held by such holder, to the extent exercisable, may be exercised by suchholder’s executor, administrator, legal representative or similar person.
      **6.12 Governing Law.**This Plan, each award hereunder and the relatedAgreement, and all determinations made and actions taken pursuant thereto, tothe extent not otherwise governed by the Code or the laws of the United States,shall be governed by the laws of the State of Delaware and construed inaccordance therewith without giving effect to principles of conflicts of laws.
      **6.13 Granting Awards to Foreign Persons.**Without the amendment of thisPlan, the Committee may grant awards to persons designated by the Committeefrom time to time, who otherwise are eligible persons under Section 1.4 and whoare subject to the laws of foreign countries or jurisdictions. The Committeemay grant awards to such persons on such terms and conditions different fromthose specified in this Plan as may in the judgment of the Committee benecessary or desirable to foster and promote achievement of the purposes ofthis Plan and, in furtherance of such purposes, the Committee may make suchmodifications, amendments, procedures, subplans and the like as may benecessary or advisable to comply with provisions of the laws of other countriesor jurisdictions in which the Company or its Affiliates operate or haveemployees or other persons who are eligible persons under Section 1.4.
      **6.14 Additional Provisions Applicable to Options Granted Prior to IPO.**Inorder to comply with certain requirements of the California CorporateSecurities Law of 1968, as amended, this Section shall apply to options grantedunder this Plan prior to an IPO (a “Pre-IPO Option”). The terms set forth inthe Agreements pursuant to which Pre-IPO Options are granted on January 31,2000 (the “January 31, 2000 Options”) relating to (i) the period during whichan option may be exercised, (ii) the exercise, cancellation or otherdisposition of an option upon a termination of employment with the Company ofthe recipient of such option, whether by reason of Disability, Retirement,death or any other reason, (iii) restrictions on the transferability of anoption and (iv) the providing of annual financial statements to the holder ofan option are hereby incorporated into this Plan by reference as if set forthherein verbatim and shall apply in all respects only to all Pre-IPO Optionsgranted to eligible persons; provided, however, that Pre-IPO Options may begranted under this Plan having exercise periods different from those of theJanuary 31, 2000 Options so long as each such Pre-IPO Option becomesexercisable at a rate of at least 20% per year during the five-year periodcommencing on the date of grant of such Pre-IPO Option.
17

**EXHIBIT 99.1**
**FACTORS AFFECTING FUTURE FINANCIAL RESULTS**
      This Form 10-Q, our Annual Report to Shareholders, any Form 10-K or Form8-K or any other written or oral statements made by or on our behalf includeforward-looking statements that reflect our current views with respect tofuture events and financial performance. The forward-looking statements aresubject to certain risks and uncertainties, including those discussed below,that could cause actual results to differ materially from historical results oranticipated results. These statements speak only as of the date they are made,and we undertake no obligation to publicly update or revise anyforward-looking statements, whether as a result of new information, futureevents or otherwise.
      The following factors could cause our actual results to differ materiallyfrom historical results or anticipated results:
**Risks That Relate to Our Financial Results and Our Lack of Experience inManaging a Public Company**
      ***There will not be a consistent pattern in our financial results fromquarter to quarter, which may result in increased volatility of our stockprice.***
      We are a professional services organization. A major portion of ourrevenues is based on the number of hours billed by our professionals and theirhourly billing rates. Companies like ours experience variations in profitsduring the year. There are many reasons for these variations, but they cangenerally be attributed to the fact that we have limited control over thetiming and circumstances under which our services are provided because ourbusiness is dependent on the decisions and actions of our clients. For example,a client could delay or cancel a project because the client’s business isexperiencing financial problems or because of a slowdown in the economy oruncertainty as to the economy’s future direction. When this happens, it couldreduce, eliminate or delay our expected revenues, and we could lose the moneythat we have spent to obtain or staff the project. Also, the mix of clientprojects, the personnel required and their billing rates will affect results inour business in a meaningful way. Typically, client service hours are adverselyaffected during the first half of our fiscal year due to the large number ofvacation days and holidays during this period. The demand for our services isalso affected by general economic conditions. When economic activity slowsdown, as is currently the case in the United States, our clients are morelikely to decrease their technology budgets and to delay or cancel consultingcontracts. In addition, when e-commerce companies face eroding revenues andfunding difficulties, they may reduce their spending on consulting services.As a public company, our quarterly financial results will become more importantthan they were when our business was a part of KPMG LLP. We may not besuccessful in our efforts to help investors understand the reasons forfluctuations, especially in the face of a broad-based, general economicslowdown. This could lead to large movements in our stock price, both up anddown.
