Document:

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                                                                   EXHIBIT 10.18

                              KPMG CONSULTING, INC.

                          2000 LONG-TERM INCENTIVE PLAN

                     (AS AMENDED THROUGH SEPTEMBER 15, 2000)

                                 I. INTRODUCTION

         1.1 PURPOSES. The purposes of the 2000 Long-Term Incentive Plan (this
"Plan") of KPMG Consulting, Inc., a Delaware corporation (the "Company"), are
(i) to align the interests of the Company's stockholders and the recipients of
awards under this Plan by providing a means to increase the proprietary interest
of such recipients in the Company's growth and success, (ii) to advance the
interests of the Company by increasing its ability to attract and retain highly
competent officers, other employees, non-employee directors and consultants and
(iii) to motivate such persons to act in the long-term best interests of the
Company and its stockholders.

         1.2 CERTAIN DEFINITIONS.

         "AGREEMENT" shall mean the written agreement evidencing an award
hereunder between the Company and the recipient of such award.

         "BOARD" shall mean the Board of Directors of the Company.

         "BONUS STOCK" shall mean shares of Common Stock which are not subject
to a Restriction Period or Performance Measures.

         "BONUS STOCK AWARD" shall mean an award of Bonus Stock under this Plan.

         "CHANGE IN CONTROL" shall have the meaning set forth in Section 6.8(b).

         "CODE" shall mean the Internal Revenue Code of 1986, as amended.

         "COMMITTEE" shall mean the committee designated by the Board which,
following an IPO, shall consist of two or more members of the Board, each of
whom may be a "Non-Employee Director" within the meaning of Rule 16b-3 under the
Exchange Act.

         "COMMON STOCK" shall mean the common stock, $0.01 par value, of the
Company.

         "COMPANY" shall have the meaning set forth in Section 1.1.

         "DISABILITY" shall mean the inability of the recipient of an award to
perform substantially such recipient's duties and responsibilities for a
continuous period of at least six months, as determined solely by the Committee.

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         "DISCRETIONARY DIRECTOR OPTIONS" shall have the meaning set forth in
Section 5.4.

         "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.

         "FAIR MARKET VALUE" shall mean the last sale price of a share of Common
Stock as reported on the Nasdaq National Market on the date as of which such
value is being determined or, if there shall be no reported transactions on such
date, on the next preceding date for which a transaction was reported; provided,
however, that if the Common Stock is not traded on the Nasdaq National Market,
Fair Market Value may be determined by the Committee by whatever means or method
as the Committee, in the good faith exercise of its discretion, shall at such
time deem appropriate.

         "FREE-STANDING SAR" shall mean an SAR which is not issued in tandem
with, or by reference to, an option, which entitles the holder thereof to
receive, upon exercise, shares of Common Stock (which may be Restricted Stock),
cash or a combination thereof with an aggregate value equal to the excess of the
Fair Market Value of one share of Common Stock on the date of exercise over the
base price of such SAR, multiplied by the number of such SARs which are
exercised.

         "INCENTIVE STOCK OPTION" shall mean an option to purchase shares of
Common Stock that meets the requirements of Section 422 of the Code, or any
successor provision, which is intended by the Committee to constitute an
Incentive Stock Option.

         "INCUMBENT BOARD" shall have the meaning set forth in Section
6.8(b)(3).

         "IPO" shall mean an initial public offering of Common Stock pursuant to
an effective registration statement under the Securities Act of 1933, as
amended.

         "MATURE SHARES" shall mean previously-acquired shares of Common Stock
for which the holder thereof has good title, free and clear of all liens and
encumbrances and which such holder either (i) has held for at least six months
or (ii) has purchased on the open market.

         "NON-EMPLOYEE DIRECTOR" shall mean any director of the Company who is
not an officer or employee of the Company or any Subsidiary and who is not a
partner, principal or employee of KPMG LLP.

         "NON-STATUTORY STOCK OPTION" shall mean an option to purchase shares of
Common Stock which is not an Incentive Stock Option.

         "PERFORMANCE MEASURES" shall mean the criteria and objectives,
established by the Committee, which shall be satisfied or met (i) as a condition
to the exercisability of all or a portion of an option or SAR, (ii) as a
condition to the grant of a Stock Award or (iii) during the applicable
Restriction Period or Performance Period as a condition to the holder's receipt,
in the case of a Restricted Stock Award, of the shares of Common Stock subject
to such award, or, in the case of a Performance Share Award, of the shares of
Common Stock subject to such award and/or of payment with respect to such award.
Such criteria and objectives may include one or more of the following: the
attainment by a share of Common Stock of a specified Fair Market Value for a
specified period of time, earnings per share, return to stockholders (including

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dividends), return on equity, earnings of the Company, revenues, market share,
cash flow or cost reduction goals, or any combination of the foregoing. In the
sole discretion of the Committee, the Committee may amend or adjust the
Performance Measures or other terms and conditions of an outstanding award in
recognition of unusual or nonrecurring events affecting the Company or its
financial statements or changes in law or accounting principles.

         "PERFORMANCE PERIOD" shall mean any period designated by the Committee
during which the Performance Measures applicable to a Performance Share Award
shall be measured.

         "PERFORMANCE SHARE" shall mean a right, contingent upon the attainment
of specified Performance Measures within a specified Performance Period, to
receive one share of Common Stock, which may be Restricted Stock or, in lieu of
all or a portion thereof, the Fair Market Value of such share of Common Stock in
cash.

         "PERFORMANCE SHARE AWARD" shall mean an award of Performance Shares
under this Plan.

         "PERSON" shall have the meaning set forth in Section 6.8(b)(3).

         "RESTRICTED STOCK" shall mean shares of Common Stock which are subject
to a Restriction Period.

         "RESTRICTED STOCK AWARD" shall mean an award of Restricted Stock under
this Plan.

         "RESTRICTION PERIOD" shall mean any period designated by the Committee
during which the Common Stock subject to a Restricted Stock Award may not be
sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or
disposed of, except as provided in this Plan or the Agreement relating to such
award.

         "RETIREMENT" shall mean termination of employment with or service to
the Company by reason of retirement on or after age 65.

         "SAR" shall mean a stock appreciation right which may be a
Free-Standing SAR or a Tandem SAR.

         "STOCK AWARD" shall mean a Restricted Stock Award or a Bonus Stock
Award.

         "SUBSIDIARY" and "SUBSIDIARIES" shall have the meanings set forth in
Section 1.4.

         "TANDEM SAR" shall mean an SAR which is granted in tandem with, or by
reference to, an option (including a Non-Statutory Stock Option granted prior to
the date of grant of the SAR), which entitles the holder thereof to receive,
upon exercise of such SAR and surrender for cancellation of all or a portion of
such option, shares of Common Stock (which may be Restricted Stock), cash or a
combination thereof with an aggregate value equal to the excess of the Fair
Market Value of one share of Common Stock on the date of exercise over the base
price of such SAR, multiplied by the number of shares of Common Stock subject to
such option, or portion thereof, which is surrendered.

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         "TAX DATE" shall have the meaning set forth in Section 6.5.

         "TEN PERCENT HOLDER" shall have the meaning set forth in Section
2.1(a).

         1.3 ADMINISTRATION. This Plan shall be administered by the Committee.
Any one or a combination of the following awards may be made under this Plan to
eligible persons: (i) options to purchase shares of Common Stock in the form of
Incentive Stock Options or Non-Statutory Stock Options, (ii) SARs in the form of
Tandem SARs or Free-Standing SARs, (iii) Stock Awards in the form of Restricted
Stock or Bonus Stock and (iv) Performance Shares. The Committee shall, subject
to the terms of this Plan, select eligible persons for participation in this
Plan and determine the form, amount and timing of each award to such persons
and, if applicable, the number of shares of Common Stock, the number of SARs and
the number of Performance Shares subject to such an award, the exercise price or
base price associated with the award, the time and conditions of exercise or
settlement of the award and all other terms and conditions of the award,
including, without limitation, the form of the Agreement evidencing the award.
The Committee may, in its sole discretion and for any reason at any time, take
action such that (i) any or all outstanding options and SARs shall become
exercisable in part or in full, (ii) all or a portion of the Restriction Period
applicable to any outstanding Restricted Stock Award shall lapse, (iii) all or a
portion of the Performance Period applicable to any outstanding Performance
Share Award shall lapse and (iv) the Performance Measures applicable to any
outstanding award (if any) shall be deemed to be satisfied at the maximum or any
other level. The Committee shall, subject to the terms of this Plan, interpret
this Plan and the application thereof, establish rules and regulations it deems
necessary or desirable for the administration of this Plan and may impose,
incidental to the grant of an award, conditions with respect to the award, such
as limiting competitive employment or other activities. All such
interpretations, rules, regulations and conditions shall be final, binding and
conclusive.

         The Committee may delegate some or all of its power and authority
hereunder to the Board or either of the Co-Chief Executive Officers or other
executive officer of the Company as the Committee deems appropriate; provided,
however, that the Committee may not delegate its power and authority to either
of the Co-Chief Executive Officers or other executive officer of the Company
with regard to the selection for participation in this Plan of an officer or
other person subject to Section 16 of the Exchange Act or decisions concerning
the timing, pricing or amount of an award to such an officer or other person.

         No member of the Board or Committee, and neither a Co-Chief Executive
Officer nor any other executive officer to whom the Committee delegates any of
its power and authority hereunder, shall be liable for any act, omission,
interpretation, construction or determination made in connection with this Plan
in good faith, and the members of the Board and the Committee and the Co-Chief
Executive Officers or other executive officer shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including attorneys' fees) arising therefrom to the full
extent permitted by law, except as otherwise may be provided in the Company's
Certificate of Incorporation and/or By-laws, and under any directors' and
officers' liability insurance that may be in effect from time to time.

         A majority of the Committee shall constitute a quorum. The acts of the
Committee shall be either (i) acts of a majority of the members of the Committee
present at any meeting at which

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a quorum is present or (ii) acts approved in writing by all of the members of
the Committee without a meeting.

         1.4 ELIGIBILITY. Participants in this Plan shall consist of such
officers, other employees and consultants, and persons expected to become
officers, other employees and consultants, of the Company and its subsidiaries
from time to time (individually a "Subsidiary" and collectively the
"Subsidiaries"), as the Committee in its sole discretion may select from time to
time, and such other persons designated by the Committee pursuant to Section
6.13. For purposes of this Plan, references to employment also shall mean a
consulting relationship and references to employment by the Company also shall
mean employment by a Subsidiary. The Committee's selection of a person to
participate in this Plan at any time shall not require the Committee to select
such person to participate in this Plan at any other time. Non-Employee
Directors of the Company shall be eligible to participate in this Plan in
accordance with Article V.

         1.5 SHARES AVAILABLE. Subject to adjustment as provided in Section 6.7,
177,000,000 shares of Common Stock shall be available for grants of awards under
this Plan, reduced by the sum of the aggregate number of shares of Common Stock
which become subject to outstanding options, including Discretionary Director
Options, outstanding Free-Standing SARs, outstanding Stock Awards and
outstanding Performance Share Awards. To the extent that shares of Common Stock
subject to an outstanding option (except to the extent shares of Common Stock
are issued or delivered by the Company in connection with the exercise of a
Tandem SAR), Free-Standing SAR, Stock Award or Performance Share Award are not
issued or delivered by reason of the expiration, termination, cancellation or
forfeiture of such award or by reason of the delivery or withholding of shares
of Common Stock to pay all or a portion of the purchase price of an award, if
any, or to satisfy all or a portion of the tax withholding obligations relating
to an award, then such shares of Common Stock shall again be available under
this Plan. Subject to adjustment as provided in Section 6.7, the total number of
shares of Common Stock available under this Plan pursuant to all Stock Awards
and Performance Share Awards shall not exceed 4,000,000 of the total number of
shares of Common Stock available under this Plan.

         Shares of Common Stock shall be made available from authorized and
unissued shares of Common Stock, or authorized and issued shares of Common Stock
reacquired and held as treasury shares or otherwise or a combination thereof.

                 II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

         2.1 STOCK OPTIONS. The Committee may, in its discretion, grant options
to purchase shares of Common Stock to such eligible persons as may be selected
by the Committee. Each option, or portion thereof, that is not an Incentive
Stock Option shall be a Non-Statutory Stock Option. An Incentive Stock Option
may not be granted to any person who is not an employee of the Company or any
parent or subsidiary (as defined in Section 424 of the Code). Each Incentive
Stock Option shall be granted within ten years of the date this Plan is adopted
by the Board. To the extent that the aggregate Fair Market Value (determined as
of the date of grant) of shares of Common Stock with respect to which options
designated as Incentive Stock Options are exercisable for the first time by a
participant during any calendar year (under this Plan or any

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other plan of the Company or any parent or subsidiary as defined in Section 424
of the Code) exceeds the amount (currently $100,000) established by the Code,
such options shall constitute Non-Statutory Stock Options.

         Options shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with the
terms of this Plan, as the Committee shall deem advisable:

         (a) Number of Shares and Purchase Price. The number of shares of Common
Stock subject to an option and the purchase price per share of Common Stock
purchasable upon exercise of the option shall be determined by the Committee;
provided, however, that the purchase price per share of Common Stock purchasable
upon exercise of the option shall not be less than 100% of the Fair Market Value
of a share of Common Stock on the date of grant of such option; and provided
further, that if an Incentive Stock Option shall be granted to any person who,
at the time such option is granted, owns capital stock possessing more than ten
percent of the total combined voting power of all classes of capital stock of
the Company (or of any parent or subsidiary as defined in Section 424 of the
Code) (a "Ten Percent Holder"), the purchase price per share of Common Stock
shall not be less than the price (currently 110% of Fair Market Value) required
by the Code in order to constitute an Incentive Stock Option.

