Resources Connection Inc.
Annual Report 2015

Plain-text annual report

RESOURCES CONNECTION INC FORM 10-K (Annual Report) Filed 07/27/15 for the Period Ending 05/30/15 Address Telephone CIK 17101 ARMSTRONG AVENUE IRVINE, CA 92614 7144306400 0001084765 Symbol RECN SIC Code Industry Sector Fiscal Year 7389 - Business Services, Not Elsewhere Classified Business Services Services 05/31 http://www.edgar-online.com © Copyright 2015, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549 Form 10-K(Mark One)xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended May 30, 2015OR ¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission File Number: 0-32113 RESOURCES CONNECTION, INC.(Exact Name of Registrant as Specified in Its Charter) Delaware 33-0832424(State or Other Jurisdiction ofIncorporation or Organization) (I.R.S. EmployerIdentification No.)17101 Armstrong Avenue, Irvine, California 92614(Address of principal executive offices) (Zip Code)Registrant’s telephone number, including area code: (714) 430-6400Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Exchange on Which RegisteredCommon Stock, par value $0.01 per share The NASDAQ Stock Market LLC(Nasdaq Global Select Market)Securities registered pursuant to Section 12(g) of the Act:None (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No xIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No xIndicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and postedpursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. xIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “largeaccelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ¨ Accelerated filer x Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No xAs of November 28, 2014 (the last trading day of the registrant’s most recently completed second fiscal quarter), the approximate aggregate market value of common stock held by non-affiliates of the registrant was $547,873,000 (based upon the closing price for shares of the registrant’s common stock as reported by The Nasdaq Global Select Market). As of July 20, 2015,there were approximately 37,390,189 shares of common stock, $.01 par value, outstanding. DOCUMENTS INCORPORATED BY REFERENCEThe registrant’s definitive proxy statement for the 2015 Annual Meeting of Stockholders is incorporated by reference in Part III of this Form 10-K to the extent stated herein. Table of ContentsRESOURCES CONNECTION, INC.TABLE OF CONTENTS PageNo. PART I ITEM 1. BUSINESS 3 ITEM 1A. RISK FACTORS 20 ITEM 1B. UNRESOLVED STAFF COMMENTS 28 ITEM 2. PROPERTIES 28 ITEM 3. LEGAL PROCEEDINGS 28 ITEM 4. MINE SAFETY DISCLOSURES 28 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES 29 ITEM 6. SELECTED FINANCIAL DATA 31 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 33 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 46 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 47 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 69 ITEM 9A. CONTROLS AND PROCEDURES 69 ITEM 9B. OTHER INFORMATION 71 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 71 ITEM 11. EXECUTIVE COMPENSATION 71 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS 71 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 72 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 72 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 72 SIGNATURES 76 Table of ContentsFORWARD LOOKING STATEMENTSIn this Annual Report on Form 10-K, “Resources,” “Resources Connection,” “Resources Global Professionals,” “RGP,” “Resources Global,” “Company,”“we,” “us” and “our” refer to the business of Resources Connection, Inc. and its subsidiaries. References in this Annual Report on Form 10-K to “fiscal,” “year” or“fiscal year” refer to our fiscal year that consists of the 52- or 53-week period ending on the Saturday in May closest to May 31. The fiscal years ended May 30,2015 and May 25, 2013 consisted of 52 weeks while the year ended May 31, 2014 consisted of 53 weeks.This Annual Report on Form 10-K, including information incorporated herein by reference, contains “forward-looking statements” within the meaning ofSection 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate toexpectations concerning matters that are not historical facts. Such forward-looking statements may be identified by words such as “anticipates,” “believes,” “can,”“continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should” or “will” or the negative of these terms or othercomparable terminology.Our actual results, levels of activity, performance or achievements and those of our industry may be materially different from any future results, levels ofactivity, performance or achievements expressed or implied by these forward-looking statements. These statements and all phases of our operations are subject toknown and unknown risks, uncertainties and other factors, including those made in Item 1A of this Annual Report on Form 10-K, as well as our other reports filedwith the Securities and Exchange Commission (“SEC”). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak onlyas of the date of this Annual Report. We do not intend, and undertake no obligation to update the forward-looking statements in this filing to reflect events orcircumstances after the date of this Annual Report or to reflect the occurrence of unanticipated events.Table of ContentsPART I ITEM 1.BUSINESS.OverviewResources Connection is a multinational consulting firm; its operating entities primarily provide services under the name Resources Global Professionals(“RGP” or the “Company”). The Company provides consulting and business initiative support services to its global client base in the areas of accounting; finance;corporate governance, risk and compliance management; corporate advisory, strategic communications and restructuring; information management; human capital;supply chain management; healthcare solutions; and legal and regulatory.We assist our clients with projects requiring specialized expertise in: • Finance and accounting services including process transformation and improvement; financial reporting and analysis; technical and operationalaccounting; merger and acquisition due diligence; audit response; implementation of new accounting standards such as the new revenue recognitionpronouncement; and remediation support • Information management services including strategy development; program and project management; business and technology integration; datastrategy including security and privacy; and Business Performance Management • Corporate advisory, strategic communications and restructuring services • Corporate governance, risk and compliance management services including contract and regulatory compliance efforts under, for example, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Sarbanes Oxley Act of 2002 (“Sarbanes”); Enterprise Risk Management; internalcontrols management; and operation and information technology (“IT”) audits • Supply chain management services including supply chain strategy development; procurement and supplier management; logistics and materialsmanagement; supply chain planning and forecasting; and Conflict Minerals and Unique Device Identification compliance • Human capital services including change management; organization development and effectiveness; and optimization of human resources technologyand operations • Legal and regulatory services with projects, secondments or tactical needs including commercial transactions; compliance initiatives; law departmentoperations; and business strategy and litigation supportWe were founded in June 1996 by a team at Deloitte LLP (“Deloitte”), led by our chairman, Donald B. Murray, who was then a senior partner with Deloitte.Our founders created the Company to capitalize on the increasing demand for high quality outsourced professional services. We operated as a part of Deloitte untilApril 1999. In April 1999, we completed a management-led buyout. In December 2000, we completed our initial public offering of common stock and begantrading on the NASDAQ Stock Market. We currently trade on the NASDAQ Global Select Market. We operate under the acronym RGP, branding for our operatingentity name of Resources Global Professionals.Our business model combines the client service orientation and commitment to quality from our legacy as part of a Big Four accounting firm with theentrepreneurial culture of an innovative, dynamic company. We are positioned to take advantage of what we believe are two continuing trends in the outsourcedprofessional services industry: global demand for flexible, outsourced professional services by corporate clients and highly-experienced professionals interested inworking in a non-traditional professional services firm. We believe our business model allows us to simultaneously offer challenging yet flexible careeropportunities to attract well qualified, experienced professionals and to attract clients with enterprise-wide, global consulting needs.As of May 30, 2015, we employed or contracted with 2,516 consultants serving clients. Our consultants have professional experience in a wide range ofindustries and functional areas and tend to be in the latter third of their careers, many with advanced professional degrees or designations. We offer our consultantscareers that combine the flexibility of project-based consulting work with many of the advantages of working for a traditional professional services firm. 3Table of ContentsWe served a diverse base of over 1,700 clients during fiscal 2015, ranging from large multinational corporations to mid-sized companies to smallentrepreneurial entities, in a broad range of industries. As of May 30, 2015, we served our clients from 45 offices in the United States and from 23 offices within 19countries abroad.Our offices serve our multinational clients throughout the world with a client focus rather than from a regional/office perspective. To build our presence andability to serve multinational clients, we have established new RGP offices in countries outside of the United States and completed a number of acquisitions prior tofiscal 2015 (including acquisitions in Australia, India, the Netherlands, Sweden and the United Kingdom).Revenue from the Company’s major geographic areas was as follows (in thousands): Revenue for the Years Ended % of Total May 30, 2015 May 31, 2014 % Change May 30,2015 May 31,2014 North America $492,207 $453,659 8.5% 83.3% 80.0% Europe 59,350 76,960 (22.9)% 10.1 13.6 Asia Pacific 39,032 36,562 6.8% 6.6 6.4 Total $590,589 $567,181 4.1% 100.0% 100.0% See Note 14 — Segment Information and Enterprise Reporting — to the Consolidated Financial Statements for additional information concerning theCompany’s domestic and international operations and Part I Item 1A. “Risk Factors — Our ability to serve clients internationally is integral to our strategy and ourinternational activities expose us to additional operational challenges that we might not otherwise face” for information regarding the risks attendant to ourinternational operations.We believe our distinctive culture is a valuable asset and is, in large part, due to our management team, which has extensive experience in the professionalservices industry. Most of our senior management and office managing directors have Big Four, management consulting and/or Fortune 500 experience and anequity interest in the Company. This team has created a culture of professionalism and a client service orientation that we believe fosters in our consultants afeeling of personal responsibility for, and pride in, client projects and enables us to deliver high-quality service and results to our clients.Industry BackgroundChanging Market for Project- or Initiative-Based Professional ServicesRGP’s services cover a range of professional areas. The market for professional services is broad and fragmented and independent data on the size of themarket is not readily available. We believe that companies may be more willing to choose alternatives to traditional professional service providers because ofevolving economic competitive pressure and significant increases in government-led regulatory requirements, such as the Dodd-Frank Wall Street Reform andConsumer Protection Act. We believe RGP is positioned as a viable alternative to traditional accounting, consulting and law firms in numerous instances because,by using project consultants, companies can: • Strategically access specialized skills and expertise • Effectively supplement internal resources • Increase labor flexibility • Reduce their overall hiring, training and termination costsTypically, companies use a variety of alternatives to fill their project needs. Companies outsource entire projects to consulting firms which provides themaccess to the expertise of the firm but often entails significant cost and less management control of the project. Companies also supplement their internal resourceswith employees from the Big Four accounting firms or other traditional professional services firms. Companies use temporary employees from traditional andInternet-based staffing firms, although these employees may be less experienced or less qualified than employees from professional services firms. Finally, somecompanies rely solely on their own employees who may lack the requisite time, experience or skills. 4Table of ContentsSupply of Project ConsultantsBased on discussions with our consultants, we believe that the number of professionals seeking to work on a project basis has historically increased due to adesire for: • More flexible hours and work arrangements, coupled with a professional culture that offers competitive wages and benefits • Challenging engagements that advance their careers, develop their skills and add to their experience base • A work environment that provides a diversity of, and more control over, client engagements • Alternate employment opportunities in regions throughout the worldThe employment alternatives available to professionals may fulfill some, but not all, of an individual’s career objectives. A professional working for a BigFour firm or a consulting firm may receive challenging assignments and training, but may encounter a career path with less choice and less flexible hours, extensivetravel and limited control over work engagements. Alternatively, a professional who works as an independent contractor faces the ongoing task of sourcingassignments and significant administrative burdens.Resources Global Professionals’ SolutionWe believe that RGP is positioned to capitalize on the confluence of the industry trends described above. We believe, based on discussions with our clients,that RGP provides high-quality services to clients seeking project professionals because we are able to combine all of the following: • A relationship-oriented and collaborative approach with our clients • Client service teams with Big Four, consulting and/or industry backgrounds to assess our clients’ project needs and customize solutions to meet thoseneeds • Highly qualified consultants with the requisite expertise and experience • Competitive rates on an hourly, rather than project, basis • Significant client control of their projectsResources Global Professionals’ StrategyOur Business StrategyWe are dedicated to serving our clients with highly qualified and experienced professionals in support of projects and initiatives in the areas of accounting;finance; corporate governance, risk and compliance management; corporate advisory, strategic communications and restructuring; information management; humancapital; supply chain management; healthcare solutions; and legal and regulatory. Our objective is to be the leading provider of these project-based professionalservices. We have developed the following business strategies to achieve this objective: • Maintain our distinctive culture. Our corporate culture is the foundation of our business strategy and we believe it has been a significant component ofour success. Our senior management, virtually all of whom are Big Four or other professional services firm alumni, has created a culture that combinesthe commitment to quality and the client service focus of a Big Four firm with the entrepreneurial energy of an innovative, high-growth company. Weseek consultants and management with talent, integrity, enthusiasm and loyalty (“TIEL”, an acronym used frequently within the Company) tostrengthen our team and support our ability to provide clients with high-quality services and solutions. We believe that our culture has beeninstrumental to our success in hiring and retaining highly qualified employees and, in turn, attracting quality clients. • Hire and retain highly qualified, experienced consultants. We believe our highly qualified, experienced consultants provide us with a distinctcompetitive advantage. Therefore, one of our priorities is to continue to attract and retain high-caliber consultants. We believe we have been successfulin attracting and retaining qualified professionals by providing challenging work assignments, competitive compensation and benefits, and continuingeducation and training opportunities, while offering flexible work schedules and more control over choosing client engagements. 5Table of Contents • Build consultative relationships with clients. We emphasize a relationship-oriented approach to business rather than a transaction-oriented orassignment-oriented approach. We believe the professional services experience of our management and consultants enables us to understand the needsof our clients and to deliver an integrated, relationship-oriented approach to meeting their professional services requirements. We regularly meet withour existing and prospective clients to understand their business issues and help them define their project needs. Once an initiative is defined, weidentify consultants with the appropriate skills and experience to meet the client’s objectives. We believe that by establishing relationships with ourclients to solve their professional services needs, we are more likely to generate new opportunities to serve them. The strength and depth of our clientrelationships is demonstrated by two key statistics: 1) during fiscal 2015, 48 of our 50 largest clients used more than one service line and 41 of thosetop 50 clients used three or more service lines; and 2) 46 of our largest 50 clients in fiscal 2011 remained clients in fiscal 2015 while 40 of our top 50clients in 2008 were still clients in 2015. In addition, during fiscal 2015 our top 50 clients were served by an average of six RGP offices,demonstrating the breadth of our relationships with clients world-wide. • Build the RGP brand. Our objective is to build RGP’s reputation as the premier provider of project-based consulting services. Our primary means ofbuilding our brand is by consistently providing high-quality, value-added services to our clients. We have also focused on building a significantreferral network through our 2,516 consultants and 742 management and administrative employees working from offices in 20 countries as of May 30,2015. In addition, we have global, regional and local marketing efforts that reinforce the RGP brand.Our Growth StrategySince inception, our growth has been primarily organic rather than via acquisition. We believe that we have significant opportunity for continued strongorganic growth in our core business as the global economy strengthens and economic uncertainties decrease and that, in addition, we can grow opportunisticallythrough strategic acquisitions. In both our core and acquired businesses, key elements of our growth strategy include: • Expanding work from existing clients. A principal component of our strategy is to secure additional work from the clients we have served. We believe,based on discussions with our clients, that the amount of revenue we currently receive from many of our clients represents a relatively smallpercentage of the amount they spend on professional services, and that, consistent with historic industry trends, they may continue to increase theamount they spend on these services as the global economy evolves. We believe that by continuing to deliver high-quality services and by furtherdeveloping our relationships with our clients, we can capture a significantly larger share of our clients’ expenditures for professional services. • Growing our client base. We will continue to focus on attracting new clients. We strive to develop new client relationships primarily by leveraging thesignificant contact networks of our management and consultants and through referrals from existing clients. We believe we can continue to attract newclients by building our brand name and reputation, supplemented by our global, regional and local marketing efforts. We anticipate that our growthefforts this year will continue to focus on identifying strategic target accounts that tend to be large multinational companies. • Expanding geographically. We have been expanding geographically to meet the demand for project professional services around the world andcurrently have offices in 20 countries. We believe, based upon our clients’ requests, that there are significant opportunities to promote growth globally.Consequently, we intend to continue to expand our international presence on a strategic and opportunistic basis. We may also add to our existingdomestic office network when our existing clients have a need or if there is a new client opportunity. • Providing additional professional service offerings. We will continue to develop and consider entry into new professional service offerings. Since ourfounding, we have diversified our professional service offerings from a primary focus on accounting and finance to other areas in which our clientshave significant needs such as human capital; information management; governance, risk and compliance; supply chain management; legal andregulatory services; corporate advisory, strategic communications and restructuring services; and healthcare consulting. Our considerations whenevaluating new professional service offerings include cultural fit, growth potential, profitability, cross-marketing opportunities and competition.ConsultantsWe believe that an important component of our success has been our highly qualified and experienced consultants. As of May 30, 2015, we employed orcontracted with 2,516 consultants engaged with clients. Our consultants have professional 6Table of Contentsexperience in a wide range of industries and functional areas. We provide our consultants with challenging work assignments, competitive compensation andbenefits, and continuing education and training opportunities, while offering more choice concerning work schedules and more control over choosing clientengagements.Almost all of our consultants in the United States are employees of RGP. We typically pay each consultant an hourly rate for each consulting hour workedand for certain administrative time and overtime premiums, and offer