1,369    $   686       $ --
Fixed assets..........................       --         469         46         --
Other assets..........................      178       1,713        670         --
Intangible assets.....................   13,272      13,316      7,726        855
Current liabilities...................   (2,240)     (1,810)    (2,317)        --
Long-term liabilities.................     (123)     (2,585)       (20)        --
                                        -------     -------    -------       ----
  Total purchase price................  $12,360     $12,472    $ 6,791       $855
                                        -------     -------    -------       ----
</TABLE>

    PRO FORMA RESULTS OF OPERATIONS (UNAUDITED)

    The following unaudited pro forma consolidated statement of operations data
for the year ended December 31, 1998 give effect to the acquisitions of Ketchum,
Primary Group, ISI and Quadris, ERI, Digital Vision, Twinspark, I-traffic and
Visionik as if each of these acquisitions had occurred on January 1, 1998. The
pro forma consolidated statement of operations data for the year ended
December 31, 1999 give effect to the acquisition of ISI, ERI, Digital Vision,
Twinspark, I-traffic, Visionik and Pictoris as if these acquisitions had
occurred on January 1, 1999. The proforma results were not materially different
actual results for year ended December 31, 2000. The proforma amounts do not
include the acquisition of Speedmount as the effect would be immaterial.

    All of the following unaudited pro forma consolidated results of operations
give effect to purchase accounting adjustments. These pro forma results have
been prepared for comparative purposes only and do not purport to be indicative
of what operating results would have been had the acquisitions actually taken
place on January 1, 1998 and January 1, 1999 and may not be indicative of future
operating results.

<TABLE>
<CAPTION>
                                  YEAR ENDED          YEAR ENDED          YEAR ENDED
PRO FORMA:                     DECEMBER 31, 1998   DECEMBER 31, 1999   DECEMBER 31, 2000
----------                     -----------------   -----------------   -----------------
                                                    (IN THOUSANDS)
<S>                            <C>                 <C>                 <C>
Revenues.....................       $76,130            $109,154            $202,090
Net loss.....................       (21,960)            (27,113)            (14,686)
Basic and diluted net loss
  per share..................         (0.82)              (0.92)              (0.41)
</TABLE>

                                      F-18
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.  RELATED PARTY TRANSACTIONS

    On April 28, 1999, the Company entered into a shareholder's agreement (the
"Agreement") with Omnicom. The Agreement nullified and superseded a previous
shareholder's agreement dated September 12, 1996. The Agreement provided for a
line of credit for working capital purposes of not less than $10.0 million at
the same interest rate charged by Omnicom to its subsidiaries under the Omnicom
cash management system, which was approximately 5.89%. Borrowings were secured
by a first priority lien on all assets. In addition, the Agreement provided for
additional financing to the Company for "new media" acquisitions at the same
interest rate charged by Omnicom to its subsidiaries under the Omnicom cash
management system. Interest on any such loans was to be paid quarterly on the
then outstanding principal balance. Principal was to be repaid quarterly in
equal installments over a five-to-ten-year period.

    In November 1999, the Company entered into a new $85 million credit facility
with Omnicom Finance, a wholly-owned subsidiary of Omnicom, which replaced the
Company's revolving credit lines and consolidates all of the Company's
previously outstanding indebtedness due to Omnicom. The credit facility provides
for a $25 million term loan, a $54 million revolving credit line and a
$6.0 million lease credit support facility. As required by the credit facility
the Company had to repay the amounts borrowed under the term loan portion of the
new credit facility. In December 1999, the Company repaid the term loan and all
amounts due under the revolving credit line with proceeds from the Company's
initial public offering. The remaining amounts if any will be due in full on
September 30, 2001. Currently the Company has utilized $5.0 million of the
credit support facility. This credit facility bears interest at the rate of
Omnicom's commercial paper rate plus 1.25% and terminates in September 2001. Any
amounts borrowed under the facility will be due in full on September 30, 2001.

    At December 31, 1999 and 2000, there were no borrowings outstanding on the
revolving credit line. Related interest expense under the financing arrangements
was approximately $0.4 million, $2.9 million and $0, respectively, for the three
years ended December 31, 2000.

    In December 2000, Omnicom transferred its warrants to purchase 2,928,752
shares of our common stock and Communicade transferred its warrants to purchase
3,071,428 shares of our common stock to a wholly-owned subsidiary of
Communicade, which then exercised part of the warrant for 2,232,000 shares of
our common stock and transferred the remaining unexercised portions of the
warrant to two companies that are not affiliated with Omnicom, Communicade, or
their subsidiaries.

    In December 2000, the Company secured loans in aggregate amounts of
$5.5 million that were made to certain officers by a third party bank that is
secured by cash of approximately $5.0 million. In return for this transaction,
the officers indemnified the Company and pledged to the Company approximately
1.6 million shares of common stock they held in the Company.