         (b) Exercise Period and Exercisability. The period during which an
option may be exercised shall be determined by the Committee; provided, however,
that no Incentive Stock Option shall be exercised later than ten years after its
date of grant; and provided further, that if an Incentive Stock Option shall be
granted to a Ten Percent Holder, such option shall not be exercised later than
five years after its date of grant. The Committee may, in its discretion,
establish Performance Measures which shall be satisfied or met as a condition to
the grant of an option or to the exercisability of all or a portion of an
option. The Committee shall determine whether an option shall become exercisable
in cumulative or non-cumulative installments and in part or in full at any time.
An exercisable option, or portion thereof, may be exercised only with respect to
whole shares of Common Stock.

         (c) Method of Exercise. An option may be exercised (i) by giving
written notice to the Company specifying the number of whole shares of Common
Stock to be purchased and by accompanying such notice with payment therefor in
full (or by arranging for such payment to the Company's satisfaction) either (A)
in cash, (B) by delivery (either actual delivery or by attestation procedures
established by the Company) of Mature Shares having an aggregate Fair Market
Value, determined as of the date of exercise, equal to the aggregate purchase
price payable by reason of such exercise, (C) in cash by a broker-dealer
acceptable to the Company to whom the optionee has submitted an irrevocable
notice of exercise or (D) a combination of (A) and (B), in each case to the
extent set forth in the Agreement relating to the option, (ii) if applicable, by
surrendering to the Company any Tandem SARs which are cancelled by reason of the
exercise of the option and (iii) by executing such documents as the Company may
reasonably request. The Company shall have sole discretion to disapprove of an
election pursuant to any of clauses (i)(B)-(D). Any fraction of a share of
Common Stock which would be required to pay such purchase price shall be
disregarded and the remaining amount due shall be paid in cash by the optionee.
No certificate representing Common Stock shall be delivered until the full

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purchase price therefor and any withholding taxes thereon, as described in
Section 6.5, have been paid (or arrangement made for such payment to the
Company's satisfaction).

         2.2 STOCK APPRECIATION RIGHTS. The Committee may, in its discretion,
grant SARs to such eligible persons as may be selected by the Committee. The
Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a
Free-Standing SAR.

         SARs shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
this Plan, as the Committee shall deem advisable:

         (a) Number of SARs and Base Price. The number of SARs subject to an
award shall be determined by the Committee. Any Tandem SAR related to an
Incentive Stock Option shall be granted at the same time that such Incentive
Stock Option is granted. The base price of a Tandem SAR shall be the exercise
price per share of Common Stock of the related option. The base price of a
Free-Standing SAR shall be determined by the Committee; provided, however, that
such base price shall not be less than 100% of the Fair Market Value of a share
of Common Stock on the date of grant of such SAR.

         (b) Exercise Period and Exercisability. The Agreement relating to an
award of SARs shall specify whether such award may be settled in shares of
Common Stock (including shares of Restricted Stock) or cash or a combination
thereof. The period for the exercise of an SAR shall be determined by the
Committee; provided, however, that no Tandem SAR shall be exercised later than
the expiration, cancellation, forfeiture or other termination of the related
option. The Committee may, in its discretion, establish Performance Measures
which shall be satisfied or met as a condition to the grant of an SAR or to the
exercisability of all or a portion of an SAR. The Committee shall determine
whether an SAR may be exercised in cumulative or non-cumulative installments and
in part or in full at any time. An exercisable SAR, or portion thereof, may be
exercised, in the case of a Tandem SAR, only with respect to whole shares of
Common Stock and, in the case of a Free-Standing SAR, only with respect to a
whole number of SARs. If an SAR is exercised for shares of Restricted Stock, a
certificate or certificates representing such Restricted Stock shall be issued
in accordance with Section 3.2(c) and the holder of such Restricted Stock shall
have such rights of a stockholder of the Company as determined pursuant to
Section 3.2(d). Prior to the exercise of an SAR for shares of Common Stock,
including Restricted Stock, the holder of such SAR shall have no rights as a
stockholder of the Company with respect to the shares of Common Stock subject to
such SAR.

         (c) Method of Exercise. A Tandem SAR may be exercised (i) by giving
written notice to the Company specifying the number of whole SARs which are
being exercised, (ii) by surrendering to the Company any options which are
cancelled by reason of the exercise of the Tandem SAR and (iii) by executing
such documents as the Company may reasonably request. A Free-Standing SAR may be
exercised (i) by giving written notice to the Company specifying the whole
number of SARs which are being exercised and (ii) by executing such documents as
the Company may reasonably request.

         2.3 TERMINATION OF EMPLOYMENT OR SERVICE. Subject to the requirements
of the Code, all of the terms relating to the exercise, cancellation or other
disposition of an option or

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SAR upon a termination of employment with or service to the Company of the
recipient of such option or SAR, as the case may be, whether by reason of
Disability, Retirement, death or any other reason, shall be determined by the
Committee.

                                III. STOCK AWARDS

         3.1 STOCK AWARDS. The Committee may, in its discretion, grant Stock
Awards to such eligible persons as may be selected by the Committee. The
Agreement relating to a Stock Award shall specify whether the Stock Award is a
Restricted Stock Award or Bonus Stock Award.

         3.2 TERMS OF STOCK AWARDS. Stock Awards shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee shall
deem advisable.

         (a) Number of Shares and Other Terms. The number of shares of Common
Stock subject to a Restricted Stock Award or Bonus Stock Award and the
Performance Measures (if any) and Restriction Period applicable to a Restricted
Stock Award shall be determined by the Committee. Bonus Stock Awards shall not
be subject to any Performance Measures or Restriction Periods.

         (b) Vesting and Forfeiture. The Agreement relating to a Restricted
Stock Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of the
shares of Common Stock subject to such award (i) if specified Performance
Measures are satisfied or met during the specified Restriction Period or (ii) if
the holder of such award remains continuously in the employment of or service to
the Company during the specified Restriction Period and for the forfeiture of
all or a portion of the shares of Common Stock subject to such award (x) if
specified Performance Measures are not satisfied or met during the specified
Restriction Period or (y) if the holder of such award does not remain
continuously in the employment of or service to the Company during the specified
Restriction Period.

         (c) Share Certificates. During the Restriction Period, a certificate or
certificates representing a Restricted Stock Award may be registered in the
holder's name or a nominee name at the discretion of the Company and may bear a
legend, in addition to any legend which may be required pursuant to Section 6.6,
indicating that the ownership of the shares of Common Stock represented by such
certificate is subject to the restrictions, terms and conditions of this Plan
and the Agreement relating to the Restricted Stock Award. As determined by the
Committee, all certificates registered in the holder's name shall be deposited
with the Company, together with stock powers or other instruments of assignment
(including a power of attorney), each endorsed in blank with a guarantee of
signature if deemed necessary or appropriate by the Company, which would permit
transfer to the Company of all or a portion of the shares of Common Stock
subject to the Restricted Stock Award in the event such award is forfeited in
whole or in part. Upon termination of any applicable Restriction Period (and the
satisfaction or attainment of applicable Performance Measures), or upon the
grant of a Bonus Stock Award, in each case subject to the Company's right to
require payment of any taxes in accordance with

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Section 6.5, a certificate or certificates evidencing ownership of the requisite
number of shares of Common Stock shall be delivered to the holder of such award.

         (d) Rights with Respect to Restricted Stock Awards. Unless otherwise
set forth in the Agreement relating to a Restricted Stock Award, and subject to
the terms and conditions of the Agreement relating to a Restricted Stock Award,
the holder of such award shall have all rights as a stockholder of the Company,
including, but not limited to, voting rights, the right to receive dividends and
the right to participate in any capital adjustment applicable to all holders of
Common Stock; provided, however, that a distribution with respect to shares of
Common Stock, other than a regular cash dividend, shall be deposited with the
Company and shall be subject to the same restrictions as the shares of Common
Stock with respect to which such distribution was made.

         3.3 TERMINATION OF EMPLOYMENT OR SERVICE. All of the terms relating to
the satisfaction of Performance Measures and the termination of the Restriction
Period relating to a Restricted Stock Award, or any forfeiture and cancellation
of such award upon a termination of employment with or service to the Company of
the recipient of such award, whether by reason of Disability, Retirement, death
or any other reason, shall be determined by the Committee.

                          IV. PERFORMANCE SHARE AWARDS

         4.1 PERFORMANCE SHARE AWARDS. The Committee may, in its discretion,
grant Performance Share Awards to such eligible persons as may be selected by
the Committee.

         4.2 TERMS OF PERFORMANCE SHARE AWARDS. Performance Share Awards shall
be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem advisable.

         (a) Number of Performance Shares and Performance Measures. The number
of Performance Shares subject to any award and the Performance Measures and
Performance Period applicable to such award shall be determined by the
Committee.

         (b) Vesting and Forfeiture. The Agreement relating to a Performance
Share Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of such
award, if specified Performance Measures are satisfied or met during the
specified Performance Period, and for the forfeiture of all or a portion of such
award, if specified Performance Measures are not satisfied or met during the
specified Performance Period.

         (c) Settlement of Vested Performance Share Awards. The Agreement
relating to a Performance Share Award (i) shall specify whether such award may
be settled in shares of Common Stock (including shares of Restricted Stock) or
cash or a combination thereof and (ii) may specify whether the holder thereof
shall be entitled to receive, on a current or deferred basis, dividend
equivalents, and, if determined by the Committee, interest on or the deemed
reinvestment of any deferred dividend equivalents, with respect to the number of
shares of Common Stock subject to such award. If a Performance Share Award is
settled in shares of Restricted Stock, a certificate or certificates
representing such Restricted Stock shall be issued in

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accordance with Section 3.2(c) and the holder of such Restricted Stock shall
have such rights of a stockholder of the Company as determined pursuant to
Section 3.2(d). Prior to the settlement of a Performance Share Award in shares
of Common Stock, including Restricted Stock, the holder of such award shall have
no rights as a stockholder of the Company with respect to the shares of Common
Stock subject to such award.

         4.3 TERMINATION OF EMPLOYMENT OR SERVICE. All of the terms relating to
the satisfaction of Performance Measures and the termination of the Performance
Period relating to a Performance Share Award, or any forfeiture and cancellation
of such award upon a termination of employment with or service to the Company of
the recipient of such award, whether by reason of Disability, Retirement, death
or other termination, shall be determined by the Committee.

                V. PROVISIONS RELATING TO NON-EMPLOYEE DIRECTORS

         5.1 ELIGIBILITY. Each Non-Employee Director shall be granted options to
purchase shares of Common Stock in accordance with this Article V. All options
granted under this Article V shall constitute Non-Statutory Stock Options.

         5.2 AUTOMATIC GRANTS OF STOCK OPTIONS. Each Non-Employee Director shall
automatically be granted Non-Statutory Stock Options as follows:

         (a) Time of Grant. Automatic grants of Non-Statutory Stock Options
shall be made on the dates specified below:

         (1) Each person who is serving as a Non-Employee Director as of January
31, 2000 shall automatically be granted, on such date, an option to purchase
40,000 shares of Common Stock.

         (2) Each person who is first elected or first begins to serve as a
Non-Employee Director after January 31, 2000 other than by reason of termination
of employment shall automatically be granted, on the date of such initial
election or service, an option to purchase 40,000 shares of Common Stock.

         (3) Each person who is a Non-Employee Director immediately following
any annual meeting of stockholders of the Company held after 2000 shall
automatically be granted, on the date of such meeting, an option to purchase
10,000 shares of Common Stock.

         (b) Purchase Price. The purchase price per share of Common Stock
purchasable upon exercise of an option granted under this Section 5.2 shall be
100% of the Fair Market Value of a share of Common Stock on the date of grant of
such option.

         (c) Exercise Period and Exercisability. Each option granted under
Section 5.2(a)(1) or Section 5.2(a)(2) shall be fully exercisable on and after
the one year anniversary of its date of grant and each option granted under
Section 5.2(a)(3) shall be fully exercisable on and after the day preceding the
day of the next annual meeting of stockholders of the Company following its date
of grant. Each option granted under this Section 5.2 shall expire 10 years after
its date of grant. An exercisable option, or portion thereof, may be exercised
in whole or in part only with

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respect to whole shares of Common Stock. Options granted under this Section 5.2
shall be exercisable in accordance with Section 2.1(c).

         5.3 TERMINATION OF DIRECTORSHIP. (a) Disability. If the recipient of an
option granted under Section 5.2 ceases to be a director of the Company by
reason of Disability, each such option held by the holder thereof shall be
exercisable only to the extent such option is exercisable on the effective date
of such recipient's ceasing to be a director and may thereafter be exercised by
such holder (or such holder's legal representative or similar person) until and
including the earlier to occur of the (i) date which is one year after the
effective date of such recipient's ceasing to be a director and (ii) the
expiration date of the term of such option.