benefits, including: paid time off and holidays; a discretionary bonus program; group medicaland dental programs, each with an approximate 30-50% contribution by the consultant; a basic term life insurance program; a 401(k) retirement plan with adiscretionary company match; and professional development and career training. Typically, a consultant must work a threshold number of hours to be eligible forall of these benefits. In addition, we offer our consultants the ability to participate in the Company’s Employee Stock Purchase Plan (“ESPP”), which enables themto purchase shares of the Company’s stock at a discount. We intend to maintain competitive compensation and benefit programs.Internationally, our consultants are a blend of employees and independent contractors. Independent contractor arrangements are more common abroad thanin the United States due to the labor laws, tax regulations and customs of the international markets we serve. A few international practices also utilize a partial“bench model”; that is, certain consultants are paid a weekly salary rather than for each consulting hour worked with bonus eligibility based upon utilization.ClientsWe provide our services and solutions to a diverse client base in a broad range of industries. In fiscal 2015, we served over 1,700 clients from offices locatedin 20 countries. Our revenues are not concentrated with any particular client or within any particular industry. No single customer accounted for more than 10% ofrevenue for the years ended May 30, 2015, May 31, 2014 and May 25, 2013, and in fiscal 2015, our 10 largest clients accounted for approximately 16% of ourrevenues.The clients listed below represent the multinational and industry diversity of our client base in fiscal 2015. Aerojet Rocketdyne Holdings, Inc. Makita CorporationAIG McKesson CorporationAmerican Express Company MetLife, Inc.BP p.l.c. Phillips 66 CompanyCaesars Entertainment, Inc. Rabobank GroupCalumet Specialty Products Partners, L.P. Royal Bank of ScotlandCitigroup Inc. Syngenta International AGConocoPhillips Tech Data CorporationKaiser Permanente Tyco InternationalKawasaki Heavy Industries, Ltd. UnileverServices and ProductsRGP was founded with a business model and operating philosophy rooted in the support of client-led projects and consulting initiatives. Partnering withbusiness leaders, we help clients implement internal initiatives. Often, we deliver our services to clients across multiple functional areas of expertise withconsultants from several disciplines working on the same project. Our areas of core competency include: finance and accounting; information management; humancapital; corporate advisory, strategic communications and restructuring services; legal and regulatory; governance, risk and compliance; supply chain managementand healthcare solutions.Finance & AccountingRGP’s Finance and Accounting services encompass accounting operations, financial reporting, internal controls, financial analyses and business transactions.Clients utilize our services to bring accomplished talent to bear on internally driven change initiatives or externally mandated change, such as required FinancialAccounting Standards Board (“FASB”) implementations, as 7Table of Contentswell as day-to-day operational issues. We provide specialized skills and then transfer knowledge to clients in order to help them leverage their own personnel. RGPspecializes in providing customized solutions to our clients’ most pressing business problems, through project management and providing access to full projectteams for a specific initiative; but our scalability and global reach also put us in the ideal position to help organizations manage peak workload periods or addspecific skill sets to ongoing client projects.Our Finance and Accounting core competencies include: • Process Transformation and Improvement • Business process improvement • Treasury operations • Skills development and training • Transactional Support • Mergers and acquisitions • IPOs • Bankruptcies • Divestitures • Financial Reporting and Analysis • External financial reporting • Internal management reporting • Key performance indicators • Planning, budgeting and modeling • Account and transaction-level analysis • Technical and Operational Accounting • Policies and procedures • Technical standards implementation • Remediation and Audit Response Support • Remediation of internal control weaknesses • Financial statement restatements • Audit responseSample Engagement — Revenue Recognition Assessment: Faced with the complexities of implementing the FASB’s new revenue recognition guidance,Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers , a consumer products Fortune 500 client with world-wide operations engagedRGP to perform an assessment of its accounting policies and procedures, revenue reporting, and other related processes, including: • Using RGP’s proprietary revenue recognition evaluation tools to determine the impact of the new guidance, our consultants reviewed the client’srevenue streams and associated processes and sampled revenue related contracts • Researching and identifying the client’s current accounting application versus new revenue recognition requirements • Documenting conclusions reached regarding financial implications and developing a robust implementation roadmap and work plan, with explicitexamples, including financial statement disclosure considerations 8Table of ContentsSample Engagement — Merger of Two Firms to Create a Fortune 50 Company: When a global leader in financial services entered into an agreement tomerge with another large global financial services company, RGP partnered with the integration team to ensure a successful merger. Our team of 50 professionalswas tasked with: • Providing financial leadership with the integration planning phase of an expected three year integration process • Serving as team leads and actively participating in the overall merger integration program, including synergy tracking and reporting, and merger andintegration expense tracking and reporting • Mapping the existing financial reporting structure to the revised structure for the new combined companySample Engagement — Financial Statement Carve-Out: After announcing its intention to divest one of its business units, our client, a provider of personalcomputer accessories, needed to report the business unit as a discontinued operation for all accounting periods presented in its next public filing, an annual reporton Form 10-K, as well as subsequent quarterly and annual SEC filings until completion of the sale. To help with marketing the business unit, the client also neededto prepare audited financial statements for the business unit’s current and previous two years of operations on a stand-alone basis. The company had never preparedseparate financial statements for this business unit and did not have sufficient capacity or knowledge within its financial reporting resources to do so. We completedthe required financial statements, including: • Preparing the information necessary to reclassify the business unit as a discontinued operation in the consolidated financial statements, includingapplicable adjustments • Creating stand-alone financial statements (including footnotes) for the business unit and the tax department • Performing analyses and creating the allocation model to determine the allocable costs for the stand-alone financialsSitrick Brincko GroupSitrick Brincko Group (“Sitrick”) offers a unique combination of strategic counsel, tactical execution, and organizational and logistical support critical toboth public and private companies and high profile individuals, both in the United States and overseas. Its extensive experience in strategic, corporate, financial andtransactional communications as well as general management, finance, strategic planning, manufacturing and distribution have made Sitrick a partner to boards ofdirectors and management engaged in acquisitions, proxy fights, litigation, management changes, government inquisitions, corporate reorganizations or whenrepositioning, redirecting or unwinding a business.Combined with RGP’s broad capabilities and global footprint, Sitrick offers a wide variety of services to clients, including: • Strategic and crisis communications • Repositioning a business or business segment • Change management • Litigation support • Restructuring and reorganization • Performance improvement • Loan portfolio review and loan workout • Bankruptcy administration and management • Corporate and financial advisory • Interim and crisis management • Fiduciary services, trustee, receiver, examiner • Creditor representation and recovery • Dispute resolution and litigation support 9Table of ContentsSample Engagement — Financial Restructuring: Sitrick, working with the board of directors, management and other advisors, developed and implementedthe strategic communications for the successful restructuring and change in management of a large beverage distributor. This was a cross-border engagement, withthe company based in Poland, new investors and management based in Russia and the restructuring in the United States.Sample Engagement — Litigation Support : Sitrick was retained by a technology company to provide litigation support for a patent infringement suit thecompany was about to file against a much larger and better known competitor. Sitrick developed a communications strategy that resulted in the case being settledwithin two days of its filing.Sample Engagement — Proxy Contest: Sitrick provided strategic communications counsel in a proxy contest launched against an Israeli company where ahedge fund was trying to take control of the board of directors. The company successfully maintained control of the board of directors.Information ManagementRGP’s Information Management practice provides planning and execution services in four primary areas: Program & Project Management; Business &Technology Integration; Data Strategy & Management; and IT Strategy & Advisory. By focusing on the initiative as defined by our clients, RGP can providecontinuity of service from the creation or expansion of an overall IT strategy through post-implementation support. In addition to these services, we have expertisein a variety of technology solutions: Enterprise Resource Planning (“ERP”) systems; strategic “front-of-the-house systems”; human resources (“HR”) informationsystems; supply chain management systems; core finance and accounting systems; audit compliance systems; and financial reporting, planning and consolidationsystems.The following are examples of the core competencies of our Information Management practice:Program & Project Management • PMO design & optimization • Project audit & assessments • Portfolio rationalization • Project Management & RecoveryBusiness & Technology Integration • Business analysis & process reengineering • System stabilization and optimization • System selection & implementation • Quality assurance & testingData Strategy & Management • Data analysis, conversion & integration • Business Intelligence (“BI”) strategy & execution • Data governance, security & quality management • Business Performance Management solutionsIT Strategy & Advisory • IT assessments & strategic planning • Merger planning & integration 10Table of Contents • Outsourcing & Shared Service strategy • Infrastructure, architecture & design servicesSample Engagement — Integration and Optimization of Significant Acquisition: A large publicly-traded entertainment conglomerate acquired a regionalentity that provided home security and monitoring. Our client needed to integrate its existing ordering, billing, supply chain and installation systems with theacquired entity’s systems in order to sell and deliver these new capabilities across its current and prospective customer base. Working with the client’simplementation team, RGP’s activities included: • Serving as interim program manager and senior project manager • Linking and modifying the client’s existing sales programming to bundle the acquired home security/monitoring products • Modifying the existing equipment delivery systems capability to reduce the number of days to final installSample Engagement — BI Strategy/Implementation: A large state utility company required assistance in restarting and reenergizing a stalled enterprise-wideBI initiative focused on increasing overall data definition/management, analysis and reporting to support enterprise-wide business decision making. The RGPengagement consisted of: • Partnering with the client’s corporate stakeholder team to define the current state of the stalled BI initiative, redeveloping overall objectives/goals, andproviding the framework/approach of how to restart and move forward towards a successful implementation and adoption • Leading the effort to gain stakeholder, management and end user buy-in for the initiative across the organization • Providing day to day Program Management oversight, focusing on partnering, advising and managing the redefined approach. Critical deliverablesincluded requirements/process definition, data definition/management, report/dashboard definition and development, change management andtraining/adoptionSample Engagement — Cyber Security Operations and Analysis Center (“CSOAC”) Design and Technology Selection: A United States federal electricpower agency engaged RGP to design a cyber-security function to identify threats, weaknesses and vulnerabilities and to help prevent and mitigate attacks on itsnetworks and systems. The CSOAC will focus on real time or near real time feed of security information from intrusion detection systems, firewalls and operatingsystems, and near real time vulnerability and configuration scans, including event correlation and analysis to prevent current and future cyber-security attacks. RGPactivities included: • Serving as program manager, business analyst, and cyber-security advisor • Driving the initiative through project initiation, assessment, and planning phases • Leading the company through the necessary technology selectionSample Engagement — System Redesign and Reimplementation: After spending $100 million on a large consulting firm’s unsuccessful implementation ofSAP software, our client, a privately-held manufacturer and exporter of dairy products, engaged us to lead a system review, redesign and reimplementationinitiative. As the Chief Information Officer’s strategic IT partner, RGP was responsible for activities such as: • Developing and leading the PMO • Performing a system review • Project managing the reimplementation and roll out of SAP • Redesigning the client’s custom manufacturing process and integrating it with SAP and Wonderware • Performing quality assurance tests • Providing end user training and post-go live support 11Table of ContentsSample Engagement — Data Analytics PMO: RGP consultants assisted our client with the launch of a Data Analytics Program to better capitalize upon itsleading data/analytics processes. The use of data to drive operating decisions has long been a fundamental element behind our client’s competitive positioning andan ongoing source of competitive advantage. Their data infrastructure was scaled up in 2014 to accommodate the increasing demand for new data in their enterprisedata platform. The Data Analytics Program has enabled better decision making on pricing, customer segmentation, marketing and yield management. The RGPengagement consisted of: • Supporting program and project management for the Data Analytics Program • Developing the program structure, defining work streams and assigning appropriate team members • Identifying and tracking of key activities and milestones • Developing and managing the program budget • Communicating to key stakeholders • Evaluating and selecting tools/technologyHuman CapitalRGP’s Human Capital consultants apply project-management and business analysis skills to help solve the people aspects of business problems. The twoprimary areas of focus of our human capital practice are change management/business transformation and HR operations. To achieve the desired business outcome,our Human Capital professionals work with client teams to help drive their change management initiatives to successful completion. We help our clients with thepeople challenges of acquisitions, mergers, downsizing, reorganizations, system implementations or legislative requirements (Sarbanes, Basel II, HIPAA, thePatient Protection and Affordable Care Act, etc.). Our Human Capital professionals also have HR operations and technology skills that provide clients with themeans to achieve their initiatives. Our Human Capital core competencies revolve around:Organizational Development and Effectiveness • Process analysis development and redesign • Change management • Organizational alignment and structure • Fully integrated performance management and measurement programs • Succession and workforce planning • Training and skills development strategy • Employee retention programs, opinion surveys and communications programsHR Technology • System selection, implementation and optimization • Project management • Change management • Data conversion • Post-implementation and interim supportHR Operations • HR leadership • HR risk assessment 12Table of Contents • Labor/employee relations and compliance • Talent acquisition • Policies and proceduresSample Engagement — Organizational Design: A Fortune 500 life insurance company wanted to design a new organizational and operating model toprovide more efficient, “silo-free” operations. Partnering with RGP, our consultants provided subject-matter expertise on organizational design and an operatingmodel development approach, process and content. Specifically, RGP supported the initiative by: • Conducting in-depth current state organizational reviews • Developing a comprehensive culture and change impact assessment to identify benefits and challenges of the new operating model • Evaluating the impact on human capital of a shared services center and off-shoring implementation • Presenting key aspects of the operating model design approach to management and staff and assessing potential interdependencies with otherworkstreams outside of the HR functionSample Engagement — Implementation of HR system: A Fortune 500 provider of electronic products and services selected Workday as their world-wide HRsystem in order to improve HR workload and processes. The new system would replace the existing, manually intensive and inefficient spreadsheet based process,allowing HR management to focus on analysis rather than data development and reconciliation. RGP lead the initiative in the region by developing andimplementing a deployment plan and assessing the impact and success of the software usage upon completion.Sample Engagement — Change Management for ERP Implementation: Following a global retailer’s highly customized and ineffective Oracle R12 ProjectsModule implementation, RGP developed, led and helped execute the change management program related to the system’s re-implementation and upgrade. Weworked alongside the client’s internal project manager and a system integration firm to ensure the re-implementation’s sustainable success.Legal & RegulatoryRGP Legal helps clients drive and execute their legal, risk management and regulatory initiatives. Our consultants (comprised of attorneys, complianceprofessionals, paralegals and contract managers) have significant experience working at the nation’s top law firms and companies. RGP Legal provides generalcounsel access to exceptional talent on an agile basis for the exact subject-matter knowledge and business perspective required for a particular task or workflow.Generally, RGP Legal is engaged to work directly with in-house counsel or with traditional outside counsel for projects or pieces of “unbundled” work. Examplesof our core competencies include:Commercial Transactions • Mergers and acquisitions integration, due diligence, divestitures and joint ventures • Contracts, including review, drafting and negotiation • Bankruptcy, corporate restructurings and workoutsCompliance Initiatives • Quarterly and annual SEC filings, annual meetings, proxy statements and corporate governance matters • Compliance policy development and implementation, compliance training, testing and reportingLaw Department Operations • Business process improvement/playbook development • Resource planning and benchmarking 13Table of Contents • Spend analysis and assessment • Technology assessment and implementationLitigation Support • Litigation management and support, including document review and analysis, investigations and regulatory reviews • eDiscovery project managementSample Engagement — Workflow Allocation and Unbundling: A publicly traded financial services company embarked on a significant acquisition effort,only to have the project sidelined by an antitrust review by the Department of Justice (“DOJ”). After engaging outside counsel to lead a Hart-Scott-Rodino filingand strategy negotiations, the client determined it needed an agile, lower-cost partner to support a massive second level review.RGP was engaged to provide 15 experienced attorneys to prepare for the DOJ’s review. Our work involved significant analysis of business development,marketing and attorney-client documentation. Consultants’ responsibilities included technology-assisted review, project management, report writing and analytics.Sample Engagement — Development and Implementation of Knowledge Management Tool: Our client, a multi-million dollar asset management firm, lackedan efficient tool for handling information related to their investment/private equity funds. As a result, in-house attorneys often started deals without the benefit ofknowledge gleaned from previously negotiated agreements. Documents were difficult to locate, important deal information was lost, and providing information toregulators and third parties was often time consuming and inefficient.Leveraging the expertise of one of our attorney consultants, a former general counsel for a financial services company with extensive technology expertise,RGP designed a knowledge management tool to increase efficiencies in the client’s deal flow and archiving process. RGP crafted a simple searchable database toolthat provided an effective way to access, retrieve, archive and leverage important deal information. RGP also conducted a gap analysis on missing deal documentsand developed training to ensure attorney buy-in and acceptance.Sample Engagement — Unbundling Support for M&A Activity: Our client, a world leader in the in-flight entertainment and communication solutionsbusiness, turned to RGP for supplemental support and expertise in connection with a buy-side acquisition. The client’s general counsel engaged us to supplementthe bandwidth of the in-house team. Our consultants drove the diligence process, collaborated extensively with internal business units