    Included in revenue for the year ended December 31, 1999 and 2000 is
approximately $0.5 million and $1.7 million, respectively, related to services
provided by the Company to its largest shareholder, Omnicom. There were no such
revenues for the year ended December 31, 1998. Also included in revenue for the
year ended December 31, 2000 was approximately $0.9 million and $0.5 million
related to services provided by the Company to Urban Desires Inc., a company
owned by two of the Company's primary shareholders and Monitor Marketspace, a
company owned by one of the Company's directors, respectively. At December 31,
1999 and 2000, there was approximately $0.5 million and $3.1 million included in
the Company's unbilled charges and due from related parties balances in the
accompanying Consolidated Financial Statements related to this revenue.

                                      F-19
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.  RELATED PARTY TRANSACTIONS (CONTINUED)
DUE FROM/TO RELATED PARTIES

    Due from related parties consists of the following:

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                1999       2000
                                                              --------   --------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Urban Desires Inc...........................................    $255       $150
AGENCY.COM Korea............................................      --         93
EdgeMatrix..................................................      --         86
Employee Loan...............................................      --         85
Other.......................................................      --         71
                                                                ----       ----
Due from related parties....................................    $255       $485
                                                                ====       ====
</TABLE>

    At December 31, 1999, due to related parties primarily consisted of
approximately $2,128 due to shareholders and former stockholders. There were no
amounts due to related parties at December 31, 2000.

4.  PROPERTY AND EQUIPMENT

    Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                              DECEMBER 31,
                                                           -------------------
                                                             1999       2000
                                                           --------   --------
                                                             (IN THOUSANDS)
<S>                                                        <C>        <C>
Equipment and furniture under capital leases.............  $ 3,113    $  4,866
Equipment................................................    2,098       5,022
Computer equipment.......................................   10,682      14,025
Furniture and fixtures...................................    2,954       3,497
Leasehold improvements...................................    9,032      15,616
                                                           -------    --------
Total property and equipment.............................   27,879      43,026
Less: accumulated depreciation and amortization..........   (9,325)    (14,726)
                                                           -------    --------
Property and equipment, net..............................  $18,554    $ 28,300
                                                           =======    ========
</TABLE>

    Depreciation and amortization expense was $1,141, $4,627 and $7,116
respectively, for the three years ended December 31, 2000.

                                      F-20
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5.  INTANGIBLE ASSETS

    Intangible assets consist of the following:

<TABLE>
<CAPTION>
                                                              DECEMBER 31,
                                                           -------------------
                                                             1999       2000
                                                           --------   --------
                                                             (IN THOUSANDS)
                                                           -------------------
<S>                                                        <C>        <C>
Goodwill.................................................  $85,710    $106,057
Customer base............................................    5,840       5,840
Workforce................................................    2,328       2,328
Trademark................................................      115         115
                                                           -------    --------
Gross intangible assets..................................   93,993     114,340
Less: accumulated amortization...........................   (8,749)    (26,179)
                                                           -------    --------
Intangible assets, net...................................  $85,244    $ 88,161
                                                           =======    ========
</TABLE>

    Amortization expense was $893, $7,783 and $17,243 respectively, for the
three years ended December 31, 2000.

6.  INVESTMENTS AND OTHER ASSETS

    THE EDGEMATRIX PTE. LTD.

    In December 1998, the Company entered into an agreement to acquire up to 60%
of The EdgeMatrix PTE. LTD. ("EdgeMatrix") (formerly The Edge Consultants
PTE. LTD.) in a staggered transaction. In December 1998, under this agreement,
the Company acquired 12% of EdgeMatrix's outstanding shares and in July 1999,
increased the investment by an additional 18%. The total cash consideration for
the 30% investment was $3.1 million. Of the $3.1 million, $2.2 million of the
Company's investment in EdgeMatrix represented costs in excess of 30% of
EdgeMatrix's net assets. In accordance with the equity method of accounting,
these costs in excess of the Company's total investment have been recorded as
goodwill in the accompanying financial statements and are being amortized over a
period of seven years. In November 2000, EdgeMatrix entered into a
recapitalization agreement introducing new investors to EdgeMatrix. As a result
of this recapitalization, the Company's ownership of EdgeMatrix was partially
diluted. In December 2000, the Company disposed of a portion of the investment
for $1.7 million. The proceeds were offset against the Company's investment in
EdgeMatrix and the previously recorded goodwill.

    During 2000, the Company entered into joint venture agreements with
QUAXAR.COM, a company located in Miami, FL and AGENCY.COM Korea, a company based
in Korea. In addition, in October 2000, the Company entered into a subscription
agreement with Botticelli Investments (Cayman), L.P. ("Botticelli"). Botticelli
is a limited partnership that invests in Israeli based technology companies.
Under this agreement, the Company has committed to investing $5.0 million,
subject to capital calls being made by Botticelli. As of December 31, 2000,
approximately $0.9 million has been invested in Botticelli. Botticelli is a
partnership founded by Omnicom and others.