      ***The historical and pro forma financial information in our S-1 RegistrationStatement may not permit you to predict our company’s costs of operations.***

      The historical financial information in our S-1 Registration Statementdoes not reflect the added costs we expect to incur as a separate publiccompany or the resulting changes that will occur in our capital structure andoperations. Because we have been a part of KPMG LLP, we have been able to usemoney generated or borrowed by KPMG LLP to fund our activities instead ofhaving to sell stock or incur indebtedness from commercial lenders or publicdebt holders. It could be more expensive for us in the future to acquire equitycapital for our business, or to borrow money from unaffiliated lenders than ithas been to use funds advanced to us by KPMG LLP. In addition, since weoperated as part of the KPMG LLP partnership until January 31, 2000, ourbusiness paid no taxes on profits and no salaries were paid to the consultingpartners who became our employees after the separation. Therefore, in preparingour pro forma financial information we deducted and charged to earnings theestimated income taxes based on an estimated tax rate, which is likely to bedifferent from our actual tax rate in the future, and the estimated salariesfor the consulting partners of KPMG LLP who became our employees after theseparation. Included in our expenses are allocations of certain costs incurredby KPMG LLP on behalf of our business. These services could actually be moreexpensive in the future than is shown in our financial statements and pro formafinancial information. Equally important, we cannot assure you that theestimates we used in our financial statements and pro forma financialinformation will be similar to our actual experience as an independent company.See “Our Arrangements with KPMG LLP —Transition Services Agreement” in our S-1Registration Statement. For more information on our historical financialstatements and pro forma financial information, see “Pro Forma FinancialInformation” and our combined financial statements and related footnotes in ourRegistration Statement on Form S-1 (Registration No. 333-36328) (referred tobelow as “our S-1 Registration Statement”).
      ***We do not have experience in managing a public company.***
      Our management team has historically operated our business as a part ofKPMG LLP, which is a privately owned limited liability partnership. Most of theindividuals who now constitute our management were partners of KPMG LLP formany years and have never had responsibility for managing a separate, publiclytraded company. For more information about our executive officers and certainof our directors, see “Management” in our S-1 Registration Statement.
      ***We may have difficulty integrating or managing acquired businesses, whichmay harm our financial results or reputation in the marketplace.***
      Recently, we have expanded by making acquisitions, such as the acquisitionof Softline Consulting & Integrators, Inc. We have also recently acquired theconsulting businesses from the member firms of KPMG International in Argentina,Brazil, Canada, Colombia, Costa Rica, Guatemala, Ireland, Japan, Mexico, theNetherlands Antilles, New Zealand, Nicaragua, South Korea, Peru and Venezuela.Because we do not have significant acquisition experience, we may not succeedat integrating or managing acquired businesses or in managing the largercompany that results from these acquisitions. The non-United States KPMGconsulting practices or other entities we have acquired may not use the sameoperating principles or systems used by our company, making the integrationmore difficult. Client satisfaction or performance problems, whether as aresult of integration or management difficulties or otherwise, could have anadverse impact on the reputation of our company.

      ***Our growth is dependent in part on our ability to make acquisitions,including the acquisitions of non-U.S. KPMG consulting practices, and we riskoverpaying for acquired businesses.***
      Our growth strategy is dependent in part upon our ability to provideconsulting services worldwide, including our ability to develop a presence inEurope. We have explored, on a preliminary basis, with a number of the KPMGInternational firms in Europe the possibility of acquiring their consultingbusinesses, and we intend to explore, from time to time, other internationalexpansion opportunities. We cannot assure you that we will be able to reach anagreement with any of these practices or that any agreement we do reach will beon terms favorable to us. We will also continue to evaluate from time to time,on a selective basis, other strategic acquisitions if they will help us obtainwell-trained, high-quality professionals, new service offerings, additionalindustry expertise, a broader client base or an expanded geographic presence.We cannot assure you that we will be successful in identifying candidates orconsummating acquisitions on terms acceptable to us. In addition, there can beno assurance that financing for acquisitions will be available on termsacceptable to us, if at all. We may issue shares of our common stock as part ofthe purchase price for some or all of these acquisitions. Future issuances ofour common stock in connection with acquisitions also may dilute our earningsper share.