and, working closely withlead outside counsel who focused on the strategy and structure of the deal, assisted in the drafting of deal documents. By multi-sourcing the work needed to supportthe transaction, the client reduced its legal spend on the deal significantly.Sample Engagement — Unbundling Fact Finding Activities in Class Action Litigation: Challenged with the process of managing a massive wage and hourclass action lawsuit, our client, a multinational publicly-traded food service chain, engaged RGP to provide a seasoned team of attorneys to conduct employeeinterviews critical to revealing issues important in responding to the class certification process.After conducting the interviews, our consultants teamed with the client and outside counsel to determine the merit and relevancy of each declaration. Theproject was completed rapidly over a two-week period and the client reported significant cost savings versus traditional solutions.Supply Chain ManagementRGP’s Supply Chain Management practice assists clients in the planning, execution, maintenance and troubleshooting of complex supply chain systems andprocesses. Our consultants work as part of client teams to reduce the total cost of ownership, improve business performance and produce results. Specifically, ourcore competencies include:Supply Chain Strategy and Advisory • Supply chain technology and strategic planning 14Table of Contents • Merger planning and integration • Organizational design, alignment, process, policies and proceduresProcurement and Supplier Management • Strategic sourcing • Contract and supplier relationship management • Procure-to-payLogistics and Materials Management • Inventory and transportation management • Distribution network analysis • Reverse logisticsSupply Chain Planning and Forecasting • Sales and operations planning • Demand and supply planning • Production planningManufacturing and Operations • Manufacturing assessment and strategy • Production process • LEAN/Six SigmaSupply Chain Risk and Compliance • Risk assessments • Regulatory compliance • Third party oversightSample Engagement — Vendor Risk Management Software Selection and Monitoring: A major publicly-traded financial services company wanted toeffectively and proactively identify and manage previously unaddressed significant vendor risks. Working collaboratively, a cross-functional team of clientpersonnel and RGP consultants developed a comprehensive vendor performance monitoring function. The team identified three key project work streams: 1)establishment of solutions to support and maintain the client’s third party vendor management processes, systems, standards and metrics tracking; 2) developmentof user guides and materials and training on the selected software tool to support the function; 3) development and support of the day to day processes to ensurecompliance with regulations, guidelines and firm requirements. Specifically, RGP was responsible for: • Developing the framework and vendor scorecards • Conducting Certification and Governance Maturity assessments • Conducting on-site vendor assessments, certification and governance • Developing program processes, policies and procedures • Assisting with management of the selected software implementation 15Table of ContentsSample Engagement — Procure-to-Pay Assessment: A large multinational consumer electronic company needed assistance in conducting an assessment ofits Procure-to-Pay process to review performance and to identify recommendations to fill gaps. The client had two primary goals: 1) to assess the current state; and2) to provide insights on the future state, with comparison to leading practices and a high-level implementation roadmap. RGP, acting in project management andbusiness analyst roles, was tasked with: • Documenting the current process, controls and policies and procedures • Outlining benefits of using the new Oracle system • Providing analysis of current staff skills and appropriate staff size • Providing recommendations on procure to pay strategy, priorities, organizational structure, risks and dependencies • Assessing supplier selection, certification and performance monitoring • Developing recommendations for future state, including ways to maximize effectiveness and efficiency, optimizing cost structures and mitigating riskexposuresSample Engagement — Strategic Sourcing: Using the end-to-end strategic sourcing/category excellence methodology, our consultants helped a largemultinational transportation company develop an approach and methodology to achieve multi-million dollar cost savings. Specifically, RGP helped by: • Analyzing ocean, rail and air freight spend and developing a sourcing strategy that identified over $4 million in annual savings • Negotiating new contracts and, working with a third party, performing audit finding recoveries • Analyzing new partnerships with vendors to ensure that transportation vehicles were filled to optimal capacitySample Engagement — Conflict Minerals Compliance: For a large, global technology component manufacturer, RGP helped address its complex globalsupply chain related to compliance requirements adopted by the SEC pursuant to Dodd Frank Section 1502. RGP’s Conflict Minerals compliance team appliedtheir deep functional experience in supply chain management and risk assessment and engaged with the client’s designated team to design and deploy a customizedend-to-end Conflict Minerals compliance program, including Reasonable Country of Origin Inquiry (“RCOI”) and due diligence process design. RGP projectactivities included: • Providing advisory services to support the global roll out of their Conflict Minerals compliance program • Designing and deploying an RCOI and due diligence process for more than 17,000 suppliers and 300,000 items, utilizing policyIQ, RGP’s proprietarycontent management application, to issue questionnaires and aggregate partner-level and supplier-level responses • Designing a supplier training program to build awareness of client requirements and objectives to achieve compliance • Developing an auditable “Standard Operating Procedure” aligned with the Organisation for Economic Co-Operation and Development five-stepframework • Developing an RCOI evaluation, validation, and risk assessment processGovernance, Risk and Compliance (“GRC”): Corporate Governance, Risk Management, Internal Audit and Compliance ServicesRGP’s GRC practice assists clients with a variety of governance, risk management, internal audit and compliance initiatives. The professionals in our GRCpractice have experience in operations, controllership and internal and external audit and serve our clients in any number of roles required — from programmanager to team member. In addition to helping clients worldwide in the areas of audit, risk and compliance, we are able to draw on RGP’s other practice areas tobring the required business expertise to the engagement. Our GRC core competencies include:Enterprise Risk Management • Strategic and operational objectives and risk assessment 16Table of Contents • Risk management and monitoring process development • Implementation of comprehensive ERM programsContract and Regulatory Compliance Audits • Regulatory compliance assessments • Royalty, license and franchise partner auditsSox and Internal Controls • Documentation and testing of key controls • Control rationalization and self-assessment • Remediation of control deficienciesOperational and IT Audits • Specialized skill sets and subject matter expertise • Global geographic coverage • Audit plan development and periodic risk assessmentSample Engagement — Internal Audit Co-Sourcing and Internal Control Framework: A global insurance provider engaged RGP to provide co-sourcedinternal audit functions as well as to implement their Internal Control Framework (“ICF”). After identifying high risk projects and processes in the IT function, weassisted with the following deliverables: • Planning and designing the audit approach to be used across the enterprise for engagements • Performing testing and evaluation of results in order to prepare draft audit reports • Producing final audit reports in the required format utilizing the client’s auditor assistant database systemFor the ICF project, RGP consultants were deployed in the US and internationally to document and review accounting and IT processes and controls and toprovide recommendations for improvement.Sample Engagement — Banking Compliance Support: Our client, a Fortune 500 financial services company, wanted to develop and implement a moreformal approach to the assessment of the company’s regulatory risk profile. Previously, decisions on assessment of regulatory risk were more of an intuitiveexercise than a formalized methodology. To help the client evolve its process, RGP was responsible for the entire project, including: • Identifying risk topics for each product type (real estate loans, consumer loans, credit cards, deposits, trusts and others) • Determining gaps in regulation coverage • Creating risk statements for each product • Defining the inherent and control risk definitions • Building and scoring the templates to be used to document the effortsThe final deliverable allowed bank management to better allocate limited resources to maximize coverage of critical compliance issues using the quantifiablebasis of risk assessment. Ultimately, RGP consultants deployed the methodology through other facets of the company’s operation, including property/casualty andlife insurance and investment management.Sample Engagement — Audit IT Security Controls: The CIO of a global healthcare company headquartered in Europe planned a series of global IT audits.Working as a part of a client team, RGP was responsible for an assessment of the maturity of the IT 17Table of Contentssecurity organization, implementation of the IT security governance model, conducting a series of interviews with top management stakeholders in the ITorganization, and transfer of knowledge on audit techniques.Sample Engagement — Global Sarbanes Implementation: The CFO of a privately-held international manufacturer of building products wanted to helpenhance the company’s ability to compete for capital by becoming Sarbanes compliant.RGP implemented Sarbanes at over 100 sites across 14 countries. Our international team of 32 consultants served as the client’s lead IT project manager,Sarbanes experts and team leads to ensure finance, operations and IT compliance with initial Sarbanes’ requirements and to provide the education and knowledgetransfer to help ensure future compliance. Specific duties included: planning, scheduling, documentation, segregation of duties analysis, end-user computinganalysis, testing, and remediation.Sample Engagement — Post Merger Integration: A United States based pharmaceutical company with global operations acquired an India-basedpharmaceutical developer and manufacturer with a strong product pipeline focused on niche first-to-file and first-to-market products. The client faced a significantchallenge since the acquired company lacked internal controls and violated numerous regulatory standards.The client engaged RGP to ensure full compliance of the acquired company with standards applicable to the parent company in the United States fromfinance and accounting, operational, ethical and governance standpoints. Tasks included post-merger integration execution, a “forensic audit” of internal controlsand identification of significant internal control deficiencies.policyIQRGP’s policyIQ is our proprietary cloud-based GRC software application, enabling the focused management of a wide range of GRC processes, includingRisk Assessments, Sarbanes Compliance, Foreign Corrupt Practices Act, Policy and Procedure Management, Internal Audit Programs, Anti-CorruptionCompliance and Conflict Minerals Compliance. PolicyIQ can be implemented quickly to manage a specific aspect of an overall GRC program, or easily scaled tointegrate multiple initiatives, allowing the organization to realize greater efficiency. Additionally, our engagement teams often utilize policyIQ as a tool to assist inthe efficient collection, storing and review of project workpapers, deliverables and other critical project content. Business problems that our clients have usedpolicyIQ to resolve include: • Sarbanes Compliance Management: Clients use policyIQ to manage their entire Sarbanes compliance program, from risk assessment throughremediation tracking. Electronic forms automate quarterly certifications, and reporting allows all stakeholders insight into the status of Sarbanescompliance at any time. • Policy and Procedure Management: With policyIQ as the central location for all organizational policies and procedures, all employees have access tothe most current documentation — and using electronic forms, can easily document annual proof of compliance. • Internal Audit Programs: Companies use policyIQ to capture workpapers electronically, gathering all evidence in a central location and assigningtesting to the appropriate auditors. With robust reporting, audit managers have oversight into the process and with built-in workflow, audits can flowthrough appropriate channels of approval. • Conflict Minerals Compliance: RGP brings policyIQ to every Conflict Minerals engagement as a robust technology platform for the management ofall aspects of the compliance program. PolicyIQ offers a central location for the retention and update of documentation, accessible by both thecompany and all of its impacted suppliers.Sample Engagement — Fresh Approach to Sarbanes Compliance: For a publicly traded pharmaceutical company in acquisition mode, RGP was engaged toassist with a fresh approach to their Sarbanes compliance program. Using policyIQ, our consulting team was able to: • Implement a strong top down approach to Sarbanes compliance, aligned with Auditing Standard No. 5 adopted by the Public Company AccountingOversight Board • Reduce the total number of Sarbanes controls in scope for testing, by focusing on clear and well-documented Entity Level Controls 18Table of Contents • Organize all Sarbanes compliance documentation for maximum efficiency in testing, external audit review and annual roll-forward processesOperationsWe generally provide our professional services to clients at a local level, with the oversight of our regional managing directors and consultation of ourcorporate management team. The managing director, client service director(s) and recruiting director(s) in each office are responsible for initiating clientrelationships, identifying consultants specifically skilled to perform client projects, ensuring client and consultant satisfaction throughout engagements andmaintaining client relationships post-engagement. Throughout this process, the corporate management team and regional managing directors are available toconsult with the managing director with respect to client services.Our offices operate in an entrepreneurial manner. The managing directors of our offices are given significant autonomy in the daily operations of theirrespective offices, and are responsible for overall guidance and supervision, budgeting and forecasting, sales and marketing, pricing and hiring within their office.We believe that a substantial portion of the buying decisions made by our clients are made on a local or regional basis and that our offices most often compete withother professional services providers on a local or regional basis. Because our managing directors are in the best position to understand the local and regionaloutsourced professional services market and because clients often prefer local relationships, we believe that a decentralized operating environment maximizesoperating performance and contributes to employee and client satisfaction.We believe that our ability to deliver professional services successfully to clients is dependent on our managing directors working together as a collegial andcollaborative team, at times working jointly on client projects. To build a sense of team effort and increase camaraderie among our managing directors, we have anincentive program for our office management that awards annual bonuses based on both the performance of the Company and the performance of the individual’sparticular office and the individual. We also share across the Company the best and most effective practices of our highest achieving offices and use this as anintroductory tool with new managing directors. New managing directors also spend time with another practice, partnering with experienced managing directors andother senior management personnel. This allows the veteran managing directors to share their success stories, foster the culture of the Company with new managingdirectors and review specific client and consultant development programs. We believe these team-based practices enable us to better serve clients who prefer acentrally organized service approach.From our corporate headquarters in Irvine, California, we provide centralized administrative, marketing, finance, HR, IT, legal and real estate support. Ourfinancial reporting is also centralized in our corporate service center. This center handles invoicing, accounts payable and collections, and administers HR servicesincluding employee compensation and benefits administration for North American offices. We also have a business support operations center in our Utrecht,Netherlands office to provide centralized finance, HR, IT, payroll and legal support to our European offices. In addition, in North America, we have a corporatenetworked IT platform with centralized financial reporting capabilities and a front office client management system. These centralized functions minimize theadministrative burdens on our office management and allow them to spend more time focused on client and consultant development.Business DevelopmentOur business development initiatives are composed of: • local initiatives focused on existing clients and target companies • national and international targeting efforts focused on multinational companies • brand marketing activities • national and local advertising and direct mail programsOur business development efforts are driven by the networking and sales efforts of our management. In addition, the local office managing directors areassisted by management professionals focused on business development efforts on a national basis based on firm-wide and industry-focused initiatives. Thesebusiness development professionals, teamed with the managing director 19Table of Contentsand client service teams, are responsible for initiating and fostering relationships with the senior management and decision makers of our targeted client companies.These local efforts are supplemented with national marketing assistance. We believe that these efforts have been effective in generating incremental revenues fromexisting clients and developing new client relationships.Our brand marketing initiatives help develop RGP’s image in the markets we serve. Our brand is reinforced by our professionally designed website,television, print, radio and online advertising, direct marketing, seminars, initiative-oriented brochures, social media and public relations efforts. We believe thatour branding initiatives, coupled with our high-quality client service, help to differentiate us from our competitors and to establish RGP as a credible and reputableglobal professional services firm.CompetitionWe operate in a competitive, fragmented market and compete for clients and consultants with a variety of organizations that offer similar services. Ourprincipal competitors include: • consulting firms • local, regional, national and international accounting and law firms • independent contractors • traditional and Internet-based staffing firms • the in-house or former in-house resources of our clientsWe compete for clients on the basis of the quality of professionals, the timely availability of professionals with requisite skills, the scope and price ofservices, and the geographic reach of services. We believe that our attractive value proposition, consisting of our highly qualified consultants, relationship-orientedapproach and professional culture, enables us to differentiate ourselves from our competitors. Although we believe we compete favorably with our competitors,many of our competitors have significantly greater financial resources, generate greater revenues and have greater name recognition than we do.EmployeesAs of May 30, 2015, we had a total of 3,258 employees, including 742 corporate and local office employees and 2,516 consultants. Our employees are notcovered by any collective bargaining agreements.Available InformationThe Company’s principal executive offices are located at 17101 Armstrong Avenue, Irvine, California 92614. The Company’s telephone number is(714) 430-6400 and its website address is http://www.rgp.com. The information set forth in the website does not constitute part of this Annual Report on Form 10-K. We file our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K pursuant to Section 13(a) or 15(d) of the SecuritiesExchange Act of 1934 with the SEC electronically. These reports are maintained on the SEC’s website at http://www.sec.gov.A free copy of our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K and amendments to those reports may beobtained on our website at http://www.rgp.com as soon as reasonably practicable after we file such reports with the SEC. ITEM 1A.RISK FACTORS .You should carefully consider the risks described below before making a decision to buy shares of our common stock. The order of the risks is not anindication of their relative weight or importance. The risks and uncertainties described below are not the only ones facing us but do represent those risks anduncertainties that we believe are material to us. Additional risks and 20Table of Contentsuncertainties not presently known to us or that we currently deem immaterial may also adversely impact and impair our business. If any of the following risksactually occur, our business could be harmed. In that case, the trading price of our common stock could decline, and you might lose all or part of your investment.When determining whether to buy our common stock, you should also refer to the other information in this Annual Report on Form 10-K, including our financialstatements and the related notes.A future economic downturn or change in the use of outsourced professional services consultants could adversely affect our business.While we believe general economic conditions continue to improve in most parts of the world, there continues to be some uncertainty regarding generaleconomic conditions within some regions and countries in which we operate, leading to reluctance on the part of some multinational companies to spend ondiscretionary projects. Deterioration of or increased uncertainty related to the global economy or tightening credit markets could result in a reduction in the demandfor our services and adversely affect our business in the future. In addition, the use of professional services consultants on a project-by-project basis could declinefor non-economic reasons. In the event of a reduction in the demand for our consultants, our financial results would suffer.Economic deterioration at one or more of our clients may also affect our allowance for doubtful accounts. Our estimate of losses resulting from our clients’failure to make required payments for services rendered has historically been within our expectations and the provisions established. However, we cannot guaranteethat we will continue to experience the same credit loss rates that we have in the past. A significant change in the liquidity or financial position of our clients couldcause unfavorable trends in receivable collections and cash flows and additional allowances may be required. These additional allowances could materially affectthe Company’s future financial results.In addition, we are required to periodically, but at least annually, assess the recoverability of certain assets, including deferred tax assets and goodwill.Softening of the United States economy and international economies could adversely affect our evaluation of the recoverability of deferred tax assets, requiring usto record additional tax valuation allowances. Our assessment of impairment of goodwill is currently based upon comparing our market capitalization to our netbook value. Therefore, a significant downturn in the future market value of our stock could potentially result in impairment reductions of goodwill and such anadjustment could materially affect the Company’s future financial results and financial condition.The market for professional services is highly competitive, and if we are unable to compete effectively against our competitors, our business and operatingresults could be adversely affected.We operate in a competitive, fragmented market, and we compete for clients and consultants with a variety of organizations that offer similar services. Thecompetition is likely to increase in the future due to the expected growth of the market and the relatively few barriers to entry. Our principal competitors include: • consulting firms; • local, regional, national and international accounting and other traditional professional services firms; • independent contractors; • traditional and Internet-based staffing firms; and • the in-house or former in-house resources of our clients.We cannot assure you that we will be able to compete effectively against existing or future competitors. Many of our competitors have significantly greaterfinancial resources, greater revenues and greater name recognition, which may afford them an advantage in attracting and retaining clients and consultants and inoffering pricing concessions. Some of our competitors in certain markets do not provide medical and other benefits to their consultants, thereby allowing them topotentially charge lower rates to clients. In addition, our competitors may be able to respond more quickly to changes in companies’ needs and developments in theprofessional services industry. 