         (b) Retirement. If the recipient of an option granted under Section 5.2
ceases to be a director of the Company by reason of Retirement, each such option
held by the holder thereof shall be exercisable only to the extent such option
is exercisable on the effective date of such recipient's ceasing to be a
director and may thereafter be exercised by such holder (or such holder's legal
representative or similar person) until and including the earlier to occur of
the (i) date which is three months after the effective date of such recipient's
ceasing to be a director and (ii) the expiration date of the term of such
option.

         (c) Death. If the recipient of an option granted under Section 5.2
ceases to be a director of the Company by reason of death, each such option held
by the holder thereof shall be exercisable only to the extent such option is
exercisable on the effective date of such recipient's ceasing to be a director
and may thereafter be exercised by such holder's executor, administrator, legal
representative, beneficiary or similar person until and including the earlier to
occur of the (i) date which is one year after the date of such recipient's death
and (ii) the expiration date of the term of such option.

         (d) Other Termination. If the recipient of an option granted under
Section 5.2 ceases to be a director of the Company for any reason other than
Disability, Retirement or death, each such option held by the holder thereof
shall be exercisable only to the extent such option is exercisable on the
effective date of such recipient's ceasing to be a director and may thereafter
be exercised by such holder (or such holder's legal representative or similar
person) until and including the earlier to occur of the (i) date which is three
months after the effective date of such recipient's ceasing to be a director and
(ii) the expiration date of the term of such option.

         (e) Death Following Termination of Directorship. If the recipient of an
option granted under Section 5.2 dies during the period set forth in Section
5.3(a) following such recipient's ceasing to be a director of the Company by
reason of Disability, or if such recipient dies during the period set forth in
Section 5.3(b) following such recipient's Retirement, or if such a recipient
dies during the period set forth in Section 5.3(d) following such recipient's
ceasing to be a director for any reason other than by reason of Disability or
Retirement, each such option held by the holder thereof shall be exercisable
only to the extent that such option is exercisable on the date of the
recipient's death and may thereafter be exercised by such holder's executor,
administrator, legal representative, beneficiary or similar person until and
including the earlier to occur of the

                                       11
<PAGE>   12

(i) date which is one year after the date of such recipient's death and (ii) the
expiration date of the term of such option.

         5.4 DISCRETIONARY GRANTS OF STOCK OPTIONS. The Committee may, in its
discretion, grant additional options to purchase shares of Common Stock
("Discretionary Director Options") to all Non-Employee Directors or to any one
or more of them. Each Discretionary Director Option shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee shall
deem advisable:

         (a) Number of Shares and Purchase Price. The number of shares of Common
Stock subject to a Discretionary Director Option and the purchase price per
share of Common Stock purchasable upon exercise of the option shall be
determined by the Committee; provided, however, that the purchase price per
share of Common Stock purchasable upon exercise of the option shall not be less
than 100% of the Fair Market Value of a share of Common Stock on the date of
grant of such option.

         (b) Exercise Period and Exercisability. The period during which a
Discretionary Director Option may be exercised shall be determined by the
Committee. The Committee may, in its discretion, establish Performance Measures
which shall be satisfied or met as a condition to the grant of a Discretionary
Director Option or to the exercisability of all or a portion of a Discretionary
Director Option. The Committee shall determine whether a Discretionary Director
Option shall become exercisable in cumulative or non-cumulative installments and
in part or in full at any time. An exercisable Director Discretionary Option, or
portion thereof, may be exercised only with respect to whole shares of Common
Stock. Each Discretionary Director Option shall be exercisable in accordance
with Section 2.1(c).

         (c) Termination of Directorship. All of the terms relating to the
exercise, cancellation or other disposition of a Discretionary Director Option
upon a termination of service as a director of the Company of the recipient of a
Discretionary Director Option, whether by reason of Disability, Retirement,
death or any other reason, shall be determined by the Committee.

                                   VI. GENERAL

         6.1 EFFECTIVE DATE AND TERM OF PLAN. This Plan shall be submitted to
the stockholders of the Company for approval within 12 months following its
adoption by the Board and, if approved, shall become effective as of the date of
such adoption by the Board. No option may be exercised prior to the date of such
stockholder approval. This Plan shall terminate 10 years after its effective
date, unless terminated earlier by the Board. Termination of this Plan shall not
affect the terms or conditions of any award granted prior to such termination.

         6.2 AMENDMENTS. The Board may amend this Plan as it shall deem
advisable, subject to any requirement of stockholder approval required by
applicable law, rule or regulation, including Section 422 of the Code; provided,
however, that no amendment shall be made without stockholder approval if such
amendment would (a) increase the maximum number of shares of Common Stock
available under this Plan (subject to Section 6.7), (b) effect any change

                                       12
<PAGE>   13

inconsistent with Section 422 of the Code or (c) extend the term of this Plan.
No amendment may impair the rights of a holder of an outstanding award without
the consent of such holder.

         6.3 AGREEMENT. No award shall be valid until an Agreement is executed
by the Company and the recipient of such award and, upon execution by each party
and delivery of the Agreement to the Company, such award shall be effective as
of the effective date set forth in the Agreement.

         6.4 NON-TRANSFERABILITY OF AWARDS. Unless the Committee provides for
the transferability of a particular award and such transferability is specified
in the Agreement relating to such award, no award shall be transferable other
than by will, the laws of descent and distribution or pursuant to beneficiary
designation procedures stated in Section 6.11 or otherwise approved by the
Company. Except to the extent permitted by the foregoing sentence or the
Agreement relating to the Award, each award may be exercised or settled during
the recipient's lifetime only by the recipient or the recipient's legal
representative or similar person. Except to the extent permitted by the second
preceding sentence or the Agreement relating to the Award, no award may be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to so sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of any such award, such award
and all rights thereunder shall immediately become null and void.

         6.5 TAX WITHHOLDING. The Company shall have the right to require, prior
to the issuance or delivery of any shares of Common Stock or the payment of any
cash pursuant to an award made hereunder, payment by the holder of such award of
any federal, state, local or other taxes which may be required to be withheld or
paid in connection with such award. An Agreement may provide that (i) the
Company shall withhold whole shares of Common Stock which would otherwise be
delivered to a holder, having an aggregate Fair Market Value determined as of
the date the obligation to withhold or pay taxes arises in connection with an
award (the "Tax Date"), or withhold an amount of cash which would otherwise be
payable to a holder, in the amount necessary to satisfy any such obligation or
(ii) the holder may satisfy any such obligation by any of the following means:
(A) a cash payment to the Company, (B) delivery (either actual delivery or by
attestation procedures established by the Company) to the Company of Mature
Shares having an aggregate Fair Market Value, determined as of the Tax Date,
equal to the amount necessary to satisfy any such obligation, (C) authorizing
the Company to withhold whole shares of Common Stock which would otherwise be
delivered having an aggregate Fair Market Value, determined as of the Tax Date,
or withhold an amount of cash which would otherwise be payable to a holder,
equal to the amount necessary to satisfy any such obligation, (D) in the case of
the exercise of an option, a cash payment by a broker-dealer acceptable to the
Company to whom the optionee has submitted an irrevocable notice of exercise or
(E) any combination of (A), (B) and (C), in each case to the extent set forth in
the Agreement relating to the award; provided, however, that the Company shall
have sole discretion to disapprove of an election pursuant to any of clauses
(ii)(B)-(E). Any fraction of a share of Common Stock which would be required to
satisfy such an obligation shall be disregarded and the remaining amount due
shall be paid in cash by the holder.

                                       13
<PAGE>   14

         6.6 RESTRICTIONS ON SHARES. Each award made hereunder shall be subject
to the requirement that if at any time the Company determines that the listing,
registration or qualification of the shares of Common Stock subject to such
award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the exercise or settlement
of such award or the delivery of shares thereunder, such award shall not be
exercised or settled and such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Committee may provide for such restrictions upon the transferability of shares
of Common Stock delivered pursuant to any award made hereunder as it deems
appropriate and such restrictions shall be specified in the Agreement relating
to such award. The Company may require that certificates evidencing shares of
Common Stock delivered pursuant to any award made hereunder bear a legend
indicating that the sale, transfer or other disposition thereof by the holder is
prohibited except in compliance with the Securities Act of 1933, as amended, and
the rules and regulations thereunder and such other restrictions, if any,
specified in the Agreement relating to the award pursuant to which such shares
were delivered.

         6.7 ADJUSTMENT. In the event of any stock split, reverse stock split,
stock dividend, recapitalization, reorganization, merger, consolidation,
combination, exchange of shares, liquidation, spin-off or other similar change
in capitalization or event, or any distribution to holders of Common Stock other
than a regular cash dividend, the number and class of securities available under
this Plan, the maximum number of shares available for Stock Awards and
Performance Share Awards, the number and class of securities subject to each
outstanding option and the purchase price per security, the number and class of
securities subject to each option to be granted to Non-Employee Directors
pursuant to Section 5.2, the terms of each outstanding SAR, the number and class
of securities subject to each outstanding Stock Award or Performance Share
Award, and the terms of each outstanding Restricted Stock Award or Performance
Share Award shall be appropriately adjusted by the Committee, such adjustments
to be made in the case of outstanding options and SARs without an increase in
the aggregate purchase price or base price. The decision of the Committee
regarding any such adjustment shall be final, binding and conclusive. If any
such adjustment would result in a fractional security being (a) available under
this Plan, such fractional security shall be disregarded, or (b) subject to an
award under this Plan, the Company shall pay the holder of such award, in
connection with the first vesting, exercise or settlement of such award in whole
or in part occurring after such adjustment, an amount in cash determined by
multiplying (i) the fraction of such security (rounded to the nearest hundredth)
by (ii) the excess, if any, of (A) the Fair Market Value on the vesting,
exercise or settlement date over (B) the exercise or base price, if any, of such
award.

         6.8 CHANGE IN CONTROL.

         (a) (1) Notwithstanding any provision in this Plan or any Agreement, in
the event of a Change in Control in connection with which the holders of Common
Stock receive shares of common stock that are registered under Section 12 of the
Exchange Act, (i) all outstanding options and SARS shall immediately become
exercisable in full, (ii) the Restriction Period applicable to any outstanding
Restricted Stock Award shall lapse, (iii) the Performance Period applicable to
any outstanding Performance Share Award shall lapse, (iv) the Performance
Measures applicable to any outstanding award shall be deemed to be satisfied at
the maximum

                                       14
<PAGE>   15

level and (v) there shall be substituted for each share of Common Stock
available under this Plan, whether or not then subject to an outstanding award,
the number and class of shares into which each outstanding share of Common Stock
shall be converted pursuant to such Change in Control. In the event of any such
substitution, the purchase price per share in the case of an option and the base
price in the case of an SAR shall be appropriately adjusted by the Committee
(whose determination shall be final, binding and conclusive), such adjustments
to be made in the case of outstanding options and SARs without an increase in
the aggregate purchase price or base price.

         (2) Notwithstanding any provision in this Plan or any Agreement, in the
event of any Change in Control other than a Change in Control in connection with
which the holders of Common Stock receive shares of common stock that are
registered under Section 12 of the Exchange Act, each outstanding award shall be
surrendered to the Company by the holder thereof, and each such award shall
immediately be cancelled by the Company, and the holder shall receive, within
ten days of the occurrence of a Change in Control, a cash payment from the
Company in an amount equal to (i) in the case of an option, the number of shares
of Common Stock then subject to such option, multiplied by the excess, if any,
of the greater of (A) the highest per share price offered to stockholders of the
Company in any transaction whereby the Change in Control takes place or (B) the
Fair Market Value of a share of Common Stock on the date of occurrence of the
Change in Control, over the purchase price per share of Common Stock subject to
the option, (ii) in the case of a Free-Standing SAR, the number of shares of
Common Stock then subject to such SAR, multiplied by the excess, if any, of the
greater of (A) the highest per share price offered to stockholders of the
Company in any transaction whereby the Change in Control takes place or (B) the
Fair Market Value of a share of Common Stock on the date of occurrence of the
Change in Control, over the base price of the SAR, (iii) in the case of a
Restricted Stock Award or Performance Share Award, the number of shares of
Common Stock or the number of Performance Shares, as the case may be, then
subject to such award, multiplied by the greater of (A) the highest per share
price offered to stockholders of the Company in any transaction whereby the
Change in Control takes place or (B) the Fair Market Value of a share of Common
Stock on the date of occurrence of the Change in Control. In the event of such a
Change in Control, each Tandem SAR shall be surrendered by the holder thereof
and shall be cancelled simultaneously with the cancellation of the related
option. The Company may, but is not required to, cooperate with any person who
is subject to Section 16 of the Exchange Act to assure that any cash payment in
accordance with the foregoing to such person is made in compliance with Section
16 and the rules and regulations thereunder.