      ***Our international operations create special management, foreign currency,legal, tax and economic risks which we may not adequately address.***
      We believe that revenues from international operations may account for anincreasingly significant amount of our revenues in the future, especially inthe event that we continue to acquire non-United States consulting practices.As a result, we are increasingly subject to a number of risks, including:
• difficulties relating to managing our business internationally; • currency fluctuations; • restrictions against the repatriation of earnings; • the burdens of complying with a wide variety of foreign laws; • the absence in some jurisdictions of effective laws to protect ourintellectual property rights; and • multiple and possibly overlapping tax structures.
      Other factors that can adversely affect international operations arechanges in import or export duties and quotas, introduction of tariff ornon-tariff barriers and economic or political changes in international markets.If any of these risks materialize, there could be a material negative effect onour company’s operating results.

      ***We used most of our proceeds from our initial public offering that closedon February 13, 2001 to repurchase a portion of our Series A preferred stockfrom Cisco, to repay all of our indebtedness to KPMG LLP and to repay in partour outstanding indebtedness under our receivables purchase facility, so ourliquidity will depend on internally generated resources, our creditfacilities and future sales of our securities.***
      We used most of our proceeds from our initial public offering that closedon February 13, 2001 to repurchase a portion of our Series A preferred stockfrom Cisco, to repay all of our outstanding indebtedness to KPMG LLP and torepay in part our outstanding indebtedness under our receivables purchasefacility. See “Use of Proceeds” in our Form 10-Q for the quarter endedDecember 31, 2000. As a result, only approximately $24.4 million of ourproceeds from this offering were available for working capital, and we willcontinue to depend upon internally generated resources, our credit facilities,and future sales of our securities to meet our cash requirements.
**Risks That Relate to the Nature of Our Business**
      ***Our success is largely dependent on our ability to hire and retaintalented people at a time when our industry is generally experiencing ashortage of skilled professionals and a high rate of employee turnover.***
      Our business involves the delivery of professional services and is highlylabor-intensive. Our success depends largely on our general ability to attract,develop, motivate and retain highly skilled professionals. The loss of some ora significant number of our professionals or the inability to attract, hire,develop, train and retain additional skilled personnel could have a seriousnegative effect on us, including our ability to obtain and successfullycomplete important engagements and thus maintain or increase our revenues. Thecumulative annual rate of turnover among our U.S.-based professionalconsultants was 19.5%, 23.3% and 24.6% for fiscal years 1999 and 2000 and thenine months ended March 31, 2001, respectively, excluding any involuntaryterminations and terminations as a result of reductions in our workforce.Qualified consultants are in great demand, particularly in the high tech andcommunications and content industries, and are likely to remain a limitedresource for the foreseeable future. This situation has required us to increasethe compensation we pay our professionals at a rate higher than the generalinflation rate. Even so, we cannot assure that we will be successful inattracting and retaining the skilled professionals we require to conduct andexpand our operations successfully.
      ***Our ability to retain our managing directors is critical to the success ofour business.***
      The retention of our managing directors who previously were consultingpartners of KPMG LLP is particularly important to our future success. Thecumulative annual rate of turnover among our U.S.-based managing directors was4.7%, 8.4% and 9.5% for fiscal years 1999 and 2000 and the nine months endedMarch 31, 2001, respectively, excluding any involuntary terminations andterminations as a result of reductions in our workforce. As a result of ourchange from a partnership to a corporate structure and the creation of stockoption programs and other corporate employee benefits, our managing directorshave accepted cash compensation that is less than the payments they received asconsulting partners of KPMG LLP, and in some cases these reductions have beenmaterial. We cannot assure you that the substitution of cash compensation,equity-based incentives and other employee benefits in lieu of partnershipprofit distributed to consulting partners of KPMG LLP will be sufficient toretain these individuals. In addition, there is no guarantee that thenon-competition agreements we have entered into with our managing directors andother senior professionals are sufficiently broad to prevent our consultants

from leaving us for our competitors or that such agreements would be upheld byan arbitrator or a court if we were to seek to enforce our rights under theseagreements. For more information, see “Business —Employees and Our Culture”and “Our Arrangements with KPMG LLP —Member Distribution Agreements” in ourS-1 Registration Statement.