21Table of ContentsOur business depends upon our ability to secure new projects from clients and, therefore, we could be adversely affected if we fail to do so.We do not have long-term agreements with our clients for the provision of services and our clients may terminate engagements with us at any time. Thesuccess of our business is dependent on our ability to secure new projects from clients. For example, if we are unable to secure new client projects because ofimprovements in our competitors’ service offerings, or because of a change in government regulatory requirements, or because of an economic downturndecreasing the demand for outsourced professional services, our business is likely to be materially adversely affected. New impediments to our ability to secureprojects from clients may develop over time, such as the increasing use by large clients of in-house procurement groups that manage their relationship with serviceproviders.We may be legally liable for damages resulting from the performance of projects by our consultants or for our clients’ mistreatment of our consultants.Many of our engagements with our clients involve projects that are critical to our clients’ businesses. If we fail to meet our contractual obligations, we couldbe subject to legal liability or damage to our reputation, which could adversely affect our business, operating results and financial condition. While we are notcurrently subject to any client-related legal claims which we believe are material, it remains possible, because of the nature of our business, that we may beinvolved in litigation in the future that could materially affect our future financial results. Claims brought against us could have a serious negative effect on ourreputation and on our business, financial condition and results of operations.Because we are in the business of placing our consultants in the workplaces of other companies, we are subject to possible claims by our consultants allegingdiscrimination, sexual harassment, negligence and other similar activities by our clients. We may also be subject to similar claims from our clients based onactivities by our consultants. The cost of defending such claims, even if groundless, could be substantial and the associated negative publicity could adverselyaffect our ability to attract and retain consultants and clients.We may not be able to grow our business, manage our growth or sustain our current business.Historically, we have grown by opening new offices and by increasing the volume of services provided through existing offices. Since the first quarter offiscal 2010, we have had difficulty sustaining consistent revenue growth either quarter-over-quarter or in sequential quarters. There can be no assurance that wewill be able to maintain or expand our market presence in our current locations or to successfully enter other markets or locations. Our ability to continue to growour business will depend upon an improving global economy and a number of factors, including our ability to: • grow our client base; • expand profitably into new geographies; • provide additional professional services offerings; • hire qualified and experienced consultants; • maintain margins in the face of pricing pressures; • manage costs; and • maintain or grow revenues and increase other service offerings from existing clients.Even if we are able to resume more rapid growth in our revenue, the growth will result in new and increased responsibilities for our management as well asincreased demands on our internal systems, procedures and controls, and our administrative, financial, marketing and other resources. For instance, a limitednumber of clients are requesting that certain engagements be of a fixed fee nature rather than our traditional hourly time and materials approach, thus shifting aportion of the burden of financial risk and monitoring to us. Failure to adequately respond to these new responsibilities and demands may adversely affect ourbusiness, financial condition and results of operations. 22Table of ContentsOur ability to serve clients internationally is integral to our strategy and our international activities expose us to additional operational challenges that wemight not otherwise face.Our international activities require us to confront and manage a number of risks and expenses that we would not face if we conducted our operations solelyin the United States. Any of these risks or expenses could cause a material negative effect on our operating results. These risks and expenses include: • difficulties in staffing and managing foreign offices as a result of, among other things, distance, language and cultural differences; • less flexible labor laws and regulations; • expenses associated with customizing our professional services for clients in foreign countries; • foreign currency exchange rate fluctuations when we sell our professional services in denominations other than United States’ dollars; • protectionist laws and business practices that favor local companies; • political and economic instability in some international markets; • multiple, conflicting and changing government laws and regulations; • trade barriers; • reduced protection for intellectual property rights in some countries; and • potentially adverse tax consequences.We have acquired, and may continue to acquire, companies, and these acquisitions could disrupt our business.We have acquired several companies and we may continue to acquire companies in the future. Entering into an acquisition entails many risks, any of whichcould harm our business, including: • diversion of management’s attention from other business concerns; • failure to integrate the acquired company with our existing business; • failure to motivate, or loss of, key employees from either our existing business or the acquired business; • potential impairment of relationships with our employees and clients; • additional operating expenses not offset by additional revenue; • incurrence of significant non-recurring charges; • incurrence of additional debt with restrictive covenants or other limitations; • addition of significant amounts of intangible assets, including goodwill, that are subject to periodic assessment of impairment, primarily throughcomparison of market value of our stock to our net book value, with such impairment potentially resulting in a material impact on our future financialresults and financial condition; • dilution of our stock as a result of issuing equity securities; and • assumption of liabilities of the acquired company.We must provide our clients with highly qualified and experienced consultants, and the loss of a significant number of our consultants, or an inability toattract and retain new consultants, could adversely affect our business and operating results.Our business involves the delivery of professional services, and our success depends on our ability to provide our clients with highly qualified andexperienced consultants who possess the skills and experience necessary to satisfy their needs. At various times, such professionals can be in great demand,particularly in certain geographic areas or if they have specific skill sets. Our ability to attract and retain consultants with the requisite experience and skillsdepends on several factors including, but not limited to, our ability to: • provide our consultants with either full-time or flexible-time employment; 23Table of Contents • obtain the type of challenging and high-quality projects that our consultants seek; • pay competitive compensation and provide competitive benefits; and • provide our consultants with flexibility as to hours worked and assignment of client engagements.There can be no assurance that we will be successful in accomplishing any of these factors and, even if we are, we cannot assure that we will be successful inattracting and retaining the number of highly qualified and experienced consultants necessary to maintain and grow our business.Decreased effectiveness of equity compensation could adversely affect our ability to attract and retain employees.We have historically used stock options as a component of our employee compensation program in order to align employees’ interests with the interests ofour stockholders, encourage employee retention and provide competitive compensation packages. A significant portion of our options outstanding awarded prior tofiscal 2012 are priced at more than the current per share market value of our stock, limiting the grants from those years as a significant incentive to retainemployees.Our computer hardware and software and telecommunications systems are susceptible to damage, breach or interruption.The management of our business is aided by the uninterrupted operation of our computer and telecommunication systems. These systems are vulnerable tosecurity breaches, natural disasters or other catastrophic events, computer viruses, or other interruptions or damage stemming from power outages, equipmentfailure or unintended usage by employees. In particular, our employees may have access or exposure to personally identifiable or otherwise confidentialinformation and customer data and systems, the misuse of which could result in legal liability. In addition, we rely on information technology systems to process,transmit and store electronic information and to communicate among our locations around the world and with our clients, partners and consultants. The breadth andcomplexity of this infrastructure increases the potential risk of security breaches. Security breaches, including cyber-attacks or cyber-intrusions by computerhackers, foreign governments, cyber terrorists or others with grievances against the industry in which we operate or us in particular, may disable or damage theproper functioning of our networks and systems. It is possible that our security controls over personal and other data may not prevent unauthorized access to, ordestruction, loss, theft, misappropriation or release of personally identifiable or other proprietary, confidential, sensitive or valuable information of ours or others;this access could lead to potential unauthorized disclosure of confidential Company or client information that others could use to compete against us or for otherdisruptive, destructive or harmful purposes and outcomes. Any such disclosure or damage to our networks and systems could subject us to third party claimsagainst us and reputational harm. If these events occur, our ability to attract new clients may be impaired or we may be subjected to damages or penalties. Inaddition, system-wide or local failures of these information technology systems could have a material adverse effect on our business, financial condition, results ofoperations or cash flows.Our cash and short-term investments are subject to economic risk.The Company invests its cash, cash equivalents and short-term investments in foreign and domestic bank deposits, money market funds, commercial paperand certificates of deposit. Certain of these investments are subject to general credit, liquidity, market and interest rate risks. In the event these risks caused adecline in value of any of the Company’s investments, it could adversely affect the Company’s financial condition.Our business could suffer if we lose the services of one or more key members of our senior management.Our future success depends upon the continued employment of our senior management team. The unforeseen departure of one or more key members of oursenior management team could significantly disrupt our operations.Our quarterly financial results may be subject to significant fluctuations that may increase the volatility of our stock price.Our results of operations could vary significantly from quarter to quarter. Factors that could affect our quarterly operating results include: • our ability to attract new clients and retain current clients; • the mix of client projects; 24Table of Contents • the announcement or introduction of new services by us or any of our competitors; • the expansion of the professional services offered by us or any of our competitors into new locations both nationally and internationally; • changes in the demand for our services by our clients; • the entry of new competitors into any of our markets; • the number of consultants eligible for our offered benefits as the average length of employment with the Company increases; • the amount of vacation hours used by consultants or number of holidays in a quarter, particularly the day of the week on which they occur; • availability of consultants with the requisite skills in demand by clients; • changes in the pricing of our professional services or those of our competitors; • variation in foreign exchange rates from one quarter to the next used to translate the financial results of our international operations; • the amount and timing of operating costs and capital expenditures relating to management and expansion of our business; • the timing of acquisitions and related costs, such as compensation charges that fluctuate based on the market price of our common stock; and • the periodic fourth quarter consisting of 14 weeks, which occurred during the fiscal year ended May 31, 2014 and next occurs during the fiscal yearending May 30, 2020.Due to these factors, we believe that quarter-to-quarter comparisons of our results of operations are not meaningful indicators of future performance. It ispossible that in some future periods, our results of operations may be below the expectations of investors. If this occurs, the price of our common stock coulddecline.If our internal control over financial reporting does not comply with the requirements of Sarbanes, our business and stock price could be adversely affected.Section 404 of Sarbanes requires us to evaluate periodically the effectiveness of our internal control over financial reporting, and to include a managementreport assessing the effectiveness of our internal controls as of the end of each fiscal year. Our management report on internal controls is contained in this AnnualReport on Form 10-K. Section 404 also requires our independent registered public accountant to report on our internal control over financial reporting.Our management does not expect that our internal control over financial reporting will prevent all errors or acts of fraud. A control system, no matter howwell designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a controlsystem must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherentlimitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, involving us havebeen, or will be, detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur becauseof simple errors or mistakes. Controls can also be circumvented by individual acts of a person, or by collusion among two or more people, or by managementoverride of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and we cannot assure youthat any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes inconditions or deterioration in the degree of compliance with policies and procedures. Because of the inherent limitations in a cost-effective control system,misstatements due to errors or fraudulent acts may occur and not be detected.Although our management has determined, and our independent registered public accountant has attested, that our internal control over financial reportingwas effective as of May 30, 2015, we cannot assure you that we or our independent registered public accountant will not identify a material weakness in ourinternal controls in the future. A material weakness in our internal control over financial reporting may require management and our independent registered publicaccountant to evaluate our internal 25Table of Contentscontrols as ineffective. If our internal control over financial reporting is not considered adequate, we may experience a loss of public confidence, which could havean adverse effect on our business and our stock price. Additionally, if our internal control over financial reporting otherwise fails to comply with the requirementsof Sarbanes, our business and stock price could be adversely affected.We may be subject to laws and regulations that impose difficult and costly compliance requirements and subject us to potential liability and the loss ofclients.In connection with providing services to clients in certain regulated industries, such as the gaming and energy industries, we are subject to industry-specificregulations, including licensing and reporting requirements. Complying with these requirements is costly and, if we fail to comply, we could be prevented fromrendering services to clients in those industries in the future. Additionally, changes in these requirements, or in other laws applicable to us, in the future couldincrease our costs of compliance.In addition, we may face challenges from certain state regulatory bodies governing the provision of certain professional services, like legal services or auditservices. The imposition of such regulations could require additional financial and operational burdens on our business.It may be difficult for a third party to acquire the Company, and this could depress our stock price.Delaware corporate law and our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could delay,defer or prevent a change of control of the Company or our management. These provisions could also discourage proxy contests and make it difficult for you andother stockholders to elect directors and take other corporate actions. As a result, these provisions could limit the price that future investors are willing to pay foryour shares. These provisions: • authorize our board of directors to establish one or more series of undesignated preferred stock, the terms of which can be determined by the board ofdirectors at the time of issuance; • divide our board of directors into three classes of directors, with each class serving a staggered three-year term. Because the classification of the boardof directors generally increases the difficulty of replacing a majority of the directors, it may tend to discourage a third party from making a tender offeror otherwise attempting to obtain control of us and may make it difficult to change the composition of the board of directors; • prohibit cumulative voting in the election of directors which, if not prohibited, could allow a minority stockholder holding a sufficient percentage of aclass of shares to ensure the election of one or more directors; • require that any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting ofstockholders and may not be effected by any consent in writing; • state that special meetings of our stockholders may be called only by the chairman of the board of directors, by our chief executive officer, by theboard of directors after a resolution is adopted by a majority of the total number of authorized directors, or by the holders of not less than 10% of ouroutstanding voting stock; • establish advance notice requirements for submitting nominations for election to the board of directors and for proposing matters that can be actedupon by stockholders at a meeting; • provide that certain provisions of our certificate of incorporation and bylaws can be amended only by supermajority vote (a 66 2 ⁄ 3 % majority) of theoutstanding shares. In addition, our board of directors can amend our bylaws by majority vote of the members of our board of directors; • allow our directors, not our stockholders, to fill vacancies on our board of directors; and • provide that the authorized number of directors may be changed only by resolution of the board of directors.We are required to recognize compensation expense related to employee stock options and our employee stock purchase plan. There is no assurance that theexpense that we are required to recognize measures accurately the value of our share-based payment awards and the recognition of this expense could causethe trading price of our common stock to decline.We measure and recognize compensation expense for all stock-based compensation based on estimated values. Thus, our operating results contain a non-cash charge for stock-based compensation expense related to employee stock options and our 26Table of Contentsemployee stock purchase plan. In general, accounting guidance requires the use of an option-pricing model to determine the value of share-based payment awards.This determination of value is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variablesinclude, but are not limited to, our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.Option-pricing models were developed for use in estimating the value of traded options that have no vesting restrictions and are fully transferable. Because ouremployee stock options have certain characteristics that are significantly different from traded options, and because changes in the subjective assumptions canmaterially affect the estimated value, in management’s opinion the existing valuation models may not provide an accurate measure of the value of our employeestock options. Although the value of employee stock options is determined using an option-pricing model, that value may not be indicative of the fair valueobserved in a willing buyer/willing seller market transaction.We may be unable to or elect not to pay our quarterly dividend payment.The Company pays a regular quarterly dividend, subject to quarterly board of director approval. The payment of, or continuation of, the quarterly dividend isat the discretion of our board of directors and is dependent upon our financial condition, results of operations, capital requirements, general business conditions, taxtreatment of dividends in the United States, potential future contractual restrictions contained in credit agreements and other agreements and other factors deemedrelevant by our board of directors. We can give no assurance that dividends will be declared and paid in the future. The failure to pay the quarterly dividend or thediscontinuance of the quarterly dividend could adversely affect the trading price of our common stock.We may be unable to adequately protect our intellectual property rights, including our brand name. If we fail to adequately protect our intellectual propertyrights, the value of such rights may diminish and our results of operations and financial condition may be adversely affected.We believe that establishing, maintaining and enhancing the RGP and Resources Global Professionals brand name is essential to our business. We haveapplied for United States and foreign registrations on these service marks. We have previously obtained United States registrations on our Resources Connectionservice mark and puzzle piece logo, Registration No. 2,516,522 registered December 11, 2001; No. 2,524,226 registered January 1, 2002; and No. 2,613,873,registered September 3, 2002, as well as certain foreign registrations. On March 29, 2013, we filed a United States trademark application for our RGP service markand puzzle piece logo, Serial No. 85/890,836 as well as United States trademark applications on our RGP service mark, puzzle piece and tag line, SerialNo. 