         (b) "Change in Control" shall mean:

         (1) a sale or transfer of all or substantially all of the assets of the
Company on a consolidated basis in any transaction or series of related
transactions;

         (2) any merger, consolidation or reorganization to which the Company is
a party, except for a merger, consolidation or reorganization in which the
Company is the surviving corporation and, after giving effect to such merger,
consolidation or reorganization, the holders of the Company's outstanding equity
(on a fully diluted basis) immediately prior to the merger, consolidation or
reorganization will own in the aggregate immediately following the merger,
consolidation or reorganization the Company's outstanding equity (on a fully
diluted basis)

                                       15
<PAGE>   16

either (i) having the ordinary voting power to elect a majority of the members
of the Company's board of directors to be elected by the holders of Common Stock
and any other class which votes together with the Common Stock as a single class
or (ii) representing at least 50% of the equity value of the Company as
reasonably determined by the Board;

         (3) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
such Board; provided, however, that any individual who becomes a director of the
Company subsequent to the date hereof whose election, or nomination for election
by the holders of the Company's equity, was approved by the vote of at least a
majority of the directors then comprising the Incumbent Board shall be deemed to
have been a member of the Incumbent Board; and provided further, that no
individual who was initially elected as a director of the Company as a result of
an actual or threatened election contest, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any
individual, entity or group (a "Person"), including any "person" within the
meaning of Section 13(d) of the Exchange Act, other than the Board shall be
deemed to have been a member of the Incumbent Board; or

         (4) any Person other than KPMG LLP or its affiliates, acquires
beneficial ownership of 30% or more of the outstanding equity of the Company
generally entitled to vote on the election of directors.

         6.9 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall have any
right to participate in this Plan. Neither this Plan nor any award made
hereunder shall confer upon any person any right to continued employment by the
Company, any Subsidiary or any affiliate of the Company or affect in any manner
the right of the Company, any Subsidiary or any affiliate of the Company to
terminate the employment of any person at any time without liability hereunder.

         6.10 RIGHTS AS STOCKHOLDER. No person shall have any right as a
stockholder of the Company with respect to any shares of Common Stock or other
equity security of the Company which is subject to an award hereunder unless and
until such person becomes a stockholder of record with respect to such shares of
Common Stock or equity security.

         6.11 DESIGNATION OF BENEFICIARY. If permitted by the Company, a holder
of an award may file with the Committee a written designation of one or more
persons as such holder's beneficiary or beneficiaries (both primary and
contingent) in the event of the holder's death. To the extent an outstanding
option or SAR granted hereunder is exercisable, such beneficiary or
beneficiaries shall be entitled to exercise such option or SAR. Each beneficiary
designation shall become effective only when filed in writing with the Committee
during the holder's lifetime on a form prescribed by the Committee. The spouse
of a married holder domiciled in a community property jurisdiction shall join in
any designation of a beneficiary other than such spouse. The filing with the
Committee of a new beneficiary designation shall cancel all previously filed
beneficiary designations. If a holder fails to designate a beneficiary, or if
all designated beneficiaries of a holder predecease the holder, then each
outstanding option and SAR hereunder held by such holder, to the extent
exercisable, may be exercised by such holder's executor, administrator, legal
representative or similar person.

                                       16
<PAGE>   17

         6.12 GOVERNING LAW. This Plan, each award hereunder and the related
Agreement, and all determinations made and actions taken pursuant thereto, to
the 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 in
accordance therewith without giving effect to principles of conflicts of laws.

         6.13 GRANTING AWARDS TO FOREIGN PERSONS. Without the amendment of this
Plan, the Committee may grant awards to persons designated by the Committee from
time to time, who provide services, directly or indirectly, to the Company or
any of its Subsidiaries and who are subject to the laws of foreign countries or
jurisdictions. The Committee may grant awards to such persons on such terms and
conditions different from those specified in this Plan as may in the judgment of
the Committee be necessary or desirable to foster and promote achievement of the
purposes of this Plan and, in furtherance of such purposes the Committee may
make such modifications, amendments, procedures, subplans and the like as may be
necessary or advisable to comply with provisions of laws of other countries or
jurisdictions in which the Company or its Subsidiaries operate or have employees
or other persons providing services.

         6.14 ADDITIONAL PROVISIONS APPLICABLE TO OPTIONS GRANTED PRIOR TO IPO.
In order to comply with certain requirements of the California Corporate
Securities Law of 1968, as amended, this Section shall apply to options granted
under this Plan prior to an IPO (a "Pre-IPO Option"). The terms set forth in the
Agreements pursuant to which Pre-IPO Options are granted on January 31, 2000
(the "January 31, 2000 Options") relating to (i) the period during which an
option may be exercised, (ii) the exercise, cancellation or other disposition of
an option upon a termination of employment with the Company of the recipient of
such option, whether by reason of Disability, Retirement, death or any other
reason, (iii) restrictions on the transferability of an option and (iv) the
providing of annual financial statements to the holder of an option are hereby
incorporated into this Plan by reference as if set forth herein verbatim and
shall apply in all respects only to all Pre-IPO Options granted to eligible
persons; provided, however, that Pre-IPO Options may be granted under this Plan
having exercise periods different from those of the January 31, 2000 Options so
long as each such Pre-IPO Option becomes exercisable at a rate of at least 20%
per year during the five-year period commencing on the date of grant of such
Pre-IPO Option.

                                       17
<PAGE>   18
[INSERT DATE]

[NAME AND ADDRESS OF OPTIONEE]

                           Re:      Award Notice of Stock Option Grant

Dear [NAME OF OPTIONEE]:

We are pleased to notify you that in recognition of your contributions toward
the future success of KPMG Consulting, Inc., you have been awarded an option to
purchase shares of common stock of KPMG Consulting, Inc.
(the "Company").  Certain terms of your award follow:

Option:                    You have been awarded a non-statutory stock option to
                           purchase from the Company [INSERT NUMBER] shares of
                           its common stock, $0.01 par value, subject to
                           adjustment, as provided in Section 3.4 of the KPMG
                           Consulting, Inc. Stock Option Agreement for Employees
                           (the "Agreement").

Option Date:               January 31, 2000

Exercise Price:            [INSERT PRICE] per share, subject to adjustment, as
                           provided in Section 3.4 of the Agreement.

Exercise Schedule:         Except as otherwise provided in Section 2.2 of the
                           Agreement and in Section 6.8 of the KPMG Consulting,
                           Inc. 2000 Long-Term Incentive Plan (the "Plan"), the
                           Option shall become exercisable (i) on the first
                           anniversary of the Option Date with respect to 25% of
                           the number of shares subject thereto on the Option
                           Date, (ii) on the second anniversary of the Option
                           Date with respect to an additional 25% of the number
                           of shares subject thereto on the Option Date, (iii)
                           on the third anniversary of the Option Date with
                           respect to an additional 25% of the number of shares
                           subject thereto on the Option Date and (iv) on the
                           fourth anniversary of the Option Date with respect to
                           the remaining 25% of the number of shares subject
                           thereto on the Option Date.

Expiration Date:           Except to the extent earlier terminated pursuant
                           to Section 2.2 or 2.5 of the Agreement or
                           earlier exercised pursuant to Section 2.3 of the
                           Agreement, the Option shall terminate at 5:00 p.m.,
                           New York time, on January 30, 2010.

In addition to the terms stated in this Award Notice, the Option shall be
subject to the terms and conditions of the Agreement and the Plan, copies of
which are attached hereto.

<PAGE>   19
We congratulate you on this recognition of your importance to our organization
and its future.

                                             KPMG CONSULTING, INC.

                                             By:
                                                --------------------------------
                                             Name:
                                             Title:

Acknowledgment, Acceptance and Agreement:

By signing below and returning this Award Notice to KPMG Consulting, Inc., c/o
Morgan Stanley Dean Witter at the address stated herein, I hereby acknowledge
receipt of the Agreement and the Plan, accept the Option granted to me and agree
to be bound by the terms and conditions of this Award Notice, the Agreement and
the Plan.

------------------------------              ----------------------
Optionee                                    Date

                                       2
<PAGE>   20

                           CONSULTING/QUALIFIED FORM

                                       #1

<PAGE>   21

                              KPMG CONSULTING, INC.

                             STOCK OPTION AGREEMENT

                                  FOR EMPLOYEES

               KPMG Consulting, Inc., a Delaware corporation (the "Company"),
hereby grants to the individual (the "Optionee") named in the award notice
attached hereto (the "Award Notice") as of the date set forth in the Award
Notice (the "Option Date"), pursuant to the provisions of the KPMG Consulting,
Inc. 2000 Long-Term Incentive Plan (the "Plan"), a non-statutory stock option to
purchase from the Company the number of shares of its common stock, $0.01 par
value ("Stock"), set forth in the Award Notice (the "Option"), at the price per
share set forth in the Award Notice, upon and subject to the terms and
conditions set forth below, in the Award Notice and in the Plan. Capitalized
terms not defined herein shall have the meanings specified in the Plan.

               1.      Option Subject to Acceptance of Agreement. The Option
shall be null and void unless the Optionee shall accept this Agreement by
executing the Award Notice in the space provided therefore and returning an
original execution copy of the Award Notice to the Company.

               2.      Time and Manner of Exercise of Option.

               2.1.    Maximum Term of Option. In no event may the Option be
exercised, in whole or in part, after the expiration date set forth in the Award
Notice (the "Expiration Date").

               2.2.    Exercise of Option. (a) The Option shall become
exercisable in accordance with the exercise schedule set forth in the Award
Notice (the "Exercise Schedule").

               (b) If the Optionee's employment with the Company terminates
by reason of Disability, the Option shall be exercisable only to the extent it
is exercisable on the effective date of the Optionee's termination of employment
and may thereafter be exercised by the Optionee or the Optionee's Legal
Representative until and including the earlier to occur of (i) the date which is
one year after the effective date of the Optionee's termination of employment
and (ii) the Expiration Date.

               (c) If the Optionee's employment with the Company terminates
by reason of Retirement, the Option shall be exercisable only to the extent it
is exercisable on the effective date of the Optionee's termination of employment
and may thereafter be exercised by the Optionee or the Optionee's Legal
Representative until and including the earlier to occur of (i) the date which is
three months after the effective date of the Optionee's termination of
employment and (ii) the Expiration Date.

               (d) If the Optionee's employment with the Company terminates
by reason of death, the Option shall be exercisable only to the extent it is
exercisable on the date of death and may thereafter be exercised by the
Optionee's Legal Representative or Permitted Transferees, as

                                       2

<PAGE>   22

the case may be, until and including the earlier to occur of (i) the date which
is one year after the date of death and (ii) the Expiration Date.

               (e) If the Optionee's employment with the Company terminates
for any reason other than Disability, Retirement or death, the Option shall be
exercisable only to the extent it is exercisable on the effective date of the
Optionee's termination of employment and may thereafter be exercised by the
Optionee or the Optionee's Legal Representative until and including the earlier
to occur of (i) the date which is three months after the effective date of the
Optionee's termination of employment and (ii) the Expiration Date.

               (f) If the Optionee dies during the period set forth in
Section 2.2(b) following termination of employment by reason of Disability, or
if the Optionee dies during the period set forth in Section 2.2(c) following
termination of employment by reason of Retirement, or if the Optionee dies
during the period set forth in Section 2.2(e) following termination of
employment for any reason other than Disability or Retirement, the Option shall
be exercisable only to the extent it is exercisable on the date of death and may
thereafter be exercised by the Optionee's Legal Representative or Permitted
Transferees, as the case may be, until and including the earlier to occur of (i)
the date which is one year after the date of death and (ii) the Expiration Date.

               (g) Notwithstanding Sections 2.1 and 2.4 and the exercise
periods set forth in the Award Notice and in subsections (b), (c), (d), (e) and
(f) of this Section 2.2, in the event the Company is involved in a business
combination, including a business combination which is intended to be treated as
a pooling of interests for financial accounting purposes (a "Pooling
Transaction"), in connection with which the Optionee receives a substitute
option to purchase securities of any entity, including an entity directly or
indirectly acquiring the Company:

               (1) if the acquisition of the substitute option by the
         Optionee may be treated as a purchase for purposes of Section 16(b) of
         the Exchange Act and the Optionee's employment with the Company is
         terminated for any reason during the nine-month period beginning three
         months prior to the consummation of such business combination, then the
         Option (or option in substitution thereof) shall be exercisable to the
         extent set forth in the Award Notice and above in this Section 2.2
         until and including the latest to occur of (i) the date determined
         pursuant to the then applicable subsection (b), (c), (d), (e) or (f) of
         this Section 2.2, (ii) the date which is seven months after the
         consummation of such business combination and (iii) the Expiration
         Date; or

               (2) if the Optionee is restricted from disposing of a security
         (or security underlying a security) issued in connection with the
         Pooling Transaction and the purpose of such restriction is to ensure
         that the Pooling Transaction is accounted for as a pooling of interests
         (the "Pooling Restriction") and the Optionee's employment with the
         Company is terminated for any reason during the nine-month period
         beginning three months prior to the consummation of such business
         combination, then the Option (or option in substitution thereof) shall
         be exercisable to the extent set forth in the Award Notice and above in
         this Section 2.2 until and including the latest to occur of (i) the
         date determined pursuant to the then applicable subsection (b), (c),
         (d), (e) or (f) of this Section 2.2, (ii) the date which is one month
         after the date of expiration of the Pooling Restriction and (iii) the
         Expiration Date.

                                       3

<PAGE>   23

               2.3.    Method of Exercise. Subject to the limitations set forth
in this Agreement, the Option may be exercised by the Optionee (a) by giving
written notice to the Company specifying the number of whole shares of Stock to
be purchased and by accompanying such notice with payment therefor in full (or
by arranging for such payment to the Company's satisfaction) either (i) in cash,
(ii) by delivery to the Company (either actual delivery or by attestation
procedures established by the Company) of Mature Shares having an aggregate Fair
Market Value, determined as of the date of exercise, equal to the aggregate
purchase price payable pursuant to the Option by reason of such exercise, (iii)
in cash by a broker-dealer acceptable to the Company to whom the Optionee has
submitted an irrevocable notice of exercise or (iv) by a combination of (i) and
(ii), and (b) by executing such documents as the Company may reasonably request.
The Company shall have sole discretion to disapprove of an election pursuant to
any of clauses (ii) - (iv). Any fraction of a share of Stock which would be
required to pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the Optionee. No certificate representing a
share of Stock shall be delivered until the full purchase price therefor and any
withholding taxes thereon, as described in Section 3.3, have been paid.