      ***If we are not able to keep up with rapid changes in technology or maintainstrong relationships with software providers, our business could suffer.***
      Our market is characterized by rapidly changing technologies, such as theevolution of the Internet, frequent new product and service introductions andevolving industry standards. If we cannot keep pace with these changes, ourbusiness could suffer.
      Our success will depend, in part, on our ability to develop serviceofferings that keep pace with rapid and continuing changes in technology,evolving industry standards and changing client preferences. Our success willalso depend on our ability to develop and implement ideas for the successfulapplication of existing and new technologies. We may not be successful inaddressing these developments on a timely basis or our ideas may not besuccessful in the marketplace. Also, products and technologies developed by ourcompetitors may make our services or product offerings less competitive orobsolete.
      We generate a significant portion of our revenues from projects toimplement software developed by others, including Oracle Corporation,PeopleSoft, Inc., and SAP America, Inc. Our future success in the softwareimplementation business depends on the continuing viability of these companiesand their ability to maintain market leadership. We cannot assure you that wewill be able to maintain a good relationship with these companies or that theywill maintain their leadership positions in the software market. For moreinformation about our rapidly changing industry, see “Business —IndustryBackground” in our S-1 Registration Statement.
      ***The loss of our significant joint marketing relationships could reduce ourrevenues and growth prospects.***
      We have significant joint marketing relationships with Cisco Systems,Inc., FedEx Corporation, Oracle Corporation, Qwest Communications InternationalInc. and SAP America, Inc. These relationships enable us to increase revenuesby providing us additional marketing exposure, expanding our sales coverage,increasing the training of our professionals, and developing and co-brandingservice offerings that respond to customer demand. The loss of one or more ofthese relationships could adversely affect our business by decreasing ourrevenues and growth prospects. Mergers, acquisitions and other businesscombinations involving one or more of these entities could result in changes inthe degree to which they will cooperate with us in joint marketing and productdevelopment. Moreover, because most of our significant joint marketingrelationships are nonexclusive, if our competitors are more successful inbuilding leading-edge products and services, these entities may form closer orpreferred arrangements with other consulting organizations. For moreinformation, see “Business —Our Joint Marketing Relationships” in our S-1Registration Statement.
      ***We may lose money if we do not accurately estimate the cost of a largeengagement which is conducted on a fixed-price basis.***
      A significant percentage of our engagements in our public servicesindustry group is performed on a fixed-price or fixed-time basis. During fiscalyears 1999 and 2000 and the nine months ended March

31, 2001, our public services segment revenues represented 28%,30% and 27%,respectively, of our company’s total revenues. While we do not track thepercentage of our engagements which are performed on a fixed-price orfixed-time basis, we believe that only a small percentage of our otherengagements are performed on this basis. In addition, some of our engagementsobligate us to provide ongoing maintenance and other supporting or ancillaryservices on a fixed-price basis or with limitations on our ability to increaseprices. Billing for fixed-time engagements is made in accordance with theengagement terms agreed to with our client. Revenues are recognized based uponprofessional costs incurred as a percentage of estimated total percentage costsof the respective contract, and unbilled revenues represent revenues forservices performed that have not been billed. When making proposals for thesetypes of engagements, we rely on our estimates of costs and timing forcompleting the projects. These estimates reflect our best judgment regardingthe efficiencies of our methodologies and professionals as we plan to applythem to the projects. Any increased or unexpected costs or unanticipated delaysin connection with the performance of fixed-price or fixed-time contracts,including delays caused by factors outside our control, could make thesecontracts less profitable or unprofitable. For more information, see“Management’s Discussion and Analysis of Financial Condition and Results ofOperations” and “Business —Sales and Marketing” in our S-1 RegistrationStatement.