85/890,838; our RGP Healthcare service mark and puzzle piece logo, Serial No. 85/890,839; our RGP Legal service mark and puzzle piece logo, SerialNo. 85/890,843; and our RGP Search service mark and puzzle piece logo, Serial No. 85/890,845. We received approval of these applications and registration wasgranted as of December 2, 2014.We had been aware from time to time of other companies using the name “Resources Connection” or some variation thereof and this contributed to ourdecision to adopt the operating company name of Resources Global Professionals. We obtained United States registration on our Resources Global Professionalsservice mark, Registration No. 3,298,841 registered September 25, 2007. However, our rights to this service mark are not currently protected in some of our foreignregistrations, and there is no guarantee that any of our pending applications for such registration (or any appeals thereof or future applications) will be successful.Although we are not aware of other companies using the name “Resources Global Professionals” at this time, there could be potential trade name or service markinfringement claims brought against us by the users of these similar names and marks and those users may have service mark rights that are senior to ours. If theseclaims were successful, we could be forced to cease using the service mark “Resources Global Professionals” even if an infringement claim is not brought againstus. It is also possible that our competitors or others will adopt service names similar to ours or that our clients will be confused by another company using a name,service mark or trademark similar to ours, thereby impeding our ability to build brand identity. We cannot assure you that our business would not be adverselyaffected if confusion did occur or if we were required to change our name.In 2014, we developed a software product for the healthcare industry to address enterprise-wide incident management and patient safety issues. We haveapplied for registration in the United States and in the appropriate jurisdictions on the service mark for this product. On February 13, 2014, we filed aNonprovisional Application, App. No. H180290, with the United States Patent Office for patent protection for this invention. There is no guarantee that thispending patent application will be approved. In addition, if our patent application is approved, third parties may knowingly or unknowingly infringe our proprietaryrights and third parties may challenge the proprietary rights held by us. In any or each of these cases, we may be required to expend significant time and expense inorder to prevent infringement or to enforce our rights. 27Table of ContentsITEM 1B.UNRESOLVED STAFF COMMENTS.Not applicable. ITEM 2.PROPERTIES.As of May 30, 2015, we maintained 45 domestic offices, all under operating lease agreements (except for the Irvine, California location), in the followingmetropolitan areas: Phoenix, Arizona Honolulu, Hawaii Cincinnati, OhioIrvine, California (2) Chicago, Illinois Cleveland, OhioLos Angeles, California (2) Oakbrook Terrace, Illinois Columbus, OhioSacramento, California Indianapolis, Indiana Tulsa, OklahomaSanta Clara, California Boston, Massachusetts Portland, OregonSan Diego, California Detroit, Michigan Philadelphia, PennsylvaniaSan Francisco, California Minneapolis, Minnesota Pittsburgh, PennsylvaniaWalnut Creek, California Kansas City, Missouri Nashville, TennesseeWoodland Hills, California St. Louis, Missouri Dallas, TexasDenver, Colorado Las Vegas, Nevada Houston, TexasHartford, Connecticut Parsippany, New Jersey San Antonio, TexasStamford, Connecticut Princeton, New Jersey Seattle, WashingtonFort Lauderdale, Florida New York, New York Milwaukee, WisconsinTampa, Florida Charlotte, North Carolina Washington, D.C. (McLean, Virginia)Atlanta, Georgia As of May 30, 2015, we maintained 23 international offices under operating lease agreements, located in the following cities and countries: Sydney, Australia Dublin, Ireland Hong Kong, People’s Republic of ChinaBrussels, Belgium Milan, Italy Shanghai, People’s Republic of ChinaCalgary, Canada Tokyo, Japan Manila, PhilippinesToronto, Canada Mexico City, Mexico SingaporeParis, France Amsterdam (Utrecht), Netherlands Seoul, South KoreaFrankfurt, Germany Oslo, Norway Stockholm, SwedenBangalore, India Beijing, People’s Republic of China Taipei, TaiwanMumbai, India London, United KingdomOur corporate offices are located in Irvine, California. We own an approximately 56,200 square foot office building in Irvine, California, of which weoccupied approximately 38,000 square feet as of May 30, 2015, including space occupied by our Orange County, California practice. Approximately 18,200 squarefeet is leased to independent third parties. ITEM 3.LEGAL PROCEEDINGS.We are not currently subject to any material legal proceedings; however, we are a party to various legal proceedings arising in the ordinary course of ourbusiness. ITEM 4.MINE SAFETY DISCLOSURES .Not applicable. 28Table of ContentsPART II ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES .Price Range of Common StockOur common stock has traded on the NASDAQ Global Select Market under the symbol “RECN” since December 15, 2000. Prior to that time, there was nopublic market for our common stock. The approximate number of holders of record of our common stock as of July 6, 2015 was 36 (a holder of record is the nameof an individual or entity that an issuer carries in its records as the registered holder (not necessarily the beneficial owner) of the issuer’s securities).The following table sets forth the range of high and low closing sales prices reported on the NASDAQ Global Select Market for our common stock for theperiods indicated. Price Range of Common Stock High Low Fiscal 2015: First Quarter $15.79 $11.90 Second Quarter $15.87 $13.04 Third Quarter $18.23 $15.09 Fourth Quarter $17.90 $15.69 Fiscal 2014: First Quarter $13.74 $10.95 Second Quarter $13.86 $11.67 Third Quarter $14.98 $12.94 Fourth Quarter $14.96 $12.07 Dividend PolicyOur board of directors has established a quarterly dividend, subject to quarterly board of directors’ approval. Pursuant to declaration and approval by ourboard of directors, we paid a dividend of $0.08 per share of common stock during each quarter in fiscal 2015 and $0.07 per share of common stock during eachquarter in fiscal 2014. On April 28, 2015, our board of directors declared a regular quarterly dividend of $0.08 per share of our common stock. The dividend waspayable on June 18, 2015 to stockholders of record at the close of business on May 21, 2015. Continuation of the quarterly dividend will be at the discretion of ourboard of directors and will depend upon our financial condition, results of operations, capital requirements, general business condition, contractual restrictionscontained in our credit agreement and other agreements, and other factors deemed relevant by our board of directors.Issuances of Unregistered SecuritiesNone.Issuer Purchases of Equity SecuritiesIn April 2011, our board of directors approved a stock repurchase program, authorizing the purchase, at the discretion of our senior executives, of ourcommon stock for an aggregate dollar limit not to exceed $150.0 million. This program commenced in July 2011 when the previous program’s authorized limit hadbeen met. Subject to the aggregate dollar limit, the currently authorized stock repurchase program does not have an expiration date. Repurchases under the programmay take place in the open market or in privately negotiated transactions and may be made pursuant to a Rule 10b5-1 plan. 29Table of ContentsThe table below provides information regarding our stock repurchases made during the fourth quarter of fiscal 2015 under our stock repurchase program. Period Total Number of Shares Purchased AveragePrice Paid per Share Total Number ofShares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet be Purchased Under theApril 2011 Program March 1, 2015 — March 28, 2015 — $— — $22,651,436 March 29, 2015 — April 25, 2015 75,000 $16.64 75,000 21,403,084 April 26, 2015 — May 30, 2015 289,415 $16.20 289,415 16,713,699 Total March 1, 2015 — May 30, 2015 364,415 $16.29 364,415 $16,713,699 Performance GraphSet forth below is a line graph comparing the annual percentage change in the cumulative total return to the holders of our common stock with thecumulative total return of the Russell 3000 Index, a customized peer group consisting of eleven companies listed below the following table and a combinedclassification of companies under Standard Industry Codes as 8742-Management Consulting Services for the five years ended May 30, 2015. The graph assumes$100 was invested on May 28, 2010 in our common stock and in each index (based on prices from the close of trading on May 28, 2010), and that all dividends arereinvested. Stockholder returns over the indicated period may not be indicative of future stockholder returns.The information contained in the performance graph shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall suchinformation be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that theCompany specifically incorporates it by reference into such filing. For the Fiscal Years Ended May 28, 2010 May 28, 2011 May 26, 2012 May 25, 2013 May 31, 2014 May 30, 2015 Resources Connection, Inc. $100.00 $88.36 $76.50 $71.28 $82.42 $106.38 Russell 3000 $100.00 $127.04 $124.67 $159.42 $192.22 $215.01 SIC Code 8742 — Management Consulting $100.00 $113.49 $106.18 $149.55 $179.56 $220.92 Peer Group $100.00 $111.94 $107.96 $135.90 $161.38 $174.48 The Company’s customized peer group includes the following eleven professional services companies that we believe reflect the competitive landscape inwhich the Company operates and acquires talent: CRA International, Inc.; FTI Consulting, Inc.; Heidrick & Struggles International, Inc.; Hudson Global, Inc.;Huron Consulting Group Inc.; ICF International, Inc.; Kforce, Inc.; Korn/Ferry International; Navigant Consulting, Inc.; The Advisory Board Company; and TheCorporate Executive Board Company. The Company’s compensation committee, a committee of our board of directors comprised of independent directors, reviewsthe composition of the peer group annually to ensure its alignment with the Company’s size, practice areas, business model delivery and geographic reach. 30Table of ContentsITEM 6.SELECTED FINANCIAL DATA.You should read the following selected historical consolidated financial data in conjunction with our Consolidated Financial Statements and related notesbeginning on page 47 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 33. The ConsolidatedStatements of Operations data for the years ended May 26, 2012 and May 28, 2011 and the Consolidated Balance Sheet data at May 25, 2013, May 26, 2012 andMay 28, 2011 were derived from our audited Consolidated Financial Statements that are not included in this Annual Report on Form 10-K. The ConsolidatedStatements of Operations data for the years ended May 30, 2015, May 31, 2014 and May 25, 2013 and the Consolidated Balance Sheet data at May 30, 2015 andMay 31, 2014 were derived from our audited Consolidated Financial Statements that are included elsewhere in this Annual Report on Form 10-K. Historical resultsare not necessarily indicative of results that may be expected for any future periods. Years Ended May 30, 2015 May 31, 2014 (1) May 25, 2013 May 26, 2012 May 28, 2011 (In thousands, except per common share and other data) Revenue $590,589 $567,181 $556,334 $571,763 $545,546 Direct cost of services, primarily payroll and related taxes for professionalservices employees 362,227 351,359 342,040 352,524 335,071 Gross margin 228,362 215,822 214,294 219,239 210,475 Selling, general and administrative expenses 173,797 172,531 168,318 170,992 172,622 Employee portion of contingent consideration (2) — — — (500) — Contingent consideration adjustment (3) — — — (33,440) (25,852) Amortization of intangible assets 918 1,688 1,694 3,364 5,030 Depreciation expense 3,389 3,628 4,580 5,731 7,223 Income from operations 50,258 37,975 39,702 73,092 51,452 Interest income (148) (168) (175) (252) (473) Income before provision for income taxes 50,406 38,143 39,877 73,344 51,925 Provision for income taxes (4) 22,898 18,257 19,373 32,202 27,070 Net income $27,508 $19,886 $20,504 $41,142 $24,855 Net income per common share: Basic $0.73 $0.51 $0.50 $0.94 $0.54 Diluted $0.72 $0.51 $0.50 $0.94 $0.53 Weighted average common shares outstanding: Basic 37,825 39,216 41,108 43,541 46,124 Diluted 38,248 39,307 41,151 43,599 46,489 Cash dividends declared per common share $0.32 $0.28 $0.24 $0.20 $0.16 Other Data: Number of offices open at end of year 68 68 73 77 80 Total number of consultants on assignment at end of year 2,516 2,401 2,208 2,317 2,249 Cash dividends paid $11,748 $10,625 $9,497 $8,306 $5,538 (1)The year ended May 31, 2014 consisted of 53 weeks. All other years presented consisted of 52 weeks.(2)During the year ended May 26, 2012, the Company determined that the estimated contingent consideration accrued in a prior year and potentially payable toemployees related to the Sitrick Brincko Group acquisition would not be payable and the accrual was reversed.(3)The contingent consideration adjustment includes a net reduction of the contingent consideration liability related to the purchase of Sitrick Brincko Group of$33.4 million and $25.9 million for the years ended May 26, 2012 and May 28, 2011, respectively. The fiscal 2012 and fiscal 2011 net adjustments arerelated to revised estimates of fair value of contingent 31Table of Contents consideration based upon updates to the probability weighted assessment of various projected average earnings before interest, taxes, depreciation andamortization (“EBITDA”) scenarios associated with the acquisition of Sitrick Brincko Group.(4)The year ended May 28, 2011 includes the establishment of valuation allowances of $1.5 million on deferred tax assets, including certain foreign operatingloss carryforwards. May 30, May 31, May 25, May 26, May 28, 2015 2014 2013 2012 2011 (Amounts in thousands) Cash, cash equivalents, short-term investments and U.S. government agency securities $112,238 $114,277 $119,012 $128,115 $144,873 Working capital 152,760 150,287 155,844 166,584 182,675 Total assets 416,981 420,078 417,640 430,719 476,397 Stockholders’ equity 340,452 345,761 352,327 365,868 372,726 32Table of ContentsITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements andrelated notes. This discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially fromthose anticipated in these forward-looking statements as a result of certain factors including, but not limited to, those discussed in Part I Item 1A. “Risk Factors.”and elsewhere in this Annual Report on Form 10-K.OverviewRGP is a multinational consulting firm that provides consulting and business initiative support services to its global client base in the areas of accounting;finance; corporate governance, risk and compliance management; corporate advisory, strategic communications and restructuring; information management; humancapital; supply chain management; healthcare solutions; and legal and regulatory. We assist our clients with projects requiring specialized expertise in: • Finance and accounting services including process transformation and improvement; financial reporting and analysis; technical and operationalaccounting; merger and acquisition due diligence; audit response; implementation of new accounting standards such as the new requirements forrevenue recognition; and remediation support; • Information management services including strategy development; program and project management; business and technology integration; datastrategy, including data security and privacy; and Business Performance Management; • Corporate advisory, strategic communications and restructuring services; • Corporate governance, risk and compliance management services including contract and regulatory compliance efforts under, for example, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Sarbanes Oxley Act of 2002 (“Sarbanes”); Enterprise Risk Management; internalcontrols management; and operation and IT audits; • Supply chain management services including supply chain strategy development; procurement and supplier management; logistics and materialsmanagement; supply chain planning and forecasting; and Conflict Minerals and Unique Device Identification compliance; • Human capital services including change management; organization development and effectiveness; and optimization of human resources technologyand operations; and • Legal and regulatory services with projects, secondments or tactical needs including commercial transactions; compliance initiatives; law departmentoperations and business strategy; and litigation support.We were founded in June 1996 by a team at Deloitte, led by our chairman, Donald B. Murray, who was then a senior partner with Deloitte. Our founderscreated Resources Connection to capitalize on the increasing demand for high quality outsourced professional services. We operated as a part of Deloitte until April1999. In April 1999, we completed a management-led buyout in partnership with several investors. In December 2000, we completed our initial public offering ofcommon stock and began trading on the NASDAQ Stock Market. We currently trade on the NASDAQ Global Select Market. We operate under the acronym RGP,branding for our operating entity name of Resources Global Professionals.We operated solely in the United States until fiscal year 2000, when we opened our first three international offices and began to expand geographically tomeet the demand for project consulting services across the world. As of May 30, 2015, we served clients from offices in 20 countries, including 23 internationaloffices and 45 offices in the United States. Our global footprint allows the Company to support the global initiatives of our multinational client base.We expect to continue opportunistic domestic and multinational expansion while also investing in complementary professional services lines that we believewill augment our service offerings.We primarily charge our clients on an hourly basis for the professional services of our consultants. We recognize revenue once services have been renderedand invoice the majority of our clients in the United States on a weekly basis. Some of our clients served by our international offices are billed on a monthly basis.Our clients are contractually obligated to pay us for all hours 33Table of Contentsbilled. To a much lesser extent, we also earn revenue if a client hires one of our consultants. This type of contractually non-refundable revenue is recognized at thetime our client completes the hiring process and represented 0.5% of our revenue for each of the years ended May 30, 2015, May 31, 2014 and May 25, 2013. Weperiodically review our outstanding accounts receivable balance and determine an estimate of the amount of those receivables we believe may prove uncollectible.Our provision for bad debts, if any, is included in our selling, general and administrative expenses.The costs to pay our professional consultants and all related benefit and incentive costs, including provisions for paid time off and other employee benefits,are included in direct cost of services. We pay most of our consultants on an hourly basis for all hours worked on client engagements and, therefore, direct cost ofservices tends to vary directly with the volume of revenue we earn. We expense the benefits we pay to our consultants as they are