               2.4.    Termination of Option. (a) Subject to Section 2.2(g), in
no event may the Option be exercised after it terminates as set forth in this
Section 2.4. The Option shall terminate, to the extent not earlier terminated
pursuant to Sections 2.2 or 2.5 or exercised pursuant to Section 2.3, on the
Expiration Date.

               (b) In the event that rights to purchase all or a portion of
the shares of Stock subject to the Option expire or are exercised, cancelled or
forfeited, the Optionee shall, upon the Company's request, promptly return this
Agreement to the Company for full or partial cancellation, as the case may be;
provided, however, that such cancellation shall be effective regardless of
whether the Optionee returns this Agreement. If the Optionee continues to have
rights to purchase shares of Stock hereunder, the Company shall, within 10 days
of the Optionee's delivery of this Agreement to the Company, either (i) mark
this Agreement to indicate the extent to which the Option has expired or been
exercised, cancelled or forfeited or (ii) issue to the Optionee a substitute
option agreement applicable to such rights, which agreement shall otherwise be
substantially similar to this Agreement in form and substance.

               2.5.    Termination of Option and Forfeiture of Option Gain.  (a)
  If the Optionee:

               (1) breaches (i) any of the provisions of Sections 8.1(a) and
(b), 8.2, 8.5, 8.6 and 8.7(a) of the Member Distribution Agreement by and among
KPMG Consulting, LLC, KPMG Consulting, Inc., KPMG LLP and the Optionee while any
such provisions remain in full force and effect or (ii) any other covenants
concerning noncompetition or nonsolicitation of clients, prospective clients or
personnel of the Company and its affiliates to which the Optionee may become a
party in the future; or

               (2) directly or indirectly engages in any activity which is
contrary, inimical or harmful to the interests of the Company, including but not
limited to (i) violations of Company policies to the extent then applicable to
the Optionee, including the Company's insider trading policies, and (ii)
participation in any activity not approved by the Board which could reasonably
be foreseen as contributing to or resulting in a Change in Control of the
Company,

                                       4

<PAGE>   24

then, in addition to and without in any way limiting any remedies under the
aforementioned Member Distribution Agreement or otherwise and any other provable
damages, the Option shall terminate automatically (if not previously terminated)
on the date the Optionee commits such breach or engages in such activity and the
Optionee shall pay the Company, within five business days of receipt by the
Optionee of a written demand therefor, an amount in cash determined by
multiplying the number of shares of Stock purchased pursuant to each exercise of
the Option occurring within three months prior to the date the Optionee commits
such breach or engages in such activity (without reduction for any shares of
Stock delivered by the Optionee or withheld by the Company pursuant to Section
2.3 or Section 3.3) by the difference between (i) the Fair Market Value of a
share of Stock on the date of such exercise and (ii) the purchase price per
share of Stock set forth in the Award Notice.

               (b) The Optionee may be released from the Optionee's
obligations under Section 2.5(a) only if and to the extent the Committee
determines in its sole discretion that such a release is in the best interests
of the Company.

               (c) The Optionee agrees that by executing the Award Notice the
Optionee authorizes the Company and its Subsidiaries to deduct any amount or
amounts owed by the Optionee pursuant to Section 2.5(a) from any amounts payable
by the Company or any Subsidiary to the Optionee, including, without limitation,
any amount payable to the Optionee as salary, wages, vacation pay or bonus. This
right of setoff shall not be an exclusive remedy and the Company's or a
Subsidiary's election not to exercise this right of setoff with respect to any
amount payable to the Optionee shall not constitute a waiver of this right of
setoff with respect to any other amount payable to the Optionee or any other
remedy.

               3.    Additional Terms and Conditions of Option.

               3.1.  Nontransferability of Option; Restriction on Transfer of
Stock. (a) The Option may not be transferred by the Optionee other than by will
or the laws of descent and distribution or pursuant to beneficiary designation
procedures approved by the Company. Except to the extent permitted by the
foregoing sentence, during the Optionee's lifetime the Option is exercisable
only by the Optionee or the Optionee's Legal Representative. Except to the
extent permitted by the second preceding sentence, the Option may not be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to so sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of the Option, the Option and
all rights hereunder shall immediately become null and void.

               (b) The shares of Stock purchased upon exercise of the Option
may not be transferred by the Optionee prior to the termination of the Lock-Up
Period other than by will or the laws of descent and distribution or pursuant to
beneficiary designation procedures approved by the Company. Except to the extent
permitted by the foregoing sentence, prior to the termination of the Lock-Up
Period the shares of Stock purchased upon exercise of the Option may not be
sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise
disposed of (whether by operation of law or otherwise) or be subject to
execution, attachment or similar process.

                                       5

<PAGE>   25

               3.2.    Investment Representation. The Optionee hereby represents
and covenants that (a) any shares of Stock purchased upon exercise of the Option
will be purchased for investment and not with a view to the distribution thereof
within the meaning of the Securities Act unless such purchase has been
registered under the Securities Act and any applicable state securities laws;
(b) any subsequent sale of any such shares shall be made in compliance with
Section 3.1(b) either pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, or pursuant to an
exemption from registration under the Securities Act and such state securities
laws; and (c) if requested by the Company, the Optionee shall submit a written
statement, in a form satisfactory to the Company, to the effect that such
representation (x) is true and correct as of the date of any purchase of any
shares hereunder or (y) is true and correct as of the date of any sale of any
such shares, as applicable. As a further condition precedent to any exercise of
the Option, the Optionee shall comply with all regulations and requirements of
any regulatory authority having control of or supervision over the issuance or
delivery of the shares and, in connection therewith, shall execute any documents
which the Board or the Committee shall in its sole discretion deem necessary or
advisable.

               3.3.    Withholding Taxes. (a) As a condition precedent to the
delivery of Stock upon exercise of the Option, the Optionee shall, upon request
by the Company, pay to the Company in addition to the purchase price of the
shares, such amount as the Company may be required, under all applicable
federal, state, local or other laws or regulations, to withhold and pay over as
income or other withholding taxes (the "Required Tax Payments") with respect to
such exercise of the Option. If the Optionee shall fail to advance the Required
Tax Payments after request by the Company, the Company may, in its discretion,
deduct any Required Tax Payments from any amount then or thereafter payable by
the Company to the Optionee.

               (b) The Optionee may elect to satisfy his or her obligation to
advance the Required Tax Payments by any of the following means: (1) a cash
payment to the Company, (2) delivery to the Company (either actual delivery or
by attestation procedures established by the Company) of Mature Shares having an
aggregate Fair Market Value, determined as of the Tax Date, equal to the
Required Tax Payments, (3) authorizing the Company to withhold whole shares of
Stock which would otherwise be delivered to the Optionee upon exercise of the
Option having an aggregate Fair Market Value, determined as of the Tax Date,
equal to the Required Tax Payments, (4) a cash payment by a broker-dealer
acceptable to the Company to whom the Optionee has submitted an irrevocable
notice of exercise or (5) any combination of (1), (2) and (3). The Company shall
have sole discretion to disapprove of an election pursuant to any of clauses (2)
- (5). Shares of Stock to be delivered or withheld may not have a Fair Market
Value in excess of the minimum amount of the Required Tax Payments. Any fraction
of a share of Stock which would be required to satisfy any such obligation shall
be disregarded and the remaining amount due shall be paid in cash by the
Optionee. No certificate representing a share of Stock shall be delivered until
the Required Tax Payments have been satisfied in full.

               3.4.    Adjustment. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off or other
similar change in capitalization or event, or any distribution to holders of
Stock other than a regular cash dividend, the number and class of securities
subject to the Option and the purchase price per security shall be appropriately
adjusted by the Committee without an increase in the aggregate purchase price.
If any adjustment would result

                                       6

<PAGE>   26

in a fractional security being subject to the Option, the Company shall pay the
Optionee, in connection with the first exercise of the Option occurring after
such adjustment, an amount in cash determined by multiplying (i) the fraction of
such security (rounded to the nearest hundredth) by (ii) the excess, if any, of
(A) the Fair Market Value on the exercise date over (B) the exercise price of
the Option. The decision of the Committee regarding any such adjustment shall be
final, binding and conclusive.

               3.5.    Compliance with Applicable Law. The Option is subject to
the condition that if the listing, registration or qualification of the shares
subject to the Option upon any securities exchange or under any law, or the
consent or approval of any governmental body, or the taking of any other action
is necessary or desirable as a condition of, or in connection with, the purchase
or delivery of shares hereunder, the Option may not be exercised, in whole or in
part, and such shares may not be delivered, unless such listing, registration,
qualification, consent, approval or other action shall have been effected or
obtained, free of any conditions not acceptable to the Company. The Company
agrees to use reasonable efforts to effect or obtain any such listing,
registration, qualification, consent, approval or other action.

               3.6.    Delivery of Certificates. Upon the exercise of the
Option, in whole or in part, the Company shall deliver or cause to be delivered,
subject to the conditions of this Article 3, one or more certificates
representing the number of shares purchased against full payment therefor. The
Company shall pay all original issue or transfer taxes and all fees and expenses
incident to such delivery, except as otherwise provided in Section 3.3.

               3.7.    Option Confers No Rights as Stockholder. The Optionee
shall not be entitled to any privileges of ownership with respect to shares of
Stock subject to the Option unless and until such shares are purchased and
delivered upon the exercise of the Option, in whole or in part, and the Optionee
becomes a stockholder of record with respect to such delivered shares. The
Optionee shall not be considered a stockholder of the Company with respect to
any such shares not so purchased and delivered.

               3.8.    Option Confers No Rights to Continued Employment. In no
event shall the granting of the Option or its acceptance by the Optionee, or any
provision of this Agreement or the Plan, give or be deemed to give the Optionee
any right to continued employment by the Company or any affiliate of the
Company.

               3.9.    Decisions of Board or Committee. The Board or the
Committee shall have the right to resolve all questions which may arise in
connection with the Option or its exercise. Any interpretation, determination or
other action made or taken by the Board or the Committee regarding the Plan or
this Agreement shall be final, binding and conclusive.

               3.10.   Company to Reserve Shares. The Company shall at all
times prior to the expiration or termination of the Option reserve and keep
available, either in its treasury or out of its authorized but unissued shares
of Stock, the full number of shares of Stock subject to the Option from time to
time.

               3.11.   Agreement Subject to Plan. This Agreement is subject to
the provisions of the Plan, including Section 6.8 relating to a Change in
Control, and shall be interpreted in accordance therewith. The Optionee hereby
acknowledges receipt of a copy of the Plan.

                                       7

<PAGE>   27

               4.      Miscellaneous Provisions.

               4.1.    Designation as Non-Statutory Stock Option. The Option is
hereby designated as not constituting an Incentive Stock Option. This Agreement
shall be interpreted and treated consistently with such designation.

               4.2.    Meaning of Certain Terms. (a) As used herein, employment
by the Company shall include employment by a Subsidiary.

               (b) As used herein, the following terms shall have the
meanings set forth below:

               "Legal Representative" shall include an executor,
         administrator, legal representative, guardian or similar person.

               "Lock-Up Period" shall mean the period required by the
         underwriters of an IPO following an IPO during which individuals
         holding shares of Common Stock shall be prohibited from selling,
         offering, contracting to sell or otherwise transferring or disposing of
         such shares of Common Stock, directly or indirectly.

               "Securities Act" shall mean the Securities Act of 1933, as
         amended, and the rules and regulations thereunder.

               "Permitted Transferee" shall include any transferee designated
         as the Optionee's beneficiary in the event of the Optionee's death
         pursuant to beneficiary designation procedures approved by the Company.

               4.3.    Successors. This Agreement shall be binding upon and
inure to the benefit of any successor or successors of the Company and any
person or persons who shall, upon the death of the Optionee, acquire any rights
hereunder in accordance with this Agreement or the Plan.

               4.4.    Notices. All notices, requests or other communications
provided for in this Agreement shall be made, if to the Company, to KPMG
Consulting, Inc., c/o Morgan Stanley Dean Witter, Stock Plan Administration,
Harborside Financial Center, Plaza Two, 7th Floor, Jersey City, NJ 07311 and if
to the Optionee, to the last known mailing address of the Optionee contained in
the records of the Company. All notices, requests or other communications
provided for in this Agreement shall be made in writing either (a) by personal
delivery, (b) by facsimile with confirmation of receipt, (c) by mailing in the
United States mails or (d) by express courier service. The notice, request or
other communication shall be deemed to be received upon personal delivery, upon
confirmation of receipt of facsimile transmission or upon receipt by the party
entitled thereto if by United States mail or express courier service; provided,
however, that if a notice, request or other communication sent to the Company is
not received during regular business hours, it shall be deemed to be received on
the next succeeding business day of the Company.

               4.5.    Governing Law. This Agreement, the Option and all
determinations made and actions taken pursuant hereto and thereto, to the extent
not governed by the Code or the laws of the United States, shall be governed by
the laws of the State of Delaware and construed in accordance therewith without
giving effect to principles of conflicts of laws.