                                      F-21
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES

    Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                            -------------------
                                                              1999       2000
                                                            --------   --------
                                                              (IN THOUSANDS)
<S>                                                         <C>        <C>
Accounts payable..........................................  $ 6,203    $ 9,067
Accrued expenses..........................................   11,872     19,195
                                                            -------    -------
Accounts payable and accrued expenses, net................  $18,075    $28,262
                                                            =======    =======
</TABLE>

8.  INCOME TAXES

    Loss before income taxes and minority interest and the (benefit
from)/provision for taxes on loss consisted of the following:

<TABLE>
<CAPTION>
                                                     YEAR ENDED DECEMBER 31,
                                                  ------------------------------
                                                    1998       1999       2000
                                                  --------   --------   --------
                                                          (IN THOUSANDS)
<S>                                               <C>        <C>        <C>
Loss before income taxes and minority interest:
  Domestic......................................  $(3,761)   $(11,983)  $(12,135)
  International.................................      349        (701)    (5,320)
                                                  -------    --------   --------
                                                  $(3,412)   $(12,684)  $(17,455)
                                                  =======    ========   ========
(Benefit from)/provision for taxes on loss:
  Current-
    Federal.....................................  $   161    $   (205)  $  3,684
    State and local.............................      105         (49)     1,205
    International...............................      122         213        557
  Deferred-
    Federal.....................................     (972)     (2,283)    (2,796)
    State and local.............................     (629)       (714)    (1,087)
    International...............................       --          --     (2,310)
    Valuation Allowance.........................       --       3,284     (2,022)
                                                  -------    --------   --------
                                                  $(1,213)   $    246   $ (2,769)
                                                  =======    ========   ========
</TABLE>

                                      F-22
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8.  INCOME TAXES (CONTINUED)
    A reconciliation of the difference between the statutory U.S. Federal Income
Tax and the Company's tax (benefit)/provision is as follows:

<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31,
                                                    ------------------------------
                                                      1998       1999       2000
                                                    --------   --------   --------
                                                            (IN THOUSANDS)
<S>                                                 <C>        <C>        <C>
Statutory federal income taxes (benefit)..........  $(1,194)   $(4,439)   $(6,109)
State and local taxes on income, net of federal
  income tax benefit..............................     (340)        33         13
Goodwill amortization.............................      286      1,272      4,979
Nondeductible expense.............................       30         96        184
International operations..........................       --         --        109
Other.............................................        5         --         77
Valuation allowance...............................       --      3,284     (2,022)
                                                    -------    -------    -------
(Benefit from)/provision for income taxes.........  $(1,213)   $   246    $(2,769)
                                                    =======    =======    =======
</TABLE>

    The tax effects of temporary differences that give rise to a significant
portion of the deferred income taxes are as follows:

<TABLE>
<CAPTION>
                                                                YEAR ENDED
                                                               DECEMBER 31,
                                                            -------------------
                                                              1999       2000
                                                            --------   --------
<S>                                                         <C>        <C>
Current deferred income tax assets (liabilities) net:
  Cash to accrual adjustments.............................  $  (182)   $(1,044)
  Restructure charges/write-offs..........................       --      2,965
  Allowance for doubtful accounts and other non-deductible
    accruals..............................................      611        793
  Goodwill amortization...................................       --      1,005
  Other...................................................       --         45
Noncurrent deferred tax asset (liabilities), net:
  Cash to accrual adjustments.............................     (364)    (2,083)
  Net operating loss......................................    3,284      5,160
  Other...................................................       --       (263)
  Valuation allowance.....................................   (3,284)    (1,262)
                                                            -------    -------
    Total deferred income taxes, net......................  $    65    $ 5,316
                                                            =======    =======
</TABLE>

    Deferred income taxes are provided for the temporary difference between the
financial reporting basis and tax basis of the Company's assets and liabilities.
Deferred tax assets result principally from recording certain expenses in the
financial statements, which are not currently deductible for tax purposes, and
differences between the tax and book basis of assets and liabilities recorded in
connection with the acquisitions. Deferred tax liabilities result principally
from expenses which are currently deductible for tax purposes, but have not yet
been expensed in the financial statements.

                                      F-23
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8.  INCOME TAXES (CONTINUED)
    Certain of the Company's international subsidiaries generated tax loss
carryforwards for local tax purposes during the year. These losses expire at
various dates over the next several years. A valuation allowance has been
provided against the deferred tax assets relating to certain of these tax loss
carryforwards.

9.  STOCKHOLDERS' EQUITY

COMMON SHARES

    In August 1999, the certificate of incorporation was amended to increase the
number of authorized shares of common stock, $0.001 par value, to 200,000,000.

INITIAL PUBLIC OFFERING

    On December 13, 1999, the Company closed its initial public offering (the
"Offering") and sold an aggregate of 6,785,000 shares (including 88,000 shares
subject to the underwriters' overallotment option) of the Company's common stock
to the public. All of the shares of common stock sold in the Offering were sold
by the Company. Net proceeds to the Company were approximately $157.6 million,
after deducting underwriting discounts and commissions and expenses payable by
the Company in connection with the Offering. The Company used a portion of the
net proceeds from the Offering to repay all outstanding amounts owed by the
Company to Omnicom under the lines of credit provided by Omnicom.