      ***Our business will be negatively affected if growth of the use of theInternet declines.***
      Our business is dependent upon continued growth of the use of the Internetby our clients, prospective clients and their customers and suppliers. Theadoption of the Internet for commerce and communications, particularly by thoseindividuals and companies that have historically relied upon alternative meansof commerce and communication, generally requires the understanding andacceptance of a new way of conducting business and exchanging information. Inparticular, companies that have already invested substantial resources in othermeans of conducting commerce and exchanging information may be particularlyreluctant or slow to adopt a new, Internet-based strategy that may make theirexisting personnel and infrastructure obsolete. Published reports indicate thatcapacity constraints caused by growth in Internet usage may, unless resolved,impede further growth in Internet use. If the number of Internet users does notincrease and commerce over the Internet does not become more accepted andwidespread, demand for our consulting services may decrease and, as a result,our revenues would decline. The factors that may affect Internet usage orelectronic commerce adoption include:
• actual or perceived lack of security and privacy of information; • lack of access or ease of use; • congestion of traffic or other usage delays on the Internet; • inconsistent quality of service or lack of availability of cost-effective high speed service; • increases in access costs to the Internet; • excessive governmental regulation; • uncertainty regarding intellectual property ownership; • reluctance to adopt new business methods;

• costs associated with the obsolescence of existing infrastructure; and • impact of any taxes which may be imposed on transactions using the Internet.
      ***Our business may be harmed by existing or increased United States andforeign government regulation of the Internet.***
      In the United States and abroad, governments have recently passedlegislation relating to the Internet. Because these laws are still beingimplemented, we are not certain how our business will be impacted by them. Wemay be indirectly affected by this new legislation to the extent it impacts ourclients and potential clients. In addition, United States and foreigngovernmental bodies are considering, and may consider in the future, otherlegislative proposals that would regulate the Internet. We cannot predict if orhow any future legislation would impact our business.
      ***The Internet and systems integration consulting markets are highlycompetitive and we may not be able to compete effectively.***
      The Internet and systems integration consulting markets in which weoperate include a large number of participants and are highly competitive.Based on revenues and the number of consultants we have, we are smaller thansome of our competitors. In particular, these larger competitors may have theability to deploy a large number of professionals more quickly in response toan urgent client need, thereby giving them a competitive advantage over us. Ourprimary competitors come from a variety of market segments, including otherinformation technology service providers, large accounting, consulting andother professional service firms, packaged software vendors and service groupsof computer equipment companies.
      Our marketplace is experiencing rapid changes in its competitivelandscape. For instance, one of the “Big 5” accounting firms sold itsconsulting business, the consulting business of another “Big 5” accounting firmhas separated from the accounting firm and filed a registration statement forthe public offering of its stock, and others have indicated plans or proposalsto sell their consulting businesses or to seek capital in the public markets.These changes in our marketplace may create potentially larger and bettercapitalized competitors with enhanced abilities to attract and retain theirprofessionals. We also compete with our clients’ internal resources,particularly where these resources represent a fixed cost to the client. Thecompetitive nature of our industry may impose additional pricing pressures onus.
      Our ability to compete also depends in part on several factors beyond ourcontrol, including the ability of our competitors to hire, retain and motivateskilled professionals, the price at which others offer comparable services andour competitors’ responsiveness. There is a significant risk that this severecompetition will adversely affect our financial results in the future. For moreinformation, see “Business —Competition” in our S-1 Registration Statement.

      ***We currently have only a limited ability to protect our importantintellectual property rights.***
      We do not have any patents in the United States or any other jurisdictionto protect our products or methods of doing business. Existing laws in theUnited States offer limited protection for our business, and the laws of somecountries in which we provide services may not protect our intellectualproperty rights even to the same limited extent as the laws of the UnitedStates. The provisions in our agreements with clients which protect us againstthe unauthorized use, transfer and disclosure of our intellectual property andproprietary information may not be enforceable under the laws of somejurisdictions. In addition, we are sometimes required to negotiate limits onthese provisions in our contracts.
      Our business includes the development of customized software modules inconnection with specific client engagements, particularly in our systemsintegration business. We frequently assign to clients the copyright and otherintellectual property rights in some aspects of the software and documentationdeveloped for these clients. Although our contracts with our clients mayprovide that we also retain rights to our intellectual property, it is possiblethat clients will assert rights to, and seek to limit our use of, thisintellectual property.