earned. These benefits includepaid time off and holidays; a discretionary bonus plan; subsidized group health, dental and life insurance programs; a matching 401(k) retirement plan; the ability toparticipate in the Company’s Employee Stock Purchase Plan (“ESPP”); and professional development and career training. In addition, we pay the related costs ofemployment, including state and federal payroll taxes, workers’ compensation insurance, unemployment insurance and other costs. Typically, a consultant mustwork a threshold number of hours to be eligible for all of the benefits. We recognize direct cost of services when incurred.Selling, general and administrative expenses include the payroll and related costs of our internal management as well as general and administrative,marketing and recruiting costs. Our sales and marketing efforts are led by our management team who are salaried employees and earn bonuses based on operatingresults for the Company as a whole and within each individual’s geographic market.The Company’s fiscal year consists of 52 or 53 weeks, ending on the Saturday in May closest to May 31. Fiscal years 2015 and 2013 consisted of four 13week quarters and a total of 52 weeks of activity for the fiscal year. For fiscal years of 53 weeks, such as fiscal 2014, the first three quarters consisted of 13 weekseach and the fourth quarter consisted of 14 weeks.Critical Accounting PoliciesThe following discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which havebeen prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States. The preparation of these financial statements requiresus to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of thefinancial statements and the reported amounts of revenues and expenses during the reporting period.The following represents a summary of our critical accounting policies, defined as those policies that we believe: (a) are the most important to the portrayalof our financial condition and results of operations and (b) involve inherently uncertain issues that require management’s most difficult, subjective or complexjudgments.Valuation of long-lived assets — We assess the potential impairment of long-lived tangible and intangible assets periodically or whenever events or changesin circumstances indicate that the carrying value may not be recoverable. Our goodwill and certain other intangible assets are not subject to periodic amortization.These assets are considered to have an indefinite life and their carrying values are required to be assessed by us for impairment at least annually. Depending onfuture market values of our stock, our operating performance and other factors, these assessments could potentially result in impairment reductions of theseintangible assets in the future and this adjustment may materially affect the Company’s future financial results and financial condition.Allowance for doubtful accounts — We maintain an allowance for doubtful accounts for estimated losses resulting from our clients failing to make requiredpayments for services rendered. We estimate this allowance based upon our knowledge of the financial condition of our clients (which may not include knowledgeof all significant events), review of historical receivable and reserve trends and other pertinent information. While such losses have historically been within ourexpectations and the provisions established, we cannot guarantee that we will continue to experience the same credit loss rates that we have in the past. Asignificant change in the liquidity or financial position of our clients could cause unfavorable trends in receivable collections and additional allowances may berequired. These additional allowances could materially affect the Company’s future financial results. 34Table of ContentsIncome taxes — In order to prepare our Consolidated Financial Statements, we are required to make estimates of income taxes, if applicable, in eachjurisdiction in which we operate. The process incorporates an assessment of any current tax exposure together with temporary differences resulting from differenttreatment of transactions for tax and financial statement purposes. These differences result in deferred tax assets and liabilities that are included in our ConsolidatedBalance Sheets. The recovery of deferred tax assets from future taxable income must be assessed and, to the extent recovery is not likely, we will establish avaluation allowance. An increase in the valuation allowance results in recording additional tax expense and any such adjustment may materially affect theCompany’s future financial result. If the ultimate tax liability differs from the amount of tax expense we have reflected in the Consolidated Statements ofOperations, an adjustment of tax expense may need to be recorded and this adjustment may materially affect the Company’s future financial results and financialcondition.Revenue recognition — We primarily charge our clients on an hourly basis for the professional services of our consultants. We recognize revenue onceservices have been rendered and invoice the majority of our clients in the United States on a weekly basis. Some of our clients served by our international officesare billed on a monthly basis. Our clients are contractually obligated to pay us for all hours billed. To a much lesser extent, we also earn revenue if a client hiresone of our consultants. This type of contractually non-refundable revenue is recognized at the time our client completes the hiring process.Stock-based compensation — Under our 2014 Performance Incentive Plan, officers, employees, and outside directors have received or may receive grants ofrestricted stock, stock units, options to purchase common stock or other stock or stock-based awards. Under our ESPP, eligible officers and employees maypurchase our common stock in accordance with the terms of the plan.The Company estimates a value for employee stock options on the date of grant using an option-pricing model. We have elected to use the Black-Scholesoption-pricing model which takes into account assumptions regarding a number of highly complex and subjective variables. These variables include the expectedstock price volatility over the term of the awards and actual and projected employee stock option exercise behaviors. Additional variables to be considered are theexpected term, expected dividends and the risk-free interest rate over the expected term of our employee stock options. In addition, because stock-basedcompensation expense recognized in the Consolidated Statements of Operations is based on awards ultimately expected to vest, it is reduced for estimatedforfeitures. Forfeitures must be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.Forfeitures are estimated based on historical experience. If facts and circumstances change and we employ different assumptions in future periods, thecompensation expense recorded may differ materially from the amount recorded in the current period.The Company uses its historical volatility over the expected life of the stock option award to estimate the expected volatility of the price of its commonstock. The risk-free interest rate assumption is based upon observed interest rates appropriate for the term of our employee stock options. The impact of expecteddividends ($0.08 per share for each quarter during fiscal 2015 and $0.07 per share for each quarter of fiscal 2014) is also incorporated in determining the estimatedvalue per share of employee stock option grants. Such dividends are subject to quarterly board of director approval. The Company’s expected life of stock optiongrants is 5.5 years for non-officers and 7.5 years for officers. The Company uses its historical volatility over the expected life of the stock option award to estimatethe expected volatility of the price of its common stock. The Company reviews the underlying assumptions related to stock-based compensation at least annually.We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results ofwhich form the basis for making judgments about the carrying value of assets and liabilities. Actual results may differ from these estimates under differentassumptions or conditions. 35Table of ContentsResults of OperationsThe following tables set forth, for the periods indicated, our Consolidated Statements of Operations data. These historical results are not necessarilyindicative of future results. For the Years Ended May 30, 2015 May 31, 2014 May 25, 2013 (Amounts in thousands) Revenue $590,589 $567,181 $556,334 Direct cost of services 362,227 351,359 342,040 Gross margin 228,362 215,822 214,294 Selling, general and administrative expenses 173,797 172,531 168,318 Amortization of intangible assets 918 1,688 1,694 Depreciation expense 3,389 3,628 4,580 Income from operations 50,258 37,975 39,702 Interest income (148) (168) (175) Income before provision for income taxes 50,406 38,143 39,877 Provision for income taxes 22,898 18,257 19,373 Net income $27,508 $19,886 $20,504 Our operating results for the periods indicated are expressed as a percentage of revenue below. For the Years Ended May 30,2015 May 31,2014 May 25,2013 Revenue 100.0% 100.0% 100.0% Direct cost of services 61.3 61.9 61.5 Gross margin 38.7 38.1 38.5 Selling, general and administrative expenses 29.4 30.4 30.3 Amortization of intangible assets 0.2 0.3 0.3 Depreciation expense 0.5 0.7 0.8 Income from operations 8.6 6.7 7.1 Interest income — — (0.1) Income before provision for income taxes 8.6 6.7 7.2 Provision for income taxes 3.9 3.2 3.5 Net income 4.7% 3.5% 3.7% 36Table of ContentsWe also assess the results of our operations using EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. EBITDA is defined as our earnings beforeinterest, taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA plus stock-based compensation expense. Adjusted EBITDA Margin iscalculated by dividing Adjusted EBITDA by revenue. These measures assist management in assessing our core operating performance. The following tablepresents EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for the periods indicated and includes a reconciliation of such measures to net income, themost directly comparable GAAP financial measure: For the Years Ended May 30, 2015 May 31, 2014 May 25, 2013 (Amounts in thousands) Net income $27,508 $19,886 $20,504 Adjustments: Amortization of intangible assets 918 1,688 1,694 Depreciation expense 3,389 3,628 4,580 Interest income (148) (168) (175) Provision for income taxes 22,898 18,257 19,373 EBITDA 54,565 43,291 45,976 Stock-based compensation expense 5,989 6,519 7,188 Adjusted EBITDA $60,554 $49,810 $53,164 Revenue $590,589 $567,181 $556,334 Adjusted EBITDA Margin 10.3% 8.8% 9.6% The financial measures and key performance indicators we use to assess our financial and operating performance above are not defined by, or calculated inaccordance with, GAAP. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that (i) excludes amounts, or issubject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAPin the consolidated statement of operations; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded fromthe comparable measure so calculated and presented.EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. We believe that EBITDA, Adjusted EBITDA and AdjustedEBITDA Margin provide useful information to our investors because they are financial measures used by management to assess the core performance of theCompany. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are not measurements of financial performance or liquidity under GAAP and should not beconsidered in isolation or construed as substitutes for net income or other cash flow data prepared in accordance with GAAP for purposes of analyzing ourprofitability or liquidity. These measures should be considered in addition to, and not as a substitute for, net income, earnings per share, cash flows or othermeasures of financial performance prepared in conformity with GAAP.Further, EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin have the following limitations: • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the futureand EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; • Equity based compensation is an element of our long-term incentive compensation program, although we exclude it as an expense from AdjustedEBITDA when evaluating our ongoing operating performance for a particular period; and • Other companies in our industry may calculate Adjusted EBITDA and Adjusted EBITDA Margin differently than we do, limiting their usefulness as acomparative measure.Because of these limitations, EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin should not be considered a substitute for performance measurescalculated in accordance with GAAP. 37Table of ContentsYear Ended May 30, 2015 Compared to Year Ended May 31, 2014Computations of percentage change period over period are based upon our results, as rounded and presented herein.Revenue. Revenue increased $23.4 million, or 4.1%, to $590.6 million for the year ended May 30, 2015 from $567.2 million for the year ended May 31,2014. While we deliver our services to clients in a similar fashion across the globe, in fiscal 2015 revenue increased in North America and Asia Pacific but declinedin Europe as compared to fiscal 2014. In light of continuing global economic uncertainty, we believe that certain geographic sectors of our global clients andprospects are initiating operational improvement projects cautiously, resulting in reduced levels of consulting spending, particularly in most European markets.Results in fiscal 2015 consisted of 52 weeks while fiscal 2014 consisted of 53 weeks. Revenue during the extra week of fiscal 2014 (which included the MemorialDay holiday in the United States) was $9.8 million. Excluding this extra week in fiscal 2014, revenue in fiscal 2015 increased $33.2 million (6.0%) over the fiscal2014 amount. Comparing the 52-week period in fiscal 2015 to the 53-week period in fiscal 2014, the number of hours worked increased 8.1% compared to the prioryear, offset by a 4.0% decrease in average bill rates from the prior year.The number of consultants on assignment at the end of fiscal 2015 was 2,516 compared to the 2,401 consultants engaged at the end of fiscal 2014 (theaverage number of consultants assigned was 2,487 in fiscal 2015 compared to 2,254 in fiscal 2014).We operated 68 offices (23 abroad) at both May 30, 2015 and May 31, 2014. Our clients do not sign long-term contracts with us. As such, there can be noassurance as to future demand levels for the services that we provide or that future results can be reliably predicted by considering past trends.Revenue for the Company’s major geographies across the globe consisted of the following (dollars in thousands): Revenue for the Years Ended % of Total May 30, 2015 May 31, 2014 % Change May 30,2015 May 31,2014 North America $492,207 $453,659 8.5% 83.3% 80.0% Europe 59,350 76,960 (22.9)% 10.1 13.6 Asia Pacific 39,032 36,562 6.8% 6.6 6.4 Total $590,589 $567,181 4.1% 100.0% 100.0% Our financial results are subject to fluctuations in the exchange rates of foreign currencies in relation to the United States dollar. Revenues denominated inforeign currencies are translated into United States dollars at the monthly average exchange rates in effect during each period. Thus, as the value of the UnitedStates dollar fluctuates relative to the currencies in our non-United States based operations, our revenue can be impacted. Using the comparable fiscal 2014conversion rates, international revenues would have been higher than reported under GAAP by $8.8 million for the year ended May 30, 2015. Using these constantcurrency rates, the increase in revenue in North America and Asia Pacific would have been 8.8% and 12.1%, respectively, while the decline in Europe would havebeen 15.5%.The strengthening of the U.S. dollar against most of the currencies of the international countries in which we operate was partially the cause of the averagebill rate decline. Using the same exchange rates in fiscal 2015 as in fiscal 2014, the average bill rate would have decreased 2.4%. Average bill rates were alsoadversely impacted by a significant client engagement in the Philippines where bill rates are lower than most metropolitan areas.Direct Cost of Services. Direct cost of services increased $10.8 million, or 3.1%, to $362.2 million for the year ended May 30, 2015 from $351.4 million forthe year ended May 31, 2014. Comparing fiscal 2015 to fiscal 2014, direct cost of services increased primarily because of an 8.1% increase in hours worked,partially offset by a 4.8% decrease in the average consultant pay rate per hour. As noted above, fiscal 2015 consisted of 52 weeks while fiscal 2014 consisted of 53weeks; we estimate that fiscal 2014 direct cost of services included an additional approximate $5.9 million because of this extra week. The direct cost of services asa percentage of revenue (“direct cost of services percentage”) was 61.3% and 61.9% for the years ended May 30, 2015 and May 31, 38Table of Contents2014, respectively. The improvement in the direct cost of services percentage resulted primarily from a favorable change in the bill rate/pay rate relationship (billrates were down 4.0% overall while the pay rate average decreased 4.8%). Average pay rates also decreased because of the strengthening U.S. dollar (similar toimpact on average bill rates) and a significant client engagement in the Philippines where bill rates are lower than most metropolitan areas.Our target direct cost of services percentage is 60% for all of our offices.Selling, General and Administrative Expenses (“S, G & A”). S, G & A increased $1.3 million, or 0.8%, to $173.8 million for the year ended May 30, 2015from $172.5 million for the year ended May 31, 2014. However, S, G & A decreased as a percentage of revenue from 30.4% in fiscal 2014 to 29.4% in fiscal 2015.Management and administrative head count was 742 at the end of fiscal 2015 and 712 at the end of fiscal 2014. The increase in S, G & A between the two fiscalperiods was primarily attributable to headcount additions and related costs in U.S. offices experiencing growth. Comparing total S, G &A in fiscal 2015 to anadjusted 52-week fiscal 2014, S, G & A would have increased about 2.1%.Sequential Operations. On a sequential quarter basis, fiscal 2015 fourth quarter revenue increased 1.4% to $148.8 million from $146.8 million, and hoursworked improved 2.6% while bill rates were down 1.7%. The decrease in bill rates is attributable to the strengthening of the U.S. dollar against currencies in mostof our foreign operations. The Company’s sequential revenue increased in North America (0.3%) and Asia Pacific (17.4%), and was flat in Europe; on a constantcurrency basis, sequential revenue increased in North America (0.4%), Asia Pacific (18.5%) and Europe (5.9%). In addition, while the fourth quarter contained theMemorial Day holiday in the U.S., the third quarter included the Christmas, New Year’s and Chinese New Year’s holidays.The direct cost of services percentage improved from 62.7% in the third quarter to 61.2% in the fourth quarter. This improvement is primarily attributable toonly one compensated holiday in the United States during the fourth quarter compared to two in the third quarter and the declining impact of payroll taxes as thecalendar year progresses.S, G & A expenses decreased $1.0 million from the quarter ended February 28, 2015 to the quarter ended May 30, 2015, primarily as a result of the decliningimpact of payroll taxes as the calendar year progresses and reduced spending for marketing. The leverage of S, G & A expenses improved to 28.5% in the fourthquarter of fiscal 2015 compared to 29.6% in the third quarter. This was attributable to the improved revenue in the fourth quarter, which provided leverage oncertain fixed expenses, such as rent, in the fourth quarter.Amortization and Depreciation Expense. Amortization of intangible assets decreased from $1.7 million in fiscal 2014 to $918,000 in fiscal 2015. Duringfiscal 2015, virtually all of the Company’s intangible assets were fully amortized except for a $90,000 remaining balance as of May 30, 2015. The remainingbalance will be amortized during the fiscal year ending May 28, 2016. After fiscal 2016, absent an acquisition, there will be no remaining unamortized balances ofintangible assets.Depreciation expense decreased from $3.6 million for the year ended May 31, 2014 to $3.4 million for the year ended May 30, 2015. Depreciation decreasedas a number of assets were fully depreciated during fiscal 2014 and fiscal 2015.Interest Income. Interest income declined to $148,000 in fiscal 2015 compared to $168,000 in fiscal 2014. The decrease in interest income is the result oflower cash balances available for investment in fiscal 2015. The Company has invested available cash in certificates of deposit and money market investments thathave been classified as cash equivalents due to the short maturities of these investments. As of May 30, 2015, the Company had $25.0 million of investments incommercial paper and U.S. Government Agency securities with remaining maturity dates between three months and one year from the balance sheet date which areclassified as short-term investments and considered “held-to-maturity” securities.Income Taxes. The provision for income taxes increased from $18.3 million (effective rate of 47.9%) for the year ended May 31, 2014 to $22.9 million(effective rate of 45.4%) for the year ended May 30, 2015. The provision for taxes in both fiscal 2015 and fiscal 2014 resulted from taxes on income fromoperations in the United States and certain other foreign jurisdictions, a lower benefit for losses in certain foreign jurisdictions with tax rates lower than the UnitedStates statutory rates, and no benefit for losses in jurisdictions in which a valuation allowance on operating loss carryforwards had previously been established. Theincrease in the provision for income taxes is because of higher pretax income, primarily from the U.S. The effective tax rate 39Table of Contentsdecreased because of higher U.S. pretax income coupled with lower international pretax losses. Decreased losses from countries with valuation allowances allowthe tax expense to be spread over a higher pretax base, which lowers the effective tax rate. The effective tax rate in both fiscal years disproportionally magnifies theeffect of the components of the tax rate that differ from the standard federal rate, including non-deductible permanent differences and incentive stock options(“ISOs”). Based upon current economic circumstances, management will continue to monitor the need to record additional or release existing valuation allowancesin the future, primarily related to certain foreign jurisdictions. Realization of the currently reserved foreign deferred tax assets is dependent upon generatingsufficient future taxable income in those foreign territories.Periodically, the Company reviews the components of both book and taxable income to analyze the adequacy of the tax provision. There can be no assurancethat the Company’s effective tax rate will remain constant in the future because of the lower benefit from the United States statutory rate for losses in certainforeign jurisdictions, the limitation on the benefit for losses in jurisdictions in which a valuation allowance for operating loss carryforwards has previously beenestablished, and the unpredictability of timing and the amount of eligible disqualifying ISO exercises.The Company cannot recognize a tax benefit for certain ISO grants unless and until the holder exercises his or her option and then sells the shares within acertain period of time. In addition, the Company can only recognize a potential tax benefit for employees’ acquisition and subsequent sale of shares purchasedthrough the ESPP if the sale occurs within a certain defined period. As a result, the Company’s provision for income taxes is likely to fluctuate from these factorsfor the foreseeable future. Further, those tax benefits associated with ISO grants fully vested at the date of adoption of the current accounting rules governing stockawards will be recognized as additions to paid-in capital when and if those options are exercised and not as a reduction to the Company’s tax provision. TheCompany recognized a benefit of approximately $2.2 million and $2.1 million related to stock-based compensation for nonqualified stock options expensed and foreligible disqualifying ISO exercises during fiscal 2015 and 2014, respectively. The proportion of expense related to non-qualified stock option grants (for which theCompany may recognize a tax benefit in the same quarter as the related compensation expense in most instances) is significant as compared to expense related toISOs (including ESPPs). However, the timing and amount of eligible disqualifying ISO exercises cannot be predicted. The Company predominantly grantsnonqualified stock options to employees in the United States.The Company has maintained a position of being indefinitely reinvested in its foreign subsidiaries’ earnings by not expecting to remit foreign earnings in theforeseeable future. Being indefinitely reinvested does not require a deferred tax liability to be recognized on the foreign earnings. Management’s indefinitereinvestment position is supported by: 1)RGP in the United States has generated more than enough cash to fund operations and expansion, including acquisitions. RGP uses its excess cash to,at its discretion, return cash to shareholders through dividend payments and stock repurchases. 