STOCK SPLITS

    On July 15, 1998, the Board of Directors authorized a 1.8 for 1 stock split
of the Company's common stock. In June 1999, the Board of Directors authorized a
2 for 1 stock split of the Company's common stock. All share and per-share
amounts in the accompanying consolidated financial statements and footnotes have
been restated to give effect to these stock splits.

                                      F-24
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.  STOCKHOLDERS' EQUITY (CONTINUED)
STOCK OPTIONS

    A summary of stock option activity for the 1996 Plan and 1997 Plan is as
follows:

<TABLE>
<CAPTION>
                                                          1996 PLAN                   1997 PLAN
                                                  -------------------------   -------------------------
                                                                WEIGHTED                    WEIGHTED
                                                                AVERAGE                     AVERAGE
                                                   SHARES    EXERCISE PRICE    SHARES    EXERCISE PRICE
                                                  --------   --------------   --------   --------------
<S>                                               <C>        <C>              <C>        <C>
Balance at January 1, 1998......................   309,888        0.96         332,730         1.12
Granted.........................................    96,030        1.12         148,560         1.12
Exercised.......................................        --          --              --           --
Canceled........................................   (92,520)       0.99         (20,000)        1.12
                                                  --------        ----        --------        -----
Balance at December 31, 1998....................   313,398        1.00         461,290         1.12
Granted.........................................        --          --          50,846         1.23
Exercised.......................................  (175,710)       1.01        (144,594)        1.23
Canceled........................................    (9,270)       1.12              --           --
Transferred to the 1999 Plan....................  (128,418)       0.97        (367,542)        1.13
                                                  --------        ----        --------        -----
Balance at December 31, 1999....................        --        $ --              --        $  --
                                                  ========        ====        ========        =====
</TABLE>

AGENCY.COM 1999 PLAN

    On February 22, 1999, the Company's Board of Directors adopted and the
Company's shareholders approved the 1999 Stock Option/Stock Issuance Plan (the
"1999 Plan"). The 1999 Plan is divided into the following three separate equity
programs:

    a)  Discretionary Option Grant Program under which eligible persons may, at
       the discretion of the Plan Administrator, be granted options to purchase
       shares of common stock.

    b)  Stock Issuance Programs under which eligible persons may, at the
       discretion of the Plan Administrator, be issued shares of common stock
       directly, either through the immediate purchase of such shares or as a
       bonus for services rendered.

    c)  Automatic Option Grant Program under which eligible non-employee Board
       members shall automatically receive options at periodic intervals to
       purchase shares of common stock.

    The AGENCY.COM 1999 Plan is the successor program to the 1996 Plan and 1997
Plan. All outstanding options under the 1996 Plan and 1997 Plan were transferred
to the AGENCY.COM 1999 Plan. The transferred options will continue to be
governed by their existing terms. Except as otherwise noted, the transferred
options have substantially the same terms as those for grants to be made under
the discretionary option grant program of the AGENCY.COM 1999 Plan.

    9,676,178 shares of the Company's common stock have been authorized for
issuance under the AGENCY.COM 1999 Plan, as amended. This share reserve consists
of the number of shares carried over from the 1996 and 1997 Plans plus an
additional increase of 8,478,266 shares. The share reserve will automatically
increase on the first trading day in January each year, by an amount equal to 3%
of the total number of shares of common stock outstanding on the last trading
day of the prior year, but in no event will this annual increase exceed
1,500,000 shares. As such, the share reserve was increased

                                      F-25
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.  STOCKHOLDERS' EQUITY (CONTINUED)
on the first day of trading in January 2000 by 1,045,489 shares which resulted
in a total of 10,721,667 shares authorized for issuance. In addition, no
participant in the AGENCY.COM 1999 Plan may be granted stock options, separately
exercisable stock appreciation rights or direct stock issuances for more than
1,100,000 shares of common stock in total in any calendar year. Of the 9,676,178
and 10,721,667 shares authorized for issuance, 5,446,663 and 2,728,007 remained
available for issuance at December 31, 1999 and 2000, respectively.

I-TRAFFIC 1999 PLAN

    In July 1999, I-traffic adopted the I-traffic 1999 Stock Incentive Plan (the
"I-traffic 1999 Plan") under which I-traffic issued awards including shares,
incentive stock or non-qualified stock options. The awards, other than incentive
stock options, were granted to the I-traffic's directors, employees and
consultants by I-traffic. Incentive stock options were only granted to employees
of I-traffic. The maximum aggregate number of shares, which could have been
issued pursuant to all awards, was 200,000.

    In accordance with the I-traffic 1999 Plan, all outstanding awards issued
became fully vested and exercisable upon the acquisition of I-traffic by the
Company. Upon the acquisition of I-traffic by AGENCY.COM, all options under the
I-traffic 1999 Plan converted to options to acquire AGENCY.COM shares.

ISI 1996 PLAN

    The Interactive Solutions Incorporated 1996 Stock Option and Incentive Plan
(the "ISI 1996 Plan"), provided for the granting of stock options to its
employees. Pursuant to the ISI 1996 Plan, an aggregate of 500,000 shares of
common stock was reserved for issuance. Under the ISI 1996 Plan, the optionees
received from ISI options to purchase shares in ISI. Upon acquisition of ISI by
AGENCY.COM, all options that were issued by ISI were under the ISI 1996 Plan
were converted to options to acquire AGENCY.COM shares.