      There can be no assurance that the steps we take will be adequate to determisappropriation of proprietary information or that we will be able to detectunauthorized use and take appropriate steps to enforce our intellectualproperty rights. For more information, see “Business —Intellectual Property”in our S-1 Registration Statement.
      ***Our services may infringe upon the intellectual property rights of others.***
      We cannot be sure that our services do not infringe on the intellectualproperty rights of others, and we may have infringement claims asserted againstus. These claims may harm our reputation, cost us money and prevent us fromoffering some services. In our contracts, we agree to indemnify our clients forany expenses or liabilities resulting from claimed infringements of theintellectual property rights of third parties. In some instances, the amount ofthese indemnities may be greater than the revenues we receive from the client.Any claims or litigation in this area, whether we ultimately win or lose, couldbe time-consuming, may injure our reputation, may result in costly delays ormay require us to enter into royalty or licensing arrangements. For moreinformation, see “Business —Intellectual Property” in our S-1Registration Statement.
      ***We may face legal liabilities and damage to our professional reputationfrom claims made against our work.***
      Many of our engagements involve projects that are critical to theoperations of our clients’ businesses. If we fail to meet our contractualobligations, we could be subject to legal liability, which could adverselyaffect our business, operating results and financial condition. The provisionswe typically include in our contracts which are designed to limit our exposureto legal claims relating to our services and the applications we develop maynot protect us or may not be enforceable under some circumstances or under thelaws of some jurisdictions. We have experienced liability claims in the pastwhich have resulted in litigation expenses and payments for settlements. It islikely, because of the nature of our business, that we will be sued in thefuture. Moreover, as a consulting firm, we depend to a large extent on ourrelationships with our clients and our reputation for high caliber professionalservices and integrity to retain and attract

clients and employees. As a result, claims made against our work may be moredamaging in our industry than in other businesses.
**Risks That Relate to Our Relationship with KPMG LLP and its Related Entities**
      ***The agreements relating to our separation from KPMG LLP were notnegotiated on an arm’s-length basis, and there is no assurance that theseagreements are on terms comparable to those that could have been obtained fromunaffiliated third parties.***
      As part of our separation from KPMG LLP, we entered into a separationagreement which governed the transfer of the assets and liabilities relating toour business and contained indemnification provisions between us and KPMG LLP.We have also entered into a non-competition agreement with KPMG LLP thatspecifies which services will be offered by us and which by KPMG LLP. Theseagreements are not the result of arm’s-length negotiations, and therefore wecannot assure you that their terms are comparable to the terms we could haveobtained from unaffiliated third parties.
      Under our transition services agreement, KPMG LLP will provide us forvarying periods of time with basic administrative, clerical and processingservices in areas such as accounting support, technology support, humanresources, employee benefits and office space support. The fees we pay for manyof these services are based on the total costs of providing these services on acentralized basis to both our company and KPMG LLP. We will be assessed anallocated portion of these costs based on the relative headcount, usage andother factors of our company and KPMG LLP. However, because these agreementswere negotiated in the context of a “parent-subsidiary” relationship and werenot the result of arm’s-length negotiations, we may pay more or less for suchservices and receive better or worse service than if we had purchased suchservices from third party providers. For further information, see “OurArrangements with KPMG LLP” in our S-1 Registration Statement.
      ***The termination of services provided under the transition servicesagreement could involve significant expense which would adversely affect ourfinancial results.***
      The services offered under the transition services agreement generallyexpire on February 13, 2004. Use of the information technology and relatedprocessing systems will expire on February 13, 2005. It is the intent of theparties that, during the term of the agreement, our company will wind down itsreceipt of services from KPMG LLP and will develop our own internalinfrastructure and support capabilities or seek third party providers of suchservices.
      To the extent that the amount we pay KPMG LLP for any particular servicesunder the transition services agreement is less than the fee we would becharged by a third party in an arm’s-length transaction, the expiration ortermination of the transition services agreement could result in an additionalexpense which would adversely affect our financial results.