2)RGP in the United States has no debt or any other current or known obligations that require cash to be remitted from foreign subsidiaries. 3)Management’s growth objectives include allowing cash to accumulate in RGP’s profitable foreign subsidiaries with the expectation of findingstrategic expansion plans to further penetrate RGP’s most successful locations. 4)The consequences of distributing foreign earnings have historically been deemed to be tax inefficient for RGP or not materially beneficial.Year Ended May 31, 2014 Compared to Year Ended May 25, 2013Computations of percentage change period over period are based upon our results, as rounded and presented herein.Revenue. Revenue increased $10.9 million, or 2.0%, to $567.2 million for the year ended May 31, 2014 from $556.3 million for the year ended May 25,2013. We deliver our services to clients in a similar fashion across the globe; however in fiscal 2014, revenue increased in North America but declined in Europeand Asia Pacific as compared to fiscal 2013. Results in fiscal 2014 consisted of 53 weeks while fiscal 2013 consisted of 52 weeks. Revenue during the extra weekof fiscal 2014 (which included the Memorial Day holiday in the United States) was $9.8 million. Excluding this extra week in fiscal 2014, revenue increased $1.1million (0.2%) over the fiscal 2013 amount. For the 53-week period in fiscal 2014, the number of hours worked increased 3.5% compared to the prior year, offsetby a 1.6% decrease in average bill rates from the prior year. 40Table of ContentsThe number of consultants on assignment at the end of fiscal 2014 was 2,401 compared to the 2,208 consultants engaged at the end of fiscal 2013 (theaverage number of consultants assigned was 2,254 in fiscal 2014 compared to 2,270 in fiscal 2013).We operated 68 offices (23 abroad) at May 31, 2014 and 73 offices (26 abroad) at May 25, 2013 as we consolidated certain offices in contiguous areas. Ourclients do not sign long-term contracts with us. As such, there can be no assurance as to future demand levels for the services that we provide or that future resultscan be reliably predicted by considering past trends.Revenue for the Company’s major geographies across the globe consisted of the following (dollars in thousands): Revenue for the Years Ended % of Total May 31, 2014 May 25, 2013 % Change May 31,2014 May 25,2013 North America $453,659 $436,025 4.0% 80.0% 78.4% Europe 76,960 83,441 (7.8)% 13.6 15.0 Asia Pacific 36,562 36,868 (0.8)% 6.4 6.6 Total $567,181 $556,334 1.9% 100.0% 100.0% Our financial results are subject to fluctuations in the exchange rates of foreign currencies in relation to the United States dollar. Revenues denominated inforeign currencies are translated into United States dollars at the monthly average exchange rates in effect during each quarter. Thus, as the value of the UnitedStates dollar fluctuates relative to the currencies in our non-United States based operations, our revenue can be impacted. Using the comparable fiscal 2013conversion rates, international revenues would have been higher than reported under GAAP by $981,000 for the year ended May 31, 2014.Direct Cost of Services. Direct cost of services increased $9.4 million, or 2.7%, to $351.4 million for the year ended May 31, 2014 from $342.0 million forthe year ended May 25, 2013. Direct cost of services increased primarily because of a 3.5% increase in hours worked compared to the prior year while the averageconsultant pay rate per hour was flat compared to the prior year. As noted above, fiscal 2014 consisted of 53 weeks while fiscal 2013 consisted of 52 weeks; weestimate this added approximately $5.9 million to the total of direct cost of services for fiscal 2014. The direct cost of services percentage was 61.9% and 61.5% forthe years ended May 31, 2014 and May 25, 2013, respectively. The increase in the direct cost of services percentage resulted primarily from an unfavorable changein the bill rate/pay rate relationship (bill rates were down 1.6% overall compared to no change in pay rate average) offset by a decrease in zero margin clientreimbursements.Our target direct cost of services percentage is 60% for all of our offices.Selling, General and Administrative Expenses. S, G & A increased $4.2 million, or 2.5%, to $172.5 million for the year ended May 31, 2014 from$168.3 million for the year ended May 25, 2013. In addition, S, G & A increased as a percentage of revenue from 30.3% in fiscal 2013 to 30.4% in fiscal 2014.Management and administrative head count was 712 at the end of fiscal 2014 and 707 at the end of fiscal 2013. S, G & A increased in fiscal 2014 as compared tofiscal 2013 primarily because of an increase in management compensation, related benefits, business expenses and stock compensation expense because of the 53weeks of activity in fiscal 2014 as compared to fiscal 2013’s 52 weeks; absent the extra week, S, G & A would have increased about 1.2%, attributable to no singlesignificant category.Sequential Operations. On a sequential quarter basis, fiscal 2014 fourth quarter revenue increased 18.2% to $156.8 million from $132.7 million, hoursworked improved 18.4% and bill rates were flat. The improvement in hours worked is partially attributable to the 14 th week of activity in the fourth quarter ascompared to the 13 week quarter in the third quarter; revenue during the extra week was approximately $9.8 million, including the Memorial Day holiday. Inaddition, while the fourth quarter contained the Memorial Day holiday, the third quarter included the Thanksgiving, Christmas and New Year’s holidays. The directcost of services percentage decreased from 64.0% in the third quarter to 61.1% in the fourth quarter. This decrease is primarily attributable to the absence of paidholidays in the United States during the fourth quarter, the declining impact of payroll taxes as the calendar year progresses and improvement in the bill rate/payrate ratio. The direct cost of services percentage was also negatively impacted by approximately $331,000 related to the European headcount reduction that affectedconsultants in the fourth quarter. 41Table of ContentsS, G & A expenses increased $4.6 million from the quarter ended February 22, 2014 to the quarter ended May 31, 2014, primarily as a result of $1.7 millionfor severance and related expenses for headcount reductions in certain European offices; in addition, salary and related benefits and bonuses increased due to theadditional 14 th week in the fourth quarter of fiscal 2014, offset by reduced spending for marketing during the quarter. The leverage of S, G & A expenses wasimproved to 29.5% in the fourth quarter of fiscal 2014 compared to 31.3% in the third quarter. This was attributable to the improved revenue in the fourth quarter,as well as leverage on certain fixed expenses, such as rent, in the fourth quarter.Amortization and Depreciation Expense. Amortization of intangible assets was flat at $1.7 million in both fiscal 2014 and fiscal 2013. No intangibles werefully amortized during fiscal 2014.Depreciation expense decreased from $4.6 million for the year ended May 25, 2013 to $3.6 million for the year ended May 31, 2014. Depreciation decreasedas a number of assets were fully depreciated during fiscal 2013 and fiscal 2014.Interest Income. Interest income declined to $168,000 in fiscal 2014 compared to $175,000 in fiscal 2013. The decrease in interest income is the result oflower cash balances available for investment in fiscal 2014. The Company has invested available cash in certificates of deposit, money market investments andcommercial paper that have been classified as cash equivalents due to the short maturities of these investments. As of May 31, 2014, the Company had$34.0 million of investments in commercial paper and certificates of deposit with remaining maturity dates between three months and one year from the balancesheet date classified as short-term investments and considered “held-to-maturity” securities.Income Taxes. The provision for income taxes decreased from $19.4 million (effective rate of 48.6%) for the year ended May 25, 2013 to $18.3 million(effective rate of 47.9%) for the year ended May 31, 2014. The effective tax rate decreased primarily as a result of expiring statutes of limitations in the Company’sFIN 48 reserves. In addition, the provision for taxes in each of fiscal 2014 and fiscal 2013 resulted from taxes on income from operations in the United States andcertain other foreign jurisdictions, a lower benefit for losses in certain foreign jurisdictions with tax rates lower than the United States statutory rates, and no benefitfor losses in jurisdictions in which a valuation allowance on operating loss carryforwards had previously been established. The effective tax rate in both fiscal yearsdisproportionally magnifies the effect of the components of the tax rate that differ from the standard federal rate, including non-deductible permanent differencesand incentive stock options (“ISOs”). Based upon current economic circumstances, management will continue to monitor the need to record additional valuationallowances in the future, primarily related to certain foreign jurisdictions. Realization of the currently reserved foreign deferred tax assets is dependent upongenerating sufficient future taxable income in those foreign territories.The Company cannot recognize a tax benefit for certain ISO grants unless and until the holder exercises his or her option and then sells the shares within acertain period of time. In addition, the Company can only recognize a potential tax benefit for employees’ acquisition and subsequent sale of shares purchasedthrough the ESPP if the sale occurs within a certain defined period. As a result, the Company’s provision for income taxes is likely to fluctuate from these factorsfor the foreseeable future. Further, those tax benefits associated with ISO grants fully vested at the date of adoption of the current accounting rules governing stockawards will be recognized as additions to paid-in capital when and if those options are exercised and not as a reduction to the Company’s tax provision. TheCompany recognized a benefit of approximately $2.1 million and $2.3 million related to stock-based compensation for nonqualified stock options expensed and foreligible disqualifying ISO exercises during fiscal 2014 and 2013, respectively. The proportion of expense related to non-qualified stock option grants (for which theCompany may recognize a tax benefit in the same quarter as the related compensation expense in most instances) is significant as compared to expense related toISOs (including ESPPs). However, the timing and amount of eligible disqualifying ISO exercises cannot be predicted. The Company predominantly grantsnonqualified stock options to employees in the United States.The Company has maintained a position of being indefinitely reinvested in its foreign subsidiaries’ earnings by not expecting to remit foreign earnings in theforeseeable future. Being indefinitely reinvested does not require a deferred tax liability to be recognized on the foreign earnings. Management’s indefinitereinvestment position is supported by: 1)RGP in the United States has generated more than enough cash to fund operations and expansion, including acquisitions. RGP uses its excess cash to,at its discretion, return cash to shareholders through dividend payments and stock repurchases. 42Table of Contents 2)RGP in the United States has no debt or any other current or known obligations that require cash to be remitted from foreign subsidiaries. 3)Management’s growth objectives include allowing cash to accumulate in RGP’s profitable foreign subsidiaries with the expectation of findingstrategic expansion plans to further penetrate RGP’s most successful locations. 4)The consequences of distributing foreign earnings have historically been deemed to be tax inefficient for RGP or not materially beneficial.Management determined during the fiscal year ended May 25, 2013 that it was a prudent time to make an exception to the indefinite reinvestment positionand approved the payment of a one-time dividend from RGP Japan of $9.7 million and RGP Hong Kong of $3.9 million. The one-time exception is based uponopportunistic timing for a dividend distribution because of the favorable exchange rates between the United States and Japan for a tax beneficial result from bothRGP Japan and RGP Hong Kong. After the one-time dividend, management’s intent and ability for indefinite reinvestment has continued for all entities, includingRGP Japan and RGP Hong Kong.Quarterly ResultsThe following table sets forth our unaudited quarterly Consolidated Statements of Operations data for each of the eight quarters in the two-year period endedMay 30, 2015. In the opinion of management, this data has been prepared on a basis substantially consistent with our audited Consolidated Financial Statementsappearing elsewhere in this document, and includes all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the data. Thequarterly data should be read together with our Consolidated Financial Statements and related notes appearing elsewhere in this document. The operating results arenot necessarily indicative of the results to be expected in any future period. Quarters Ended May 30, 2015 Feb. 28, 2015 Nov. 29, 2014 Aug. 30, 2014 May 31, 2014 (1) Feb. 22, 2014 Nov. 23, 2013 Aug. 24, 2013 (In thousands, except net income per common share) Revenue $148,814 $146,832 $151,496 $143,447 $156,783 $132,725 $145,969 $131,704 Direct cost of services, primarily payroll and related taxes forprofessional services employees 90,953 91,991 92,061 87,222 95,841 84,960 88,564 81,994 Gross margin 57,861 54,841 59,435 56,225 60,942 47,765 57,405 49,710 Selling, general and administrative expenses 42,464 43,478 43,576 44,279 46,194 41,604 43,121 41,612 Amortization of intangible assets 30 62 402 424 426 424 421 417 Depreciation expense 847 839 849 854 881 877 909 961 Income from operations 14,520 10,462 14,608 10,668 13,441 4,860 12,954 6,720 Interest income (34) (37) (39) (38) (45) (41) (43) (39) Income before provision for income taxes 14,554 10,499 14,647 10,706 13,486 4,901 12,997 6,759 Provision for income taxes 6,446 4,510 6,631 5,311 6,627 2,622 5,902 3,106 Net income $8,108 $5,989 $8,016 $5,395 $6,859 $2,279 $7,095 $3,653 Net income per common share (2): Basic $0.22 $0.16 $0.21 $0.14 $0.18 $0.06 $0.18 $0.09 Diluted $0.21 $0.16 $0.21 $0.14 $0.18 $0.06 $0.18 $0.09 (1)The quarter ended May 31, 2014 consists of fourteen weeks. All other quarters presented consist of thirteen weeks.(2)Net income per common share calculations for each of the quarters were based upon the weighted average number of shares outstanding for each period, andthe sum of the quarters may not necessarily be equal to the full year net income per common share amount.Our quarterly results have fluctuated in the past and we believe they will continue to do so in the future. Certain factors that could affect our quarterlyoperating results are described in Part I Item 1A. “Risk Factors.” Due to these and other factors, we believe that quarter-to-quarter comparisons of our results ofoperations are not meaningful indicators of future performance. 43Table of ContentsLiquidity and Capital ResourcesOur primary source of liquidity is cash provided by our operations and, historically, to a lesser extent, stock option exercises. We have generated positivecash flows annually from operations since inception, and we continued to do so during the year ended May 30, 2015. Our ability to continue to increase positivecash flow from operations in the future will be, at least in part, dependent on improvement in global economic conditions.At May 30, 2015, the Company had operating leases, primarily for office premises, and purchase obligations, primarily for property and equipment, expiringat various dates through September 2025. At May 30, 2015, the Company had no capital leases. The following table summarizes our future minimum rentalcommitments under operating leases and our other known contractual obligations as of May 30, 2015: Payments Due by Period Total Fiscal 2016 Fiscal 2017-2018 Fiscal 2019-2020 Therafter (Amounts in thousands) Operating lease obligations $40,047 $10,549 $14,431 $7,405 $7,662 Purchase obligations $1,147 $492 $555 $100 $— The Company has a $3.0 million unsecured revolving credit facility with Bank of America (the “Credit Agreement”). The Credit Agreement allows theCompany to choose the interest rate applicable to advances. The interest rate options are Bank of America’s prime rate and a London Inter-Bank Offered Rate plus2.25%. Interest, if any, is payable monthly. The Credit Agreement expires November 30, 2015, unless extended by the parties. As of May 30, 2015, the Companyhad approximately $1.9 million available under the terms of the Credit Agreement, as Bank of America has issued approximately $1.1 million of outstanding lettersof credit in favor of third parties related to operating leases. As of May 30, 2015, the Company was in compliance with all covenants included in the CreditAgreement.Operating activities provided $31.8 million and $32.0 million in cash in fiscal 2015 and fiscal 2014, respectively. Cash provided by operations in fiscal 2015resulted from net income of $27.5 million and net favorable non-cash reconciling adjustments of $11.1 million (principally depreciation and amortization andstock-based compensation expense). Other balance sheet account changes between the two periods, including working capital balances, were a net use of cash of$6.9 million; the primary driver of the use was the increase in the Company’s accounts receivable as of the end of the fiscal year because of higher weekly revenuesas compared to the same period of the prior fiscal year. In fiscal 2014, cash provided by operations resulted from net income of $19.9 million and net favorablenon-cash reconciling adjustments of $14.0 million (principally depreciation and amortization and stock-based compensation expense). Other balance sheet accountchanges between the two periods, including working capital balances, were a net use of cash of $1.9 million. Stock-based compensation expense does not reflect anactual cash outflow from the Company but is an estimate of the fair value of the services provided by employees and directors in exchange for stock option grantsand purchase of stock through the Company’s ESPP and was relatively the same between fiscal 2015 and fiscal 2014. In addition, non-cash depreciation andamortization fell in fiscal 2015 as certain assets were fully amortized in fiscal 2014.Net cash provided by investing activities was $6.6 million for fiscal 2015 compared to net cash used of $12.7 million for fiscal 2014. Cash received from theredemption of short-term investments (primarily commercial paper), net of cash used to purchase short-term investments, resulted in cash provided of $9.0 millionin fiscal 2015 compared to a use of cash in fiscal 2014 of $9.0 million. The Company spent approximately $1.4 million less on property and equipment in fiscal2015 compared to fiscal 2014.Net cash used in financing activities totaled $28.9 million for the year ended May 30, 2015, compared to $32.9 million for the year ended May 31, 2014. TheCompany received approximately $9.1 million in fiscal 2015 from the exercise of employee stock options and issuance of shares via the Company’s ESPPcompared to $7.3 million in the prior fiscal year. However, the Company used less cash in fiscal 2015 ($26.3 million) to purchase approximately 1.7 million sharesof our common stock as compared to $29.6 million to purchase 2.2 million shares of common stock in fiscal 2014. Payments for the Company’s dividend programincreased from $10.6 million in fiscal 2014 to $11.7 million in fiscal 2015 as a result of the Company’s increase in fiscal 2015 of its quarterly dividend from $0.07to $0.08 per common share. 