                                       8

<PAGE>   28

               4.6.   Counterparts. This Award Notice may be executed in two
counterparts, each of which shall be deemed an original and both of which
together shall constitute one and the same instrument.

               4.7.   Information to Optionees. Prior to the IPO, the Company
shall provide to the Optionee, at least annually, copies of annual financial
statements required to be provided under Rule 260.140.46 of the California
Corporate Securities Law of 1968, as amended. The Company shall not be required
to provide such statements to key employees whose duties in connection with the
Company assure their access to equivalent information.

                                       9
<PAGE>   29
[INSERT DATE]

[NAME AND ADDRESS OF OPTIONEE]

                 Re: Award Notice of Initial Stock Option Grant

Dear [NAME OF OPTIONEE]:

We are pleased to notify you that in recognition of your contributions toward
the future success of KPMG Consulting, Inc., you have been awarded an option to
purchase shares of common stock of KPMG Consulting, Inc.
(the "Company").  Certain terms of your award follow:

Option:                    You have been awarded a non-statutory stock option to
                           purchase from the Company 40,000 shares of its common
                           stock, $0.01 par value, subject to adjustment, as
                           provided in Section 3.3 of the KPMG Consulting, Inc.
                           Stock Option Agreement for Non-Employee Directors
                           (the "Agreement").

Option Date:               January 31, 2000

Exercise Price:            [INSERT PRICE] per share, subject to adjustment, as
                           provided in Section 3.3 of the Agreement.

Exercise Schedule:         Except as otherwise provided in Section 2.2 of the
                           Agreement and in Section 6.8 of the KPMG Consulting,
                           Inc. 2000 Long-Term Incentive Plan (the "Plan"), the
                           Option shall become fully exercisable on and after
                           the one year anniversary of the Option Date.

Expiration Date:           Except to the extent earlier terminated pursuant to
                           Section 2.2 of the Agreement or earlier exercised
                           pursuant to Section 2.3 of the Agreement, the Option
                           shall terminate on the tenth anniversary of the
                           Option Date.

In addition to the terms stated in this Award Notice, the Option shall be
subject to the terms and conditions of the Agreement and the Plan, copies of
which are attached hereto.

<PAGE>   30

We congratulate you on this recognition of your importance to our organization
and its future.

                                        KPMG CONSULTING, INC.

                                        By:
                                           -------------------------------
                                        Name:
                                        Title:

Acknowledgment, Acceptance and Agreement:

By signing below and returning this Award Notice to KPMG Consulting, Inc., c/o
Morgan Stanley Dean Witter, at the address stated herein, I hereby acknowledge
receipt of the Agreement and the Plan, accept the Option granted to me and agree
to be bound by the terms and conditions of this Award Notice, the Agreement and
the Plan.

------------------------------                       ----------------------
Optionee                                                      Date

                                       2
<PAGE>   31

                              KPMG CONSULTING, INC.

                             STOCK OPTION AGREEMENT

                           FOR NON-EMPLOYEE DIRECTORS

                  KPMG Consulting, Inc., a Delaware corporation (the "Company"),
hereby grants to the individual (the "Optionee") named in the award notice
attached hereto (the "Award Notice") as of the date set forth in the Award
Notice (the "Option Date"), pursuant to the provisions of the KPMG Consulting,
Inc. 2000 Long-Term Incentive Plan (the "Plan"), a non-statutory stock option to
purchase from the Company the number of shares of its common stock, $0.01 par
value ("Stock"), set forth in the Award Notice (the "Option"), at the price per
share set forth in the Award Notice, upon and subject to the terms and
conditions set forth below, in the Award Notice and in the Plan. Capitalized
terms not defined herein shall have the meanings specified in the Plan.

                  1.   Option Subject to Acceptance of Agreement. The Option
shall be null and void unless the Optionee shall accept this Agreement by
executing the Award Notice in the space provided therefore and returning an
original execution copy of the Award Notice to the Company.

                  2.   Time and Manner of Exercise of Option.

                  2.1. Maximum Term of Option. In no event may the Option be
exercised, in whole or in part, after the expiration date set forth in the Award
Notice (the "Expiration Date").

                  2.2. Exercise of Option. (a) The Option shall become
exercisable in accordance with the exercise schedule set forth in the Award
Notice (the "Exercise Schedule").

                  (b) If the Optionee ceases to be a director of the Company by
reason of Disability, the Option shall be exercisable only to the extent it is
exercisable on the effective date of the Optionee's ceasing to be a director and
may thereafter be exercised by the Optionee or the Optionee's Legal
Representative until and including the earlier to occur of (i) the date which is
one year after the effective date of the Optionee's ceasing to be a director and
(ii) the Expiration Date.

                  (c) If the Optionee ceases to be a director of the Company by
reason of Retirement, the Option shall be exercisable only to the extent it is
exercisable on the effective date of the Optionee's ceasing to be a director and
may thereafter be exercised by the Optionee or the Optionee's Legal
Representative until and including the earlier to occur of (i) the date which is
three months after the effective date of the Optionee's ceasing to be a director
and (ii) the Expiration Date.

                  (d) If the Optionee ceases to be a director of the Company by
reason of death, the Option shall be exercisable only to the extent it is
exercisable on the date of death and may

<PAGE>   32

thereafter be exercised by the Optionee's Legal Representative or Permitted
Transferees, as the case may be, until and including the earlier to occur of (i)
the date which is one year after the date of death and (ii) the Expiration Date.

                  (e) If the Optionee ceases to be a director of the Company for
any reason other than Disability, Retirement or death, the Option shall be
exercisable only to the extent it is exercisable on the effective date of the
Optionee's ceasing to be a director and may thereafter be exercised by the
Optionee or the Optionee's Legal Representative until and including the earlier
to occur of (i) the date which is three months after the effective date of the
Optionee's ceasing to be a director and (ii) the Expiration Date.

                  (f) If the Optionee dies during the period set forth in
Section 2.2(b) following such Optionee's ceasing to be a director of the Company
by reason of Disability, or if the Optionee dies during the period set forth in
Section 2.2(c) following such Optionee's ceasing to be a director of the Company
by reason of Retirement, or if the Optionee dies during the period set forth in
Section 2.2(e) following such Optionee's ceasing to be a director of the Company
for any reason other than Disability or Retirement, the Option shall be
exercisable only to the extent it is exercisable on the date of death and may
thereafter be exercised by the Optionee's Legal Representative or Permitted
Transferees, as the case may be, until and including the earlier to occur of (i)
the date which is one year after the date of death and (ii) the Expiration Date.

                  (g) Notwithstanding Sections 2.1 and 2.4 and the exercise
periods set forth in the Award Notice and in subsections (b), (c), (d), (e) and
(f) of this Section 2.2, in the event the Company is involved in a business
combination, including a business combination which is intended to be treated as
a pooling of interests for financial accounting purposes (a "Pooling
Transaction"), in connection with which the Optionee receives a substitute
option to purchase securities of any entity, including an entity directly or
indirectly acquiring the Company:

                  (1) if the acquisition of the substitute option by the
         Optionee may be treated as a purchase for purposes of Section 16(b) of
         the Exchange Act and the Optionee's service as a director of the
         Company is terminated for any reason during the nine-month period
         beginning three months prior to the consummation of such business
         combination, then the Option (or option in substitution thereof) shall
         be exercisable to the extent set forth in the Award Notice and above in
         this Section 2.2 until and including the latest to occur of (i) the
         date determined pursuant to the then applicable subsection (b), (c),
         (d), (e) or (f) of this Section 2.2, (ii) the date which is seven
         months after the consummation of such business combination and (iii)
         the Expiration Date; or

                  (2) if the Optionee is restricted from disposing of a security
         (or security underlying a security) issued in connection with the
         Pooling Transaction and the purpose of such restriction is to ensure
         that the Pooling Transaction is accounted for as a pooling of interests
         (the "Pooling Restriction") and the Optionee's service as a director of
         the Company is terminated for any reason during the nine-month period
         beginning three months prior to the consummation of such business
         combination, then the Option (or option in substitution thereof) shall
         be exercisable to the extent set forth in the Award Notice and above in
         this Section 2.2 until and including the latest to occur of (i) the
         date determined pursuant to the then applicable subsection (b), (c),
         (d), (e) or (f) of this

                                       2

<PAGE>   33

         Section 2.2, (ii) the date which is one month after the date of
         expiration of the Pooling Restriction and (iii) the Expiration Date.

                  2.3. Method of Exercise. Subject to the limitations set forth
in this Agreement, the Option may be exercised by the Optionee (a) by giving
written notice to the Company specifying the number of whole shares of Stock to
be purchased and by accompanying such notice with payment therefor in full (or
by arranging for such payment to the Company's satisfaction) either (i) in cash,
(ii) by delivery to the Company (either actual delivery or by attestation
procedures established by the Company) of Mature Shares having an aggregate Fair
Market Value, determined as of the date of exercise, equal to the aggregate
purchase price payable pursuant to the Option by reason of such exercise, (iii)
in cash by a broker-dealer acceptable to the Company to whom the Optionee has
submitted an irrevocable notice of exercise or (iv) by a combination of (i) and
(ii), and (b) by executing such documents as the Company may reasonably request.
The Company shall have sole discretion to disapprove of an election pursuant to
any of clauses (ii) - (iv). Any fraction of a share of Stock which would be
required to pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the Optionee. No certificate representing a
share of Stock shall be delivered until the full purchase price therefor has
been paid.

                  2.4. Termination of Option. (a) Subject to Section 2.2(g), in
no event may the Option be exercised after it terminates as set forth in this
Section 2.4. The Option shall terminate, to the extent not earlier terminated
pursuant to Section 2.2 or exercised pursuant to Section 2.3, on the Expiration
Date.

                  (b)  In the event that rights to purchase all or a portion of
the shares of Stock subject to the Option expire or are exercised, cancelled or
forfeited, the Optionee shall, upon the Company's request, promptly return this
Agreement to the Company for full or partial cancellation, as the case may be;
provided, however, that such cancellation shall be effective regardless of
whether the Optionee returns this Agreement. If the Optionee continues to have
rights to purchase shares of Stock hereunder, the Company shall, within 10 days
of the Optionee's delivery of this Agreement to the Company, either (i) mark
this Agreement to indicate the extent to which the Option has expired or been
exercised, cancelled or forfeited or (ii) issue to the Optionee a substitute
option agreement applicable to such rights, which agreement shall otherwise be
substantially similar to this Agreement in form and substance.

                  3.   Additional Terms and Conditions of Option.

                  3.1. Nontransferability of Option; Restriction on Transfer of
Stock. (a) The Option may not be transferred by the Optionee other than by will
or the laws of descent and distribution or pursuant to beneficiary designation
procedures approved by the Company. Except to the extent permitted by the
foregoing sentence, during the Optionee's lifetime the Option is exercisable
only by the Optionee or the Optionee's Legal Representative. Except to the
extent permitted by the second preceding sentence, the Option may not be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to so sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of the Option, the Option and
all rights hereunder shall immediately become null and void.

                                       3
<PAGE>   34

                  (b)  The shares of Stock purchased upon exercise of the Option
may not be transferred by the Optionee prior to the termination of the Lock-Up
Period other than by will or the laws of descent and distribution or pursuant to
beneficiary designation procedures approved by the Company. Except to the extent
permitted by the foregoing sentence, prior to the termination of the Lock-Up
Period the shares of Stock purchased upon exercise of the Option may not be
sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise
disposed of (whether by operation of law or otherwise) or be subject to
execution, attachment or similar process.

                  3.2. Investment Representation. The Optionee hereby represents
and covenants that (a) any shares of Stock purchased upon exercise of the Option
will be purchased for investment and not with a view to the distribution thereof
within the meaning of the Securities Act unless such purchase has been
registered under the Securities Act and any applicable state securities laws;
(b) any subsequent sale of any such shares shall be made in compliance with
Section 3.1(b) either pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, or pursuant to an
exemption from registration under the Securities Act and such state securities
laws; and (c) if requested by the Company, the Optionee shall submit a written
statement, in a form satisfactory to the Company, to the effect that such
representation (x) is true and correct as of the date of any purchase of any
shares hereunder or (y) is true and correct as of the date of any sale of any
such shares, as applicable. As a further condition precedent to any exercise of
the Option, the Optionee shall comply with all regulations and requirements of
any regulatory authority having control of or supervision over the issuance or
delivery of the shares and, in connection therewith, shall execute any documents
which the Board or the Committee shall in its sole discretion deem necessary or
advisable.

                  3.3. Adjustment. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off or other
similar change in capitalization or event, or any distribution to holders of
Stock other than a regular cash dividend, the number and class of securities
subject to the Option and the purchase price per security shall be appropriately
adjusted by the Committee without an increase in the aggregate purchase price.
If any adjustment would result in a fractional security being subject to the
Option, the Company shall pay the Optionee, in connection with the first
exercise of the Option occurring after such adjustment, an amount in cash
determined by multiplying (i) the fraction of such security (rounded to the
nearest hundredth) by (ii) the excess, if any, of (A) the Fair Market Value on
the exercise date over (B) the exercise price of the Option. The decision of the
Committee regarding any such adjustment shall be final, binding and conclusive.