      In addition, as we terminate or wind down the receipt of services fromKPMG LLP, we will be obligated to pay to KPMG LLP any “termination costs”incurred as a result of KPMG LLP having made investments in systems, personnelor other assets assuming our company would remain a part of KPMG LLP.Termination costs include those costs incurred or to be incurred by KPMG LLPfrom the termination or winding down of a service as a result of KPMG LLP’sinvestment in and development of shared infrastructure and national supportcapabilities, such as unneeded personnel, unnecessary software licensingarrangements, investments in technology and any related costs of termination.For more detailed

information on the transition services agreement and the calculation oftermination costs, see “Our Arrangements with KPMG LLP —Transition ServicesAgreement” in our S-1 Registration Statement.
      ***The member firms of KPMG International have the right to conduct businessunder the name “KPMG Consulting,” which may cause confusion among clients andinvestors.***
      On February 13, 2001, we entered into a limited license agreement withKPMG International. The agreement granted us the right to use the KPMG name fora period of up to four years after February 13, 2001. However, because thegrant of the name is not exclusive to our company, member firms of KPMGInternational will also have the right to market consulting services under thename “KPMG Consulting” in countries where we have not acquired the consultingpractice of the member firm. Consequently, the KPMG International member firmsin Europe and Asia, excluding those member firms who have sold us theirconsulting businesses, may conduct business in their countries under the samename as our company. KPMG International will use its best efforts to causethese member firms to distinguish themselves from our company. Nonetheless,there is a potential for clients, investors and analysts to confuse our companywith these other businesses. Adverse publicity regarding another “KPMGConsulting” firm may damage our reputation as well as negatively affect ourrevenues or our efforts to expand our revenues. For more information, see “OurArrangements with KPMG LLP —Limited License Agreement” in our S-1 RegistrationStatement.
      ***We have agreed not to compete with member firms of KPMG International incountries where we have not acquired the consulting practice of the memberfirm, which may limit our ability to develop a global company.***
      In the limited license agreement with KPMG International relating to ourright to use the KPMG name, we have agreed not to compete with a member firm ofKPMG International outside of our “operating territories,” which is defined tomean the territories of member firms or subsidiaries whose consulting practiceswe have acquired. In addition, we have agreed not to solicit or hire anypartner or employee of a member firm without the consent of the firm. Theserestrictions will apply until the later of (i) December 31, 2001 or (ii) sixmonths after we have notified KPMG International that we will terminate thelimited license agreement, but in no case later than February 13, 2005. Theagreement provides that if we are providing consulting services and products ona project primarily based in our operating territories, we will be permitted toengage any person, firm or entity that is not a member firm of KPMGInternational to deliver consulting services and products for the portion ofthe services or products to be provided on the project outside of our operatingterritories. The effect of these restrictions may be to limit our abilityduring the non-competition period to expand our physical presence in Europe andAsia, other than in those territories where we have purchased the consultingbusiness of a KPMG International member firm or subsidiary, unless we obtainthe consent of the local KPMG International member firm or subsidiary oracquire its consulting practice. This, in turn, may adversely affect ourability to compete against global consulting firms. For more information, see“Our Arrangements with KPMG LLP —Limited License Agreement” in our S-1Registration Statement.
      ***The termination of the use of the KPMG name by our company may cause us tolose brand and market recognition.***

      Our agreement with KPMG International regarding the use of the KPMG namerequires us to change our name within four years after February 13, 2001.Changing our name will require us to establish a new brand identity, and wecannot assure that we will be able to do so successfully. This could adverselyaffect our operations by limiting our ability to gain new contracts and/or byincreasing our marketing costs to establish our branding and name recognition.
      ***The non-competition agreement with KPMG LLP prohibits us from providingcertain services and may limit our ability to effectively move into certain newservices in the future.***
      Our non-competition agreement with KPMG LLP prohibits us from offering taxor assurance services, including attestation and verification services, anddefined consulting services which were historically and will continue to beprovided by KPMG LLP’s tax and assurance practices, such as certain businessrisk and technology risk management services and other services utilizing KPMGLLP’s proprietary business measurement process as a platform for the deliveryof such services. KPMG LLP will continue to offer these services. Thisprohibition may limit our ability to serve our clients.