44Table of ContentsThe Company had $112.2 million in cash and cash equivalents and short-term investments at May 30, 2015. We anticipate that our current cash and theongoing cash flows from operations will be adequate to meet our working capital and capital expenditure needs for at least the next 12 months.Our ongoing operations and anticipated growth in the geographic markets we currently serve will require us to continue to make investments in capitalequipment, primarily technology hardware and software. In addition, we may consider making strategic acquisitions. If we require additional capital resources togrow our business, either internally or through acquisition, we may seek to sell additional equity securities or to secure debt financing. The sale of additional equitysecurities or certain forms of debt financing could result in additional dilution to our stockholders. We may not be able to obtain financing arrangements in amountsor on terms acceptable to us in the future. In the event we are unable to obtain additional financing when needed, we may be compelled to delay or curtail our plansto develop our business or to pay dividends on our capital stock, which could have a material adverse effect on our operations, market position andcompetitiveness.Operating activities provided $32.0 million in cash in fiscal 2014 compared to $35.0 million in fiscal 2013. Cash provided by operations in fiscal 2014resulted from net income of $19.9 million and net favorable non-cash reconciling adjustments of $14.0 million (principally depreciation and amortization andstock-based compensation expense). Other balance sheet account changes between the two periods, including working capital balances, were a net use of cash of$1.9 million; the primary driver of the use was the increase in the Company’s accounts receivable as of the end of the fiscal year because of higher weekly revenuesas compared to the same period of the prior fiscal year. In fiscal 2013, cash provided by operations resulted from net income of $20.5 million and net favorablenon-cash reconciling adjustments of $14.5 million (principally depreciation and amortization and stock-based compensation expense). Other balance sheet accountchanges between the two periods, including working capital balances, were negligible. Stock-based compensation expense does not reflect an actual cash outflowfrom the Company but is an estimate of the fair value of the services provided by employees and directors in exchange for stock option grants and purchase ofstock through the Company’s ESPP and was relatively the same between fiscal 2014 and fiscal 2013. In addition, non-cash depreciation and amortization fell infiscal 2014 as certain assets were fully amortized in fiscal 2013.Net cash used in investing activities was $12.7 million for fiscal 2014 compared to $5.2 million for fiscal 2013. Cash received from the redemption of short-term investments (primarily commercial paper), net of cash used to purchase short-term investments, resulted in a use of cash of $9.0 million in fiscal 2014compared to $2.0 million in fiscal 2013; although interest rates remained relatively low in fiscal 2014, the Company invested in more short-term investments to tryto secure a better return. The Company spent approximately $600,000 more on property and equipment in fiscal 2014 compared to fiscal 2013.Net cash used in financing activities totaled $32.9 million for the year ended May 31, 2014, compared to $38.1 million for the year ended May 25, 2013. TheCompany received approximately $7.3 million in fiscal 2014 from the exercise of employee stock options and issuance of shares via the Company’s ESPPcompared to $5.6 million in the prior fiscal year. However, the Company used less cash in fiscal 2014 ($29.6 million) to purchase approximately 2.2 million sharesof our common stock as compared to $34.2 million to purchase 2.9 million shares of common stock in fiscal 2013. Payments for the Company’s dividend programincreased from $9.5 million in fiscal 2013 to $10.6 million in fiscal 2014 as a result of the Company’s increase in fiscal 2014 of its quarterly dividend from $0.06 to$0.07 per common share.Off-Balance Sheet ArrangementsThe Company has no off-balance sheet arrangements.Recent Accounting PronouncementsInformation regarding recent accounting pronouncements is contained in Note 2 — Summary of Significant Accounting Policies — to the ConsolidatedFinancial Statements for the year ended May 30, 2015.InflationInflation was not a material factor in either revenue or operating expenses during the fiscal years ended May 30, 2015, May 31, 2014 or May 25, 2013. 45Table of ContentsIT EM 7A .QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Interest Rate Risk. At the end of fiscal 2015, we had approximately $112.2 million of cash and cash equivalents and short-term investments. Securities thatthe Company has the ability and positive intent to hold to maturity are carried at amortized cost. These securities consist of commercial paper. Cost approximatesmarket for these securities. The earnings on these investments are subject to changes in interest rates; however, assuming a constant balance available forinvestment, a 10% decline in interest rates would reduce our interest income but would not have a material impact on our consolidated financial position or resultsof operations.Foreign Currency Exchange Rate Risk. For the year ended May 30, 2015, approximately 18.7% of the Company’s revenues were generated outside of theUnited States. As a result, our operating results are subject to fluctuations in the exchange rates of foreign currencies in relation to the United States dollar.Revenues and expenses denominated in foreign currencies are translated into United States dollars at the monthly average exchange rates prevailing during theperiod. Thus, as the value of the United States dollar fluctuates relative to the currencies in our non-United States based operations, our reported results may vary.Assets and liabilities of our non-United States based operations are translated into United States dollars at the exchange rate effective at the end of eachmonthly reporting period. Approximately 83% of our fiscal year-end balances of cash, cash equivalents and short-term investments were denominated in UnitedStates dollars. The remaining amount of approximately 17% was comprised primarily of cash balances translated from Canadian Dollars, Japanese Yen, Euros, andHong Kong Dollars. The difference resulting from the translation each period of assets and liabilities of our non-United States based operations is recorded instockholders’ equity as a component of accumulated other comprehensive loss.Although we intend to monitor our exposure to foreign currency fluctuations, we do not currently use financial hedging techniques to mitigate risksassociated with foreign currency fluctuations including in a limited number of circumstances when we may be asked to transact with our client in one currency butare obligated to pay our consultant in another currency. We cannot provide assurance that exchange rate fluctuations will not adversely affect our financial resultsin the future. 46Table of ContentsITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.RESOURCES CONNECTION, INC.CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm 48 Consolidated Balance Sheets as of May 30, 2015 and May 31, 2014 49 Consolidated Statements of Operations for each of the three years in the period ended May 30, 2015 50 Consolidated Statements of Comprehensive Income for each of the three years in the period ended May 30, 2015 51 Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended May 30, 2015 52 Consolidated Statements of Cash Flows for each of the three years in the period ended May 30, 2015 53 Notes to Consolidated Financial Statements 54 47Table of ContentsReport of Independent Registered Public Accounting FirmTo the Board of Directors and Stockholders ofResources Connection, Inc.We have audited the accompanying consolidated balance sheets of Resources Connection, Inc. and subsidiaries as of May 30, 2015 and May 31, 2014, and therelated consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended May 30,2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statementsbased on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, ona test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basisfor our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Resources Connection, Inc.and subsidiaries as of May 30, 2015 and May 31, 2014, and the results of their operations and their cash flows for each of the three years in the period endedMay 30, 2015, in conformity with U.S. generally accepted accounting principles.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Resources Connection, Inc.’s andsubsidiaries’ internal control over financial reporting as of May 30, 2015, based on criteria established in Internal Control — Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated July 27, 2015 expressed an unqualified opinion on theeffectiveness of Resources Connection, Inc.’s and subsidiaries’ internal control over financial reporting./s/ McGladrey LLPIrvine, CaliforniaJuly 27, 2015 48Table of ContentsRESOURCES CONNECTION, INC.CONSOLIDATED BALANCE SHEETS May 30, 2015 May 31, 2014 (Amounts in thousands, except par value per share) ASSETS Current assets: Cash and cash equivalents $87,250 $80,291 Short-term investments 24,988 33,986 Trade accounts receivable, net of allowance for doubtful accounts of $3,291 and $3,139 as of May 30, 2015 andMay 31, 2014, respectively 96,574 90,334 Prepaid expenses and other current assets 4,066 4,876 Income taxes receivable 257 — Deferred income taxes 8,571 7,975 Total current assets 221,706 217,462 Goodwill 170,878 175,427 Intangible assets, net 90 1,031 Property and equipment, net 22,001 23,158 Deferred income taxes 335 672 Other assets 1,971 2,328 Total assets $416,981 $420,078 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $13,310 $14,031 Accrued salaries and related obligations 48,637 45,567 Other liabilities 6,999 7,577 Total current liabilities 68,946 67,175 Other long-term liabilities 7,583 7,142 Total liabilities 76,529 74,317 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.01 par value, 5,000 shares authorized; zero shares issued and outstanding — — Common stock, $0.01 par value, 70,000 shares authorized; 57,488 and 56,738 shares issued, and 37,273 and38,158 shares outstanding as of May 30, 2015 and May 31, 2014, respectively 575 567 Additional paid-in capital 374,285 360,445 Accumulated other comprehensive loss (10,917) (2,573) Retained earnings 313,268 298,830 Treasury stock at cost, 20,215 and 18,580 shares at May 30, 2015 and May 31, 2014, respectively (336,759) (311,508) Total stockholders’ equity 340,452 345,761 Total liabilities and stockholders’ equity $416,981 $420,078 The accompanying notes are an integral part of these consolidated financial statements. 49Table of ContentsRESOURCES CONNECTION, INC.CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended May 30, 2015 May 31, 2014 May 25, 2013 (Amounts in thousands, except per share amounts) Revenue $590,589 $567,181 $556,334 Direct cost of services, primarily payroll and related taxes for professional services employees 362,227 351,359 342,040 Gross margin 228,362 215,822 214,294 Selling, general and administrative expenses 173,797 172,531 168,318 Amortization of intangible assets 918 1,688 1,694 Depreciation expense 3,389 3,628 4,580 Income from operations 50,258 37,975 39,702 Interest income (148) (168) (175) Income before provision for income taxes 50,406 38,143 39,877 Provision for income taxes 22,898 18,257 19,373 Net income $27,508 $19,886 $20,504 Net income per common share: Basic $0.73 $0.51 $0.50 Diluted $0.72 $0.51 $0.50 Weighted average common shares outstanding: Basic 37,825 39,216 41,108 Diluted 38,248 39,307 41,151 Cash dividends declared per common share $0.32 $0.28 $0.24 The accompanying notes are an integral part of these consolidated financial statements. 50Table of ContentsRESOURCES CONNECTION, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Years Ended May 30, 2015 May 31, 2014 May 25, 2013 (Amounts in thousands) COMPREHENSIVE INCOME: Net income $27,508 $19,886 $20,504 Foreign currency translation adjustment, net of tax (8,344) 1,385 (2,068) Total comprehensive income $19,164 $21,271 $18,436 The accompanying notes are an integral part of these consolidated financial statements. 51Table of ContentsRESOURCES CONNECTION, INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY For the Years Ended May 30, 2015 May 31, 2014 May 25, 2013 (Amounts in thousands) COMMON STOCK-SHARES: Balance at beginning of period 56,738 56,082 55,476 Exercise of stock options 408 313 195 Issuance of restricted stock 6 5 — Cancellation of shares (1) (10) — Issuance of common stock under Employee Stock Purchase Plan 337 348 411 Balance at end of period 57,488 56,738 56,082 COMMON STOCK-PAR VALUE: Balance at beginning of period $567 $561 $555 Exercise of stock options 4 3 2 Issuance of common stock under Employee Stock Purchase Plan 4 3 4 Balance at end of period $575 $567 $561 ADDITIONAL PAID-IN CAPITAL: Balance at beginning of period $360,445 $347,790 $335,791 Exercise of stock options 5,299 3,813 1,665 Stock-based compensation expense related to share-based awards and employee stock purchases 5,989 6,519 7,188 Tax shortfall from employee stock option plans (1,216) (1,125) (762) Issuance of common stock under Employee Stock Purchase Plan 3,768 3,448 3,908 Balance at end of period $374,285 $360,445 $347,790 ACCUMULATED OTHER COMPREHENSIVE LOSS: Balance at beginning of period $(2,573) $(3,958) $(1,890) Foreign currency translation adjustment, net of tax (8,344) 1,385 (2,068) Balance at end of period $(10,917) $(2,573) $(3,958) RETAINED EARNINGS: Balance at beginning of period $298,830 $290,549 $280,650 Cash dividends declared (12,044) (10,911) (9,790) Issuance of restricted stock (1,026) (694) (815) Net income 27,508 19,886 20,504 Balance at end of period $313,268 $298,830 $290,549 TREASURY STOCK-SHARES: Balance at beginning of period 18,580 16,377 13,503 Issuance of restricted stock (44) (29) (35) Cancellation of shares — (10) — Purchase of shares 1,679 2,242 2,909 Balance at end of period 20,215 18,580 16,377 TREASURY STOCK-COST: Balance at beginning of period $(311,508) $(282,615) $(249,238) Issuance of restricted stock 1,026 694 815 Purchase of shares (26,277) (29,587) (34,192) Balance at end of period $(336,759) $(311,508) $(282,615) The accompanying notes are an integral part of these consolidated financial statements. 52Table of ContentsRESOURCES CONNECTION, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended May 30, 2015 May 31, 2014 May 25, 2013 (Amounts in thousands) Cash flows from operating activities: Net income $27,508 $19,886 $20,504 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,307 5,316 6,274 Stock-based compensation expense 5,989 6,519 7,188 Excess tax benefits from stock-based compensation (86) (35) (18) Loss on disposal of assets 15 65 116 Bad debt expense 212 300 — Deferred income taxes 692 1,828 982 Changes in operating assets and liabilities: Trade accounts receivable (10,052) (5,747) 37 Prepaid expenses and other current assets 547 (225) 548 Income taxes (2,187) 845 (600) Other assets 254 110 (64) Accounts payable and accrued expenses 304 (1,496) (973) Accrued salaries and related obligations 4,090 6,097 429 Other liabilities 158 (1,445) 536 Net cash provided by operating activities 31,751 32,018 34,959 Cash flows from investing activities: Redemption of short-term investments 49,000 73,000 61,000 Purchase of short-term investments (40,002) (81,990) (63,005) Purchase of property and equipment (2,364) (3,725) (3,147) Net cash provided by (used in) investing activities 6,634 (12,715) (5,152) Cash flows from financing activities: Proceeds from exercise of stock options 5,303 3,816 1,667 Proceeds from issuance of common stock under Employee Stock Purchase Plan 3,772 3,451 3,912 Purchase of common stock (26,277) (29,587) (34,192) Cash dividends paid (11,748) (10,625) (9,497) Excess tax benefits from stock-based compensation 86 35 18 Net cash used in financing activities (28,864) (32,910) (38,092) Effect of exchange rate changes on cash (2,562) (118) (2,823) Net increase (decrease) in cash 6,959 (13,725) (11,108) Cash and cash equivalents at beginning of period 80,291 94,016 105,124 Cash and cash equivalents at end of period $87,250 $80,291 $94,016 The accompanying notes are an integral part of these consolidated financial statements. 53Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS1. Description of the Company and its BusinessResources Connection, Inc. (“Resources Connection”), a Delaware corporation, was incorporated on November 16, 1998. Resources Connection is amultinational professional services firm; its operating entities primarily provide services under the name Resources Global Professionals (“RGP” or the“Company”). The Company is organized around client service teams utilizing experienced professionals and provides consulting and business support services inthe areas of accounting; finance; governance, risk and compliance; corporate advisory, strategic communications and restructuring; information management;human capital; supply chain management; healthcare solutions; and legal and regulatory. The Company has offices in the United States (“U.S.”), Asia, Australia,Canada, Europe and Mexico.The Company’s fiscal year consists of 52 or 53 weeks, ending on the Saturday in May closest to May 31. Fiscal years 2015 and 2013 consisted of four 13week quarters and a total of 52 weeks of activity for the fiscal year. For fiscal years of 53 weeks, such as fiscal 2014, the first three quarters consisted of 13 weekseach and the fourth quarter consisted of 14 weeks.2. Summary of Significant Accounting PoliciesBasis of Presentation and Principles of ConsolidationThe Consolidated Financial Statements of the Company (“financial statements”) have been prepared in conformity with accounting principles generallyaccepted in the U.S. (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”). The financial statements include the accounts of the Companyand its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.Revenue RecognitionRevenues are recognized and billed when the Company’s professionals deliver services. Conversion fees are recognized when one of the Company’sprofessionals accepts an offer of permanent employment from a client. Conversion fees were 0.5% of revenue for each of the years ended May 30, 2015, May 31,2014 and May 25, 2013. All costs of compensating the Company’s professionals are the responsibility of the Company and are included in direct cost of services.Client Reimbursements of “Out-of-Pocket” ExpensesThe Company recognizes all reimbursements received from clients for “out-of-pocket” expenses as revenue and all such expenses as direct cost of services.Reimbursements received from clients were $10.6 million, $8.9 million and $10.1 million for the years ended May 30, 2015, May 31, 2014 and May 25, 2013,respectively.Foreign Currency TranslationThe financial statements of subsidiaries outside the U.S. are measured using the local currency as the functional currency. Assets and liabilities of thesesubsidiaries are translated at current exchange rates, income and expense items are translated at average exchange rates prevailing during the period and the relatedtranslation adjustments are recorded as a component of comprehensive income or loss within stockholders’ equity. Gains and losses from foreign currencytransactions are included in selling, general and administrative expenses in the Consolidated Statements of Operations.Per Share InformationThe Company presents both basic and diluted earnings per share (“EPS”). Basic EPS is calculated by dividing net income by the weighted average numberof common shares outstanding during the period. Diluted EPS is based upon the weighted average number of common and common equivalent shares outstandingduring the period, calculated using the treasury stock method for stock options. Under the treasury stock method, exercise proceeds include the amount theemployee must pay for exercising stock options, the amount of compensation cost for future services that the Company has not yet recognized and the amount oftax 54Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) benefits that would be recorded in additional paid-in capital when the award becomes deductible. Common equivalent shares are excluded from the computation inperiods in which they have an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price over the period are anti-dilutive andare excluded from the calculation.The following table summarizes the calculation of net income per share for the years ended May 30, 2015, May 31, 2014 and May 25, 2013 (in thousands,except per share amounts): 2015 2014 2013 Net income $27,508 $19,886 $20,504 Basic: Weighted average shares 37,825 39,216 41,108 Diluted: Weighted average shares 37,825 39,216 41,108 Potentially dilutive shares 423 91 43 Total dilutive shares 38,248 39,307 41,151 Net income per common share: Basic $0.73 $0.51 $0.50 Dilutive $0.72 $0.51 $0.50 Anti-dilutive shares not included above 5,746 7,828 8,084 Cash and Cash EquivalentsThe Company considers cash on hand, deposits in banks, and short-term investments purchased with an original maturity date of three months or less to becash and cash equivalents. The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents approximate the fair values due to theshort maturities of these instruments.Short-Term InvestmentsAs of May 30, 2015 and May 31, 2014, $25.0 million and $34.0 million, respectively, of the Company’s investments in debt securities had originalcontractual maturities of between three months and one year. The Company had no investments with a maturity in excess of one year as of the end of either fiscalyear 2015 or 2014. The Company carries debt securities that it has the ability and positive intent to hold to maturity at amortized cost.The fair value of the Company’s financial instruments reflects the amounts that the Company estimates it will receive in connection with the sale of an assetin an orderly transaction between market participants at the measurement date (exit price). The fair value hierarchy prioritizes the use of inputs used in valuationtechniques into the following three levels:Level 1 — Quoted prices in active markets for identical assets and liabilities.Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are not active; orother inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets.Level 3 — Unobservable inputs. 55Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The Company’s investments in commercial paper and U.S. Government Agency securities are measured using quoted prices in markets that are not active(Level 2). There were no unrealized holding gains or losses as of May 30, 2015 and May 31, 2014. Short-term investments consist of the following (in thousands): As of May 30, 2015 As of May 31, 2014 Cost Fair Value Cost Fair Value Commercial paper $14,986 $14,986 $33,986 $33,986 U.S. Government Agency securities 10,002 10,002 — — $24,988 $24,988 $33,986 $33,986 Allowance for Doubtful AccountsThe Company maintains an allowance for