                  3.4. Compliance with Applicable Law. The Option is subject to
the condition that if the listing, registration or qualification of the shares
subject to the Option upon any securities exchange or under any law, or the
consent or approval of any governmental body, or the taking of any other action
is necessary or desirable as a condition of, or in connection with, the purchase
or delivery of shares hereunder, the Option may not be exercised, in whole or in
part, and such shares may not be delivered, unless such listing, registration,
qualification, consent, approval or other action shall have been effected or
obtained, free of any conditions not

                                       4
<PAGE>   35

acceptable to the Company. The Company agrees to use reasonable efforts to
effect or obtain any such listing, registration, qualification, consent,
approval or other action.

                  3.5.  Delivery of Certificates. Upon the exercise of the
Option, in whole or in part, the Company shall deliver or cause to be delivered,
subject to the conditions of this Article 3, one or more certificates
representing the number of shares purchased against full payment therefor. The
Company shall pay all original issue or transfer taxes and all fees and expenses
incident to such delivery.

                  3.6.  Option Confers No Rights as Stockholder. The Optionee
shall not be entitled to any privileges of ownership with respect to shares of
Stock subject to the Option unless and until such shares are purchased and
delivered upon the exercise of the Option, in whole or in part, and the Optionee
becomes a stockholder of record with respect to such delivered shares. The
Optionee shall not be considered a stockholder of the Company with respect to
any such shares not so purchased and delivered.

                  3.7.  Option Confers No Rights to Continue to Serve as a
Director. In no event shall the granting of the Option or its acceptance by the
Optionee, or any provision of this Agreement or the Plan, give or be deemed to
give the Optionee any right to continue to serve, to be elected or reelected to
serve or to be nominated to serve as a director of the Company.

                  3.8.  Decisions of Board or Committee. The Board or the
Committee shall have the right to resolve all questions which may arise in
connection with the Option or its exercise. Any interpretation, determination or
other action made or taken by the Board or the Committee regarding the Plan or
this Agreement shall be final, binding and conclusive.

                  3.9.  Company to Reserve Shares. The Company shall at all
times prior to the expiration or termination of the Option reserve and keep
available, either in its treasury or out of its authorized but unissued shares
of Stock, the full number of shares of Stock subject to the Option from time to
time.

                  3.10. Agreement Subject to Plan. This Agreement is subject to
the provisions of the Plan, including Section 6.8 relating to a Change in
Control, and shall be interpreted in accordance therewith. The Optionee hereby
acknowledges receipt of a copy of the Plan.

                  4.    Miscellaneous Provisions.

                  4.1.  Designation as Non-Statutory Stock Option. The Option is
hereby designated as not constituting an Incentive Stock Option. This Agreement
shall be interpreted and treated consistently with such designation.

                  4.2.  Meaning of Certain Terms. As used herein, the following
terms shall have the meanings set forth below:

                  "Legal Representative" shall include an executor,
         administrator, legal representative, guardian or similar person.

                                       5
<PAGE>   36

                  "Lock-Up Period" shall mean the period required by the
         underwriters of an IPO following an IPO during which individuals
         holding shares of Common Stock shall be prohibited from selling,
         offering, contracting to sell or otherwise transferring or disposing of
         such shares of Common Stock, directly or indirectly.

                  "Securities Act" shall mean the Securities Act of 1933, as
         amended, and the rules and regulations thereunder.

                  "Permitted Transferee" shall include any transferee designated
         as the Optionee's beneficiary in the event of the Optionee's death
         pursuant to beneficiary designation procedures approved by the Company.

                  4.3. Successors. This Agreement shall be binding upon and
inure to the benefit of any successor or successors of the Company and any
person or persons who shall, upon the death of the Optionee, acquire any rights
hereunder in accordance with this Agreement or the Plan.

                  4.4. Notices. All notices, requests or other communications
provided for in this Agreement shall be made, if to the Company, to KPMG
Consulting, Inc., c/o Morgan Stanley Dean Witter, Stock Plan Administration,
Harborside Financial Center, Plaza Two, 7th Floor, Jersey City, NJ 07311 and if
to the Optionee, to the last known mailing address of the Optionee contained in
the records of the Company. All notices, requests or other communications
provided for in this Agreement shall be made in writing either (a) by personal
delivery, (b) by facsimile with confirmation of receipt, (c) by mailing in the
United States mails or (d) by express courier service. The notice, request or
other communication shall be deemed to be received upon personal delivery, upon
confirmation of receipt of facsimile transmission or upon receipt by the party
entitled thereto if by United States mail or express courier service; provided,
however, that if a notice, request or other communication sent to the Company is
not received during regular business hours, it shall be deemed to be received on
the next succeeding business day of the Company.

                  4.5. Governing Law. This Agreement, the Option and all
determinations made and actions taken pursuant hereto and thereto, to the extent
not governed by the Code or the laws of the United States, shall be governed by
the laws of the State of Delaware and construed in accordance therewith without
giving effect to principles of conflicts of laws.

                  4.6. Counterparts. This Award Notice may be executed in two
counterparts, each of which shall be deemed an original and both of which
together shall constitute one and the same instrument.

                  4.7. Information to Optionees. Prior to the IPO, the Company
shall provide to the Optionee, at least annually, copies of annual financial
statements required to be provided under Rule 260.140.46 of the California
Corporate Securities Law of 1968, as amended.

                                       6<PAGE>   1
                                                                   EXHIBIT 10.19

                              KPMG CONSULTING, INC.
                          EMPLOYEE STOCK PURCHASE PLAN

         1. Purpose. The purpose of the KPMG Consulting, Inc. Employee Stock
Purchase Plan (the "Plan") is to provide employees of KPMG Consulting, Inc., a
Delaware corporation (the "Company"), and its Subsidiary Companies (as defined
below) added incentive to remain employed by such companies and to encourage
increased efforts to promote the best interests of such companies by permitting
eligible employees to purchase shares of common stock, par value $0.01 per
share, of the Company ("Common Stock") at below-market prices. The Company
intends to use reasonable efforts to have the Plan qualify as an "employee stock
purchase plan" under section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"). However, the Company does not undertake or represent that
the Plan complies or will continue to comply with Section 423 of the Code. In
addition, this Plan authorizes the grant of options and issuances of Common
Stock which do not qualify under section 423 of the Code pursuant to sub-plans
adopted by the Committee designed to achieve desired tax or other objectives in
particular locations outside the United States. For purposes of the Plan, the
term "Subsidiary Companies" shall mean all corporations that are subsidiary
corporations (within the meaning of section 424(f) of the Code) and of which the
Company is the common parent. The Company and its Subsidiary Companies that,
from time to time, adopt the Plan are sometimes hereinafter called collectively
the "Participating Companies."

         2. Eligibility.

              (a) Eligible Employee. For any Purchase Period (as defined in
Section 4) participation in the Plan shall be open to each employee of the
Participating Companies whose customary employment is for at least 20 hours per
week as of the first day of any such Purchase Period (hereinafter, an "Eligible
Employee"). No right to purchase Common Stock hereunder shall accrue under the
Plan in favor of any person who is not an Eligible Employee as of the first day
of the relevant Purchase Period. For purposes of the Plan, the term "employee"
shall not include any individual who performs services for any of the
Participating Companies pursuant to an agreement (written or oral) that
classifies such individual's relationship with the Participating Company as
other than a common law employee of the Participating Company, regardless of
whether such individual is at any time determined to be a common law employee of
the Participating Company.

              (b) Limitations. Notwithstanding anything contained in the Plan to
the contrary, no Eligible Employee shall acquire a right to purchase Common
Stock hereunder to the extent that (i) immediately after receiving such right,
such employee would own 5% or more of the total combined voting power or value
of all classes of stock of the Company or any Subsidiary Company (including any
stock attributable to such employee under section 424(d) of the Code), or (ii)
such right would permit such employee rights to purchase Common Stock under all
employee stock purchase plans, which qualify under section 423 of the Code, of
the Company and its Subsidiary Companies to accrue at a rate which exceeds
$25,000 or such other amount as may be specified under section 423 of the Code
of fair market value of such stock (as determined on the first day of the
Purchase Period (as hereinafter defined)) for any calendar year during which
such right is outstanding at any time. The determination of the accrual of the
right

<PAGE>   2

to purchase Common Stock shall be made in accordance with section 423(b)(8) of
the Code and the regulations thereunder. Further notwithstanding anything
contained in the Plan to the contrary, the maximum number of shares that may be
bought by any Eligible Employee during any Purchase Period shall not exceed
5,000, subject to adjustment in the same manner described in Section 13, in the
case of the occurrence of any of the events described in Section 13.

              (c) Rights and Privileges. All Eligible Employees who participate
in the Plan shall have the same rights and privileges under the Plan except for
differences which may be mandated by local law and which are consistent with
section 423(b)(5) of the Code; provided, however, that Eligible Employees
participating in a sub-plan adopted pursuant to Section 16 hereof which is not
designed to qualify under section 423 of the Code need not have the same rights
and privileges as Eligible Employees participating in the section 423 Plan. The
Committee may impose restrictions on eligibility and participation of Eligible
Employees who are officers and directors to facilitate compliance with federal
or state securities laws or foreign laws.

         3. Effective Date of Plan. The Plan shall become effective on the date
of the commencement of the initial public offering of the Company's Common Stock
(the "Effective Date"). The Plan shall cease to be effective unless, within 12
months before or after the date of its adoption by the Board of Directors (the
"Board") of the Company, it has been adopted by the shareholders of the Company
at a duly-called meeting of such shareholders.

         4. Purchase Periods and Offering Periods. The first "Purchase Period"
under the Plan shall be the twenty-four month period beginning on the Effective
Date. Succeeding twenty-four month "Purchase Periods" shall commence at
six-month intervals over the term of the Plan. Within each Purchase Period,
there shall be four consecutive six-month offering periods (the "Offering
Periods"). The first "Offering Period" of each Purchase Period shall commence on
the first day of each such Purchase Period. Notwithstanding the foregoing, the
initial Offering Period shall begin on the Effective Date, or as soon thereafter
as is administratively feasible. The Committee, in its discretion, may shorten
the initial Offering Period.

         Each participant shall be granted a separate right to purchase Common
Stock for each Purchase Period in which such participant participates. The right
shall be granted on the first day of the Purchase Period and shall be exercised
automatically in successive installments on the last day of each Offering Period
(the "Exercise Date") within such Purchase Period. An Eligible Employee may
participate in only one Purchase Period at a time.

         5. Basis of Participation.

              (a) Payroll Deduction. Subject to compliance with applicable rules
prescribed by the Committee (as defined in Section 12), each Eligible Employee
shall be entitled to enroll in the Plan as of the first day of any Purchase
Period which begins on or after such employee has become an Eligible Employee,
provided, however, that for the first Purchase Period under the Plan, each
Eligible Employee with respect to such Purchase Period shall be entitled to
enroll as of the date prescribed by the Committee.

                                       2
<PAGE>   3

                   To enroll in the Plan, an Eligible Employee shall make a
request to the Company or its designated agent, at the time and in the manner
prescribed by the Committee, specifying the amount of payroll deduction to be
applied to the compensation paid to the employee by the employee's employer
while the employee is a participant in the Plan. The amount of each payroll
deduction specified in such request for each such payroll period shall be a
whole percentage of a participant's compensation, unless otherwise determined by
the Committee to be a whole dollar amount, in either case not to exceed 15%, or
such lesser percentage as may be determined by the Committee, of the
participant's compensation (before withholding or other deductions) paid to him
or her during the Purchase Period by any of the Participating Companies. Subject
to compliance with applicable rules prescribed by the Committee, the request
shall become effective on the first day of the Purchase Period following the day
the Company or its designated agent receives such request, provided, however,
that for the first Purchase Period under the Plan, the request shall be
effective as of the payroll period prescribed by the Committee.

                   Payroll deductions (and any other amount paid under the Plan)
shall be made for each participant in accordance with such participant's request
until such participant's participation in the Plan terminates, such participant
makes a new request that changes the amount of payroll deductions, the
Participant elects to suspend his or her participation in the Plan or the Plan
terminates, all as hereinafter provided.

                   A participant may change the amount of his or her payroll
deduction effective as of the first day of any Purchase Period by so directing
the Company or its designated agent at the time and in the manner specified by
the Committee. The Committee may establish rules limiting the frequency with
which participants may discontinue and resume payroll deductions under the Plan
and may impose a waiting period on participants wishing to resume payroll
deductions following discontinuance. The Committee also may change the rules
regarding discontinuance of participation or changes in participation in the
Plan. Except to the extent otherwise determined by the Committee, a participant
may not change the amount of his or her payroll deduction effective as of any
date other than the first day of a Purchase Period, except that a participant
may elect to suspend his or her participation in the Plan as provided in Section
8.

                   Payroll deductions for each participant shall be credited to
a purchase account established and maintained on behalf of the participant on
the books of the participant's employer or such employer's designated agent (a
"Purchase Account"). On each Exercise Date, the amount in each participant's
Purchase Account will be applied to the purchase of the number of shares of
Common Stock determined by dividing such amount by the Purchase Price (as
defined in Section 6) for the Offering Period ending on such Exercise Date. No
interest shall accrue at any time for any amount credited to a Purchase Account
of a participant except where otherwise required by local law as determined by
the Committee. . Unless otherwise specified by the Committee, payroll deductions
made with respect to employees paid in currencies other than U.S. dollars shall
be accumulated in local (non-U.S.) currency and converted to U.S. dollars as of
the Exercise Date.