QUADRIS 1998 PLAN

    Quadris had a 1998 Stock Option and Incentive Plan (the "Quadris 1998
Plan"), that provided for the granting of 1,500,000 of options to employees of
Quadris. These options which were granted by Quadris gave the optionee the right
to purchase common stock of Quadris. Upon the acquisition of Interactive
Solutions by AGENCY.COM, all options under the Quadris 1998 Plan converted to
options to acquire AGENCY.COM shares.

                                      F-26
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.  STOCKHOLDERS' EQUITY (CONTINUED)
    A summary of stock option activity for the AGENCY.COM 1999 Plan, the Quadris
1998 Plan, the ISI 1996 Plan and the I-traffic 1999 Plan discussed above is as
follows:

<TABLE>
<CAPTION>
                                                                                          ALL ACTIVE PLANS
                                                                                        ---------------------
                                                                                                     WEIGHTED
                                                                                                     AVERAGE
                                        AGENCY.COM    QUADRIS      ISI      I-TRAFFIC                EXERCISE
                                          SHARES       SHARES     SHARES     SHARES       SHARES      PRICE
                                        -----------   --------   --------   ---------   ----------   --------
<S>                                     <C>           <C>        <C>        <C>         <C>          <C>
Balance at December 31, 1998..........          --     745,730    657,082         --     1,402,812    $ 0.79
Granted...............................   4,604,283       3,518      5,326    161,499     4,774,626      6.24
Exercised.............................      (9,300)   (131,715)  (175,179)    (1,970)     (318,164)     5.23
Canceled..............................    (374,768)    (15,599)   (16,713)        --      (407,080)     5.88
Transferred from the 1996 and 1997
  Plans...............................     495,960          --         --         --       495,960      1.09
                                        ----------    --------   --------    -------    ----------    ------
Balance at December 31, 1999..........   4,716,175     601,934    470,516    159,529     5,948,154    $ 4.75
Granted...............................   4,987,756          --         --         --     4,987,756     21.86
Exercised.............................    (179,966)   (118,815)  (369,700)   (69,890)     (738,371)     1.51
Canceled..............................  (1,223,611)     (8,177)    (3,108)    (5,762)   (1,240,658)    20.05
                                        ----------    --------   --------    -------    ----------    ------
Balance at December 31, 2000..........   8,300,354     474,942     97,708     83,877     8,956,881    $12.50
                                        ==========    ========   ========    =======    ==========    ======
</TABLE>

    The following table summarizes information on stock options outstanding and
exercisable under the AGENCY.COM 1999 Plan, the Quadris 1998 Plan, the ISI 1996
Plan and the I-traffic 1999 Plan at December 31, 2000:

<TABLE>
<CAPTION>
                                               OPTIONS OUTSTANDING                OPTIONS EXERCISABLE
                                      --------------------------------------   --------------------------
                                                  WEIGHTED
                                                   AVERAGE       WEIGHTED                     WEIGHTED
                                                  REMAINING      AVERAGE                      AVERAGE
EXERCISE PRICE RANGE                   NUMBER       LIFE      EXERCISE PRICE    NUMBER     EXERCISE PRICE
--------------------                  ---------   ---------   --------------   ---------   --------------
<S>                                   <C>         <C>         <C>              <C>         <C>
$ 0.41-$ 0.45.......................    474,942      8.0          $ 0.42         240,608       $ 0.43
$ 0.86-$ 1.23.......................  2,433,253      7.8          $ 1.20       1,183,021       $ 1.18
$ 2.51-$ 3.41.......................    192,397      8.3          $ 3.00         171,062       $ 2.97
$ 3.88-$ 5.80.......................    226,795      8.4          $ 4.07         136,755       $ 4.08
$ 5.81-$ 8.63.......................  1,281,044      8.9          $ 7.81         419,213       $ 8.20
$ 8.75-$13.13.......................    348,833      9.3          $10.52          52,890       $ 9.45
$13.56-$20.31.......................  1,205,720      9.5          $17.65             450       $19.55
$20.38-$29.25.......................  2,563,161      9.0          $24.71         324,950       $26.07
$30.88-$44.00.......................    182,736      7.6          $35.91          52,400       $32.51
$51.00-$51.00.......................     48,000      9.0          $51.00          15,984       $51.00
                                      ---------      ---          ------       ---------       ------
$ 0.41-$51.00.......................  8,956,881      8.6          $12.50       2,597,333       $ 6.74
                                      =========      ===          ======       =========       ======
</TABLE>

    The Company accounts for the stock option plans in accordance with APB
No. 25, under which no compensation cost has been recognized for stock options
granted with an exercise price at or above the prevailing market price on the
date of grant. Had compensation for the stock option plans been

                                      F-27
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9.  STOCKHOLDERS' EQUITY (CONTINUED)
determined consistent with the provisions of SFAS No. 123, the effect on the
Company's net (loss) and basic and diluted net (loss) per common share would
have been the following:

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                                         ------------------------
                                                           1999           2000
                                                         ---------      ---------
                                                         (IN THOUSANDS EXCEPT PER
                                                               SHARE DATA)
<S>                                                      <C>            <C>
Net loss, as reported..................................  $(12,879)      $(14,686)
Net loss, pro forma....................................   (17,754)       (34,819)
Basic and diluted loss per share, as reported..........     (0.53)         (0.41)
Basic and diluted loss per share, pro forma............     (0.72)         (0.98)
</TABLE>

    The fair value of each option grant has been estimated on the date of grant
using the Black-Scholes option-pricing model with the following weighted average
assumptions:

<TABLE>
<CAPTION>
                                                  YEAR ENDED DECEMBER 31,
                                              --------------------------------
                                                    1999             2000
                                              ----------------   -------------
<S>                                           <C>                <C>
Expected option lives.......................           5 years         4 years
Risk-free interest rates....................       5.00%-6.69%     4.88%-6.55%
Expected volatility.........................            73.00%          93.00%
Dividend yield..............................                0%              0%
Fair value..................................      $1.23-$26.00    $3.00-$42.25
</TABLE>

                                      F-28
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10.  GEOGRAPHIC REPORTING

    The Company began operations outside of the United States during 1997. A
summary of the Company's operations by geographical area as of December 31,
1998, 1999 and 2000 and for the years ended is presented below:

<TABLE>
<CAPTION>
                                                   UNITED STATES   INTERNATIONAL   CONSOLIDATED
                                                   -------------   -------------   ------------
                                                                  (IN THOUSANDS)
<S>                                                <C>             <C>             <C>
As of and for the year ended December 31, 1998:
  Revenues.......................................    $ 18,936         $ 7,516        $ 26,452
  (Loss)/income from operations..................      (3,158)            106          (3,052)
  Net loss.......................................      (2,326)           (155)         (2,481)
  Long-lived assets..............................      11,646             397          12,043
  Current assets.................................       6,460           1,648           8,108
  Investments and other assets...................       1,945               5           1,950
As of and for the year ended December 31, 1999:
  Revenues.......................................    $ 68,541         $19,245        $ 87,786
  (Loss)/income from operations..................      (9,387)           (441)         (9,822)
  Net loss.......................................     (12,417)           (462)        (12,879)
  Long-lived assets..............................     102,337           1,461         103,798
  Current assets.................................     111,296           8,684         119,980
  Investments and other assets...................       1,749             817           2,566
As of and for the year ended December 31, 2000:
  Revenues.......................................    $154,404         $47,686        $202,090
  Loss from operations...........................     (15,550)         (5,152)        (20,702)
  Net loss.......................................      (8,808)         (5,878)        (14,686)
  Long-lived assets..............................     118,583           2,364         120,946
  Current assets.................................     120,789           4,623         125,412
  Investments and other assets...................       3,656             566           4,222
</TABLE>

11.  COMMITMENTS AND CONTINGENCIES

    OPERATING LEASES

    As of December 31, 1999 and 2000, respectively, the Company was committed
under operating leases, principally for office space and equipment, expiring
through 2014. Certain leases are subject to rent reviews and require payment of
expenses under immaterial escalation clauses. Rent expense was approximately
$0.7 million, $4.7 million and $9.6 million, respectively, for the three years
ended

                                      F-29
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11.  COMMITMENTS AND CONTINGENCIES (CONTINUED)
December 31, 2000. Future minimum base rents under terms of noncancellable
operating leases are as follows:

<TABLE>
<CAPTION>
                                   OPERATING                      FUTURE
                                     LEASE        SUBLEASE       MINIMUM
YEAR ENDING DECEMBER 31             PAYMENTS       INCOME        PAYMENTS
-----------------------           ------------   -----------   ------------
<S>                               <C>            <C>           <C>
2001............................  $ 14,439,726   $  (531,192)  $ 13,908,534
2002............................    14,665,410      (419,040)    14,246,370
2003............................    14,599,599      (362,964)    14,236,635
2004............................    12,552,868      (362,964)    12,189,904
2005............................    11,833,271            --     11,833,271
Thereafter......................    63,436,919            --     63,436,919
                                  ------------   -----------   ------------
  Total.........................  $131,527,793   $(1,676,160)  $129,851,633
                                  ============   ===========   ============
</TABLE>

    EMPLOYMENT AGREEMENTS

    The Company has employment agreements and arrangements with its executive
officers and certain management personnel. The agreements generally continue
until terminated by the executive or the Company, and provide for severance
payments under certain circumstances. The majority of the agreements and
arrangements provide the employees with certain additional rights after a change
of control (as defined) of the Company occurs. As of December 31, 2000, if all
of the employees under contract were to be terminated by the Company without
good cause (as defined) under these contracts, the Company's liability would be
approximately $3.8 million.

    Future minimum compensation for the Company's employment agreements are as
follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
------------------------
<S>                                                            <C>
2001........................................................    $1,740,000
2002........................................................     1,245,000
2003........................................................       586,000
2004........................................................       136,000
2005........................................................        60,000
</TABLE>

    LITIGATION

    The Company, from time to time, becomes involved in various routine legal
proceedings in the ordinary course of its business. The Company believes that
the outcome of all pending legal proceedings and unasserted claims in the
aggregate will not have a material adverse effect on its consolidated results of
operations, consolidated financial position or liquidity.

12.  CAPITAL LEASE OBLIGATIONS

    At December 31, 2000 the Company was committed under capital leases,
principally for computer equipment and office equipment, expiring through 2004.
The assets and liabilities under the capital leases are recorded at the lower of
the present value of minimum lease payments or the fair market

                                      F-30
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12.  CAPITAL LEASE OBLIGATIONS (CONTINUED)
value of the assets. The assets are depreciated over their estimated useful
lives. The average interest rate on the capital leases is 5.6%.

    Future minimum payments under the lease agreements are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31
-----------------------
<S>                                                           <C>
2001........................................................  $ 2,357,282
2002........................................................    1,549,640
2003........................................................      826,514
2004........................................................      671,584
2005........................................................       14,667
                                                              -----------
  Total minimum lease payments..............................    5,419,687
Less--Amounts representing interest.........................     (553,571)
Less--Current portion.......................................   (2,116,582)
                                                              -----------
  Present value of net minimum lease payments...............  $ 2,749,534
                                                              ===========
</TABLE>

13.  EMPLOYEE BENEFIT PLAN

    The Company has a defined contribution plan ("the Plan") covering all of its
eligible employees in the U.S. The Plan was effective from January 1, 1996 and
is qualified under Section 401(k) of the Internal Revenue Code. Employees may
begin participation on monthly enrollment dates provided that they have reached
21 years of age and 6 months of service. The Company may make matching and/or
profit sharing contributions to the plan at its discretion. Contribution expense
was approximately $45,000, $0.7 million and $1.2 million, for the three years
ended December 31, 2000.

14.  RESTRUCTURING AND OTHER COSTS

    In December 2000, the Company reorganized its operations through a
restructuring plan in order to more properly align its capacity with the
changing demand environment for Internet services. The restructuring plan
included the closure of the Vail, Colorado office and other selected
company-wide staff reductions. Overall, the Company reduced its workforce by
approximately 190 employees, 130 of which were billable consultants. In
connection with the reorganization, the Company took a charge in the fourth
quarter of 2000 of approximately $12.9 million, all of which is included in
general and administrative expenses. Unpaid amounts of $11.1 million are
included in accrued restructuring charges as of December 31, 2000.

                                      F-31
<PAGE>
                        AGENCY.COM LTD. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14.  RESTRUCTURING AND OTHER COSTS (CONTINUED)
    The restructuring charges consists of the following:

<TABLE>
<CAPTION>
                                                  TOTAL EXPENSE   COST PAYMENT   ACCRUAL LEFT
                                                  -------------   ------------   ------------
<S>                                               <C>             <C>            <C>
Severance.......................................    3,768,000        413,000       3,355,000
Office Closure..................................    3,665,000         16,000       3,649,000
Abandonment of fixed assets.....................    3,620,000         11,000       3,609,000
Other Restructuring costs.......................      516,000         43,000         473,000
                                                   ----------        -------      ----------
  Total Restructuring costs.....................   11,569,000        483,000      11,086,000
                                                                     =======      ==========
Other costs.....................................    1,376,000
                                                   ----------
  Total Restructuring and other costs...........   12,945,000
                                                   ==========
</TABLE>

    Included in other costs is a one time write-off of leasehold improvements
associated with the Company's decision to terminate one of its leases.

                                      F-32
<PAGE>
SCHEDULE II

                        AGENCY.COM LTD. AND SUBSIDIARIES
                 SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                               BALANCE AT     CHARGED      CHARGED
                                               BEGINNING    TO COSTS AND   TO OTHER                BALANCE AT
                                                OF YEAR       EXPENSES     ACCOUNTS   DEDUCTIONS   END OF YEAR
                                               ----------   ------------   --------   ----------   -----------
<S>                                            <C>          <C>            <C>        <C>          <C>
For the fiscal year ended December 31, 2000:
  Allowance for doubtful accounts............    $5,164        $  (20)      $   --    $      --      $5,144
                                                 ------        ------       ------    ---------      ------
For the fiscal year ended December 31, 1999:
  Allowance for doubtful accounts............    $  826        $1,244       $3,094    $      --      $5,164
                                                 ------        ------       ------    ---------      ------
For the fiscal year ended December 31, 1998:
  Allowance for doubtful accounts............    $   43        $  785       $   --    $       2      $  826
                                                 ------        ------       ------    ---------      ------
</TABLE>
<PAGE>
                                 EXHIBIT INDEX

(3) Exhibits:

<TABLE>
<CAPTION>
NUMBER                                          DESCRIPTION
------                  ------------------------------------------------------------
<C>                     <S>
             3.1+       Amended and Restated Certificate of Incorporation.

             3.3+       Amended and Restated By-laws.

             4.1+       Specimen common stock certificate.

             4.2+       See Exhibits 3.1 and 3.2 for provisions of the Certificate
                        of Incorporation and By-laws of the Registrant defining the
                        rights of holders of Common Stock of the Registrant.

            10.1+       1999 Stock Option/Stock Issuance Plan (as Amended Restated
                        on October 13, 1999).*

            10.2+       Interactive Solutions Incorporated 1996 Stock Option Plan.

            10.3+       1998 Quadris Consulting, Inc. Equity Incentive Plan.*

            10.4+       Employment Agreement dated April 28, 1999, by and between
                        Chan Suh and the Registrant.*

            10.5+       Employment Agreement dated April 28, 1999, by and between
                        Kyle Shannon and the Registrant.*

            10.6+       Employment Agreement dated April 28, 1999, by and between
                        Kevin Rowe and the Registrant.*

            10.7+       Employment Agreement dated April 28, 1999, by and between
                        Kenneth Trush and the Registrant.*

            10.8+       Employment Agreement dated April 28, 1999, by and between
                        Eamonn Wilmott and the Registrant.*

            10.9+       Employment Agreement dated April 28, 1999, by and between
                        Lawrence Krakauer and the Registrant.*

           10.10+       Employment Agreement dated April 28, 1999, by and between
                        Janet Ambrosi Wertman and the Registrant.*

            10.11       Employment Agreement dated October 17, 2000, by and between
                        James Imbriaco and the Registrant.*

           10.12+       Restricted Stock Agreement, dated April 16, 1999, by and
                        between Kevin Rowe and the Registrant.*

          10.12A+       Credit Agreement, dated as of November 4, 1999 between
                        Omnicom Finance Inc. and the Registrant and Subsidiary
                        Guarantors.

           10.12B       Letter Agreement, dated January 26, 2000, by and between the
                        Registrant and Omnicom Finance, amending certain provisions
                        of the Credit Agreement.

           10.13+       Agreement and Plan of Merger, dated April 28, 1999, by and
                        between Interactive Solutions Incorporated and Quadris
                        Consulting, Inc.

           10.14+       Agreement and Plan of Merger, dated April 28, 1999, by and
                        between Interactive Solutions Incorporated and the
                        Registrant.

           10.15+       Agreement and Plan of Merger, dated April 28, 1999, by and
                        between Eagle River Interactive Inc. and the Registrant.

           10.16+       Agreement dated April 27, 1999, by and between Jeffrey
                        Rayport and the Registrant.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
NUMBER                                          DESCRIPTION
------                  ------------------------------------------------------------
<C>                     <S>
           10.17+       Stock Purchase Agreement, dated July 23, 1999, by and
                        between Topics Interactive Factory B.V. and the Registrant,
                        as amended.

           10.18+       Registration Rights Agreement dated November 23, 1999, by
                        and among the Registrant and Omnicom.

           10.19+       Employment Agreement dated October 28, 1999, by and between
                        Charles Dickson and the Registrant.*

           10.20+       Agreement and Plan of Merger, dated October 21, 1999, by and
                        among the Registrant ITI Acquisition Inc., Interactive
                        Traffic, Inc., and the Stockholders listed therein.

           10.21+       Acquisition Agreement, dated October 23, 1999, by and
                        between the Registrant and the Stockholders listed therein
                        and In-Com.

           10.22+       Stock Exchange Agreement, dated November 3, 1999, by and
                        between the Registrant and Visionik Holding ApS, Associated
                        Management Services A/S and Jorgen Lembke and Soren
                        Hougaard-Hansen.

           10.23+       1999 Employee Stock Purchase Plan.*

           10.24+       Consulting Agreement dated November 22, 1999, by and between
                        Thomas DeLong and the Registrant.

           10.25+       Warrant Agreement, dated November 24, 1999, by and between
                        Omnicom Group Inc. and the Registrant.

           10.26+       Warrant Agreement, as amended, dated April 28, 1999, by and
                        between Communicade, Inc. and the Registrant.

           10.27+       Lease, dated April 15, 1999, by and between 20 Place
                        Associates LLC and the Registrant.

            10.28       Separation and General Release and Consulting Agreement,
                        dated January 31, 2001, by and between Janet Ambrosi Wertman
                        and the Registrant*

            10.29       Promissory Note, Pledge Agreement and Indemnity Agreement to
                        the Company by Chan Suh

            10.30       Promissory Note, Pledge Agreement and Indemnity Agreement to
                        the Company by Kyle Shannon

            10.31       Promissory Note, Pledge Agreement and Indemnity Agreement to
                        the Company by Eamonn Wilmott

            16.1+       Letter from Ernst & Young LLP re Change in Certifying
                        Accountants.

            21.1+       Subsidiaries of the Registrant.

             23.1       Consent of Arthur Andersen LLP-New York, New York.
</TABLE>

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

+   Incorporated by reference to the exhibits filed with the Registrant's
    Registration Statement on Form S-1 (Reg. No. 333-986433), which was declared
    effective on December 8, 1999.

*   Management contract or compensatory plan or arrangement.

(b) Reports on Form 8-K

    None.