      In the event that both we and KPMG LLP desire to provide a new type ofservice or in the event we cannot agree with KPMG LLP as to who has the rightto provide an existing service, the non-competition agreement provides aframework for resolving such disputes. However, if this process fails toresolve any such dispute in a timely and efficient manner, we may lose theopportunity to enter into a new market or pursue sales leads on a timely basis.In addition, ongoing disputes with KPMG LLP as to who can provide a type ofexisting or new service may result in both us and KPMG LLP bidding on similarwork which, in turn, may damage our reputation in the marketplace.
      For more information on the non-competition agreement and the services wemay not provide, see “Our Arrangements with KPMG LLP —Non-CompetitionAgreement” in our S-1 Registration Statement.
      ***We cannot assure you that KPMG LLP will not provide systems integrationand integrated solutions consulting services after the expiration of thenon-competition agreement.***
      During the five year term of the non-competition agreement, KPMG LLP willbe prohibited from offering systems integration and integrated solutionsconsulting services, which is the consulting business transferred by KPMG LLPto our company. KPMG LLP informed us prior to the completion of our initialpublic offering that it has made no determination as to whether it will provideany systems integration and integrated solutions consulting services followingthe expiration of the five-year period. KPMG LLP has no obligation to inform usof its intentions, and it is possible that KPMG LLP may provide systemsintegration and integrated solutions consulting services after the expirationof this agreement. For more information on the non-competition agreement, see“Our Arrangements with KPMG LLP —Non-Competition Agreement” in our S-1Registration Statement.
      ***We cannot assure you that our separation from KPMG LLP will not have anadverse effect on some of our client relationships.***
      A portion of our clients are also audit clients of KPMG LLP. Of our top150 clients, as measured by revenues in fiscal year 2000, 28 clients, or 19%,were also audit clients of KPMG LLP. These 28 clients represented approximately21% of fiscal year 2000 revenues we received from our top 150 clients. Duringfiscal year 2000, we added approximately 745 new clients. Of this total, 99clients, or 13%, were also audit

clients of KPMG LLP. While we do not believe that audit clients have generallyhired us because we were part of KPMG LLP, we cannot assure you that ourseparation from KPMG LLP and the complete divestiture by KPMG LLP of itsholdings of our common stock will not adversely affect these clients’relationships or our ability to obtain new engagements.
**Risks that Relate to Our Relationship with Cisco**
      ***Our alliance agreement with Cisco may require us to make investments inpersonnel and equipment even if we do not generate sufficient correspondingrevenues for us, which may decrease our net income.***
      Under our alliance agreement with Cisco, we have agreed to increase thenumber of consultants trained to perform certain tasks by certain dates. Tomeet these goals, we will need to hire new personnel and invest in training newand existing personnel. In addition, we have committed to building six solutioncenters which provide clients advanced technology equipment to develop,demonstrate and provide training on our service offerings using Cisco hardware.The alliance agreement with Cisco requires us to meet these training andsolution center development schedules even in the event that the results of ouroperations do not justify such activities. If the anticipated benefits of ouralliance with Cisco do not materialize, or fail to materialize in the timeframe we anticipate, and we nonetheless have to hire additional consultants ormake additional investments in Cisco-related equipment, it could adverselyaffect our profitability.
      ***Our alliance agreement with Cisco does not prevent Cisco from enteringinto similar agreements with our competitors, and any agreements withcompetitors might diminish the effectiveness of our relationship with Ciscowithout reducing our obligations under the alliance agreement.***
      As a part of our alliance agreement with Cisco, we have agreed to makeinvestments in personnel, training and equipment and to limitations on ourability to jointly market with Lucent Technologies Inc., Nortel NetworksCorporation, Alcatel S.A. or Juniper Networks. These obligations andrestrictions will remain in place even if Cisco enters into a similararrangement with one of our competitors. We believe, based on publishedreports, that Cisco has entered into joint marketing agreements with certain ofour competitors, including Cap Gemini Ernst & Young and PricewaterhouseCoopersLLP. To the extent that either of these arrangements or any future arrangementsentered into by Cisco and our other competitors are similar in nature and scopeto our agreement, the effectiveness of our joint marketing efforts may benegatively impacted and our relationship with Cisco may generate lower revenuesthan we anticipate, which could adversely affect our profitability.