              (b) Other Methods of Participation. The Committee may, in its
discretion, establish additional procedures whereby Eligible Employees may
participate in the

                                       3
<PAGE>   4

Plan by means other than payroll deduction, including, but not limited to,
delivery of funds by participants in a lump sum or automatic charges to
participants' bank accounts. Such other methods of participating shall be
subject to such rules and conditions as the Committee may establish. The
Committee may at any time amend, suspend or terminate any participation
procedures established pursuant to this paragraph without prior notice to any
participant or Eligible Employee.

         6. Purchase Price. The purchase price (the "Purchase Price") per share
of Common Stock hereunder for an Offering Period included in a Purchase Period
shall be (a) in the case of the first Purchase Period, the lesser of 85% of the
initial public offering price of a share of Common Stock and 85% of the fair
market value of a share of Common Stock on the Exercise Date within such
Offering Period and (b) in the case of any Purchase Period subsequent to the
first Purchase Period, the lesser of 85% of the fair market value of a share of
Common Stock on the first day of such Purchase Period and 85% of the fair market
value of a share of Common Stock on the Exercise Date within such Offering
Period. If such sum results in a fraction of one tenth of one cent, the Purchase
Price shall be increased to the next higher tenth of one cent. For purposes of
the Plan, the fair market value of a share of Common Stock on a given day shall
be the last sale price of a share of Common Stock as reported on the Nasdaq
National Market on the date as of which such value is being determined, or, if
the Common Stock is listed on a national securities exchange, the last sale
price of a share of Common Stock on the principal national stock exchange on
which the Common Stock is traded on the date as of which such value is being
determined, or if there shall be no reported transactions for such date, on the
next preceding date for which transactions are reported, provided, however, that
the fair market value of a share of Common Stock on the first day of the first
Purchase Period under the Plan shall be the price at which shares of Common
Stock are first offered to the public. In no event, however, shall the Purchase
Price be less than the par value of a share of Common Stock.

         7. Purchase Accounts and Certificates. The Common Stock purchased on an
Exercise Date by each participant shall be posted to such participant's Purchase
Account as soon as practicable after, and credited to such participant's
Purchase Account as of, such Exercise Date. Except as provided in Section 8 and
Section 9, a participant will be issued his or her shares when his or her
participation in the Plan is terminated, the Plan is terminated or upon request,
but, in the last case, only in denominations of at least 25 shares.

         After the close of each Offering Period, information will be made
available to each participant regarding the entries made to such participant's
Purchase Account, the number of shares of Common Stock purchased and the
applicable Purchase Price. In the event that the maximum number of shares of
Common Stock are purchased by the participant for the Purchase Period and cash
remains credited to the participant's Purchase Account, such cash shall be
delivered as soon as practicable to such participant. For purposes of the
preceding sentence, the maximum number of shares of Common Stock that may be
purchased by a participant for a Purchase Period shall be determined under
Section 2.

         The Committee may permit or require that shares be deposited directly
with a broker designated by the Committee (or a broker selected by the
Committee) or to a designated agent of the Company, and the Committee may
utilize electronic or automated methods of share transfer. The Committee may
require that shares be retained with such broker or agent for a

                                       4
<PAGE>   5

designated period of time (and may restrict dispositions during that period)
and/or may establish other procedures to permit tracking of disqualifying
dispositions of such shares or to restrict transfer of such shares. The
Committee may require that shares purchased under the Plan shall automatically
participate in a dividend reinvestment plan or program maintained by the
Company. The Company shall retain the amount of payroll deductions used to
purchase Common Stock as full payment for the Common Stock and the Common Stock
shall then be fully paid and non-assessable.

         8. Suspension or Termination of Participation. A participant may elect
at any time, in the manner prescribed by the Committee, to suspend his or her
participation in the Plan, provided such election is received by the Company or
its designated agent prior to the date specified by the Committee for suspension
of participation during the Purchase Period for which such suspension is to be
effective.

         Upon any suspension of participation, the participant's payroll
deductions shall cease and the cash credited to such participant's Purchase
Account on the date of such suspension shall be delivered as soon as practicable
to such participant. A participant who elects to suspend participation in the
Plan shall be permitted to resume participation in the Plan by making a new
request at the time and in the manner described in Section 5 hereof.

         If the participant dies, terminates employment with the Participating
Companies for any reason, or otherwise ceases to be an Eligible Employee, such
participant's participation in the Plan shall immediately terminate. Upon such
terminating event, the cash credited to such participant's Purchase Account on
the date of such termination shall be delivered as soon as practicable to such
participant or his or her legal representative, as the case may be without
interest (except where required by local law) and certificates for the number of
full shares of Common Stock and the cash equivalent for any fractional share
held for such participant's benefit shall be issued to him or her. The cash
equivalent for any fractional share held for the benefit of a participant shall
be determined by multiplying the fractional share by the fair market value of a
share of Common Stock on the day immediately preceding such election to receive
such shares determined as provided in Section 6. Whether a termination of
employment has occurred shall be determined by the Committee. The Committee also
may establish rules regarding when leaves of absence or change of employment
status will be considered to be a termination of employment, and the Committee
may establish termination of employment procedures for this Plan which are
independent of similar rules established under other benefit plans of the
Company and its Subsidiary Companies.

         9. Termination or Amendment of the Plan. The Company, by action of the
Board or the Committee, may terminate the Plan at any time, in which case notice
of such termination shall be given to all participants, but any failure to give
such notice shall not impair the effectiveness of the termination.

         Without any action being required, the Plan shall terminate in any
event when the maximum number of shares of Common Stock to be sold under the
Plan (as provided in Section 13) has been purchased. Such termination shall not
impair any rights that under the Plan shall have vested on or prior to the date
of such termination. If at any time the number of shares of Common Stock
remaining available for purchase under the Plan are not sufficient to satisfy
all

                                       5
<PAGE>   6

then-outstanding purchase rights, the Board or Committee may determine an
equitable basis of apportioning available Common Stock among all participants.

         The Board or the Committee may amend the Plan from time to time in any
respect for any reason; provided, however, no such amendment shall (a)
materially adversely affect any purchase rights outstanding under the Plan
during the Purchase Periods in which such amendment is to be effected, (b)
increase the maximum number of shares of Common Stock which may be purchased
under the Plan, (c) decrease the Purchase Price of the Common Stock for any
Offering Period below the lesser of 85% of the fair market value thereof on the
first day of the Purchase Period containing such Offering Period and 85% of such
fair market value on the last day of such Offering Period or (d) adversely
affect the qualification of the Plan under section 423 of the Code.

         Upon termination of the Plan, the number of full shares of Common Stock
held for each participant's benefit shall be issued as soon as practicable to
such participant and the cash equivalent of any fractional share so held
determined as provided in Section 8, and, except as otherwise provided in
Section 15, the cash, if any, credited to such participant's Purchase Account,
shall be distributed as soon as practicable to such participant.

         10. Non-Transferability. Rights acquired under the Plan are not
transferable and may be exercised only by a participant and any attempted
transfer shall be null and void and without effect. If a participant in any
manner attempts to transfer, assign or otherwise encumber his or her rights or
interest under the Plan, such act shall be treated as an election by the
participant to discontinue participation in the Plan pursuant to Section 8.

         11. Shareholder's Rights. No Eligible Employee or participant shall by
reason of the Plan have any rights of a shareholder of the Company until he or
she shall acquire Common Stock as herein provided.

         12. Administration of the Plan. The Plan shall be administered by a
committee appointed by the Board consisting of two or more members of the Board
(the "Committee"). In addition to the power to amend or terminate the Plan
pursuant to Section 9, the Committee shall have full power and authority to: (i)
interpret and administer the Plan and any instrument or agreement entered into
under the Plan; (ii) establish such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (iii) make any other determination and take any other action that the
Committee deems necessary or desirable for administration of the Plan, including
by way of illustration the adoption of sub-plans applicable to specified
Subsidiary Companies or locations. Decisions of the Committee shall be final,
conclusive and binding upon all persons, including the Company, any participant
and any other employee of the Company. A majority of the members of the
Committee may determine its actions and fix the time and place of its meetings.
The Committee may delegate to one or more individuals the day-to-day
administration of the Plan. The Company shall pay all expenses incurred in the
administration of the Plan. No Board or Committee member shall be liable for any
action or determination made in good faith with respect to the Plan or any
option granted thereunder.

                                       6
<PAGE>   7

         Except as otherwise provided in Section 2 above, the Plan shall be
administered so as to ensure that all participants have the same rights and
privileges as are provided by section 423(b)(5) of the Code.

         13. Maximum Number of Shares. The maximum number of shares of Common
Stock that may be purchased under the Plan is 14,000,000, subject to adjustment
as hereinafter set forth. Common Stock sold hereunder may be purchased for
participants in the open market (on an exchange or in negotiated transactions)
or may be previously acquired treasury shares, authorized and unissued shares,
or any combination of shares purchased in the open market, previously acquired
treasury shares or authorized and unissued shares. If the Company shall, at any
time after the Effective Date of the Plan, change its issued Common Stock into
an increased number of shares, with or without par value, through a stock
dividend or a stock split, or into a decreased number of shares, with or without
par value, through a combination of shares, then, effective with the record date
for such change, the maximum number of shares of Common Stock which thereafter
may be purchased under the Plan and the maximum number of shares which
thereafter may be purchased during any Purchase Period shall be the maximum
number of shares which, immediately prior to such record date, remained
available for purchase under the Plan and under any Purchase Period
proportionately increased, in case of such stock dividend or stock split, or
proportionately decreased in case of such combination of shares.

         14. Miscellaneous. Except as otherwise expressly provided herein, (i)
any request, election or notice under the Plan from an Eligible Employee or
participant shall be transmitted or delivered to the Company or its designated
agent and, subject to any limitations specified in the Plan, shall be effective
when received by the Company or its designated agent and (ii) any request,
notice or other communication from the Company or its designated agent that is
transmitted or delivered to Eligible Employees or participants shall be
effective when so transmitted or delivered. The Plan, and the Company's
obligation to sell and deliver Common Stock hereunder, shall be subject to all
applicable federal, state and foreign laws, rules and regulations, and to such
approval by any regulatory or governmental agency as may, in the opinion of
counsel for the Company, be required.

         15. Change in Control. In order to maintain the participants' rights in
the event of any Change in Control of the Company, as hereinafter defined, upon
such Change in Control the then current Purchase Periods shall thereupon end,
and the cash credited to all participants' Purchase Accounts shall be applied to
purchase shares pursuant to Sections 6 and 7, and the Plan shall immediately
thereafter terminate. For purposes of this Section 15, "Change in Control" shall
mean:

              (1) a sale or transfer of all or substantially all of the assets
of the Company on a consolidated basis in any transaction or series of related
transactions;

              (2) any merger, consolidation or reorganization to which the
Company is a party, except for a merger, consolidation or reorganization in
which the Company is the surviving corporation and, after giving effect to such
merger, consolidation or reorganization, the holders of the Company's
outstanding equity (on a fully diluted basis) immediately prior to the merger,
consolidation or reorganization will own in the aggregate immediately following
the

                                       7
<PAGE>   8

merger, consolidation or reorganization the Company's outstanding equity (on a
fully diluted basis) either (i) having the ordinary voting power to elect a
majority of the members of the Company's board of directors to be elected by the
holders of Common Stock and any other class which votes together with the Common
Stock as a single class or (ii) representing at least 50% of the equity value of
the Company as reasonably determined by the Board;

              (3) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of such Board; provided, however, that any individual who becomes a director of
the Company subsequent to the date hereof whose election, or nomination for
election by the holders of the Company's equity, was approved by the vote of at
least a majority of the directors then comprising the Incumbent Board shall be
deemed to have been a member of the Incumbent Board; and provided further, that
no individual who was initially elected as a director of the Company as a result
of an actual or threatened election contest, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual
or threatened solicitation of proxies or consents by or on behalf of any
individual, entity or group (a "Person"), including any "person" within the
meaning of Section 13(d) of the Exchange Act, other than the Board shall be
deemed to have been a member of the Incumbent Board; or

              (4) any Person other than KPMG LLP or its affiliates, acquires
beneficial ownership of 30% or more of the outstanding equity of the Company
generally entitled to vote on the election of directors.

         16. Committee Rules for Foreign Jurisdictions. The Committee may adopt
rules or procedures relating to the operation and administration of the Plan to
accommodate the specific requirements of local laws and procedures. Without
limiting the generality of the foregoing, the Committee is specifically
authorized to adopt rules and procedures regarding handling of payroll
deductions, payment of interest, conversion of local currency, payroll tax,
withholding procedures and handling of stock certificates which vary with local
requirements.

         The Committee may also adopt sub-plans applicable to particular
Subsidiary Companies or locations, which sub-plans may be designed to be outside
the scope of section 423 of the Code. The rules of such sub-plans may take
precedence over other provisions of this Plan, with the exception of Section
5(a), but unless otherwise superseded by the terms of such sub-plan, the
provisions of this Plan shall govern the operation of such sub-plan.

         17. No Enlargement of Employee Rights. Nothing contained in this Plan
shall be deemed to give any Eligible Employee the right to be retained in the
employ of the Company or any Subsidiary Company or to interfere with the right
of the Company or the Subsidiary Companies to discharge any Eligible Employee at
any time.

                                       8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00015-of-00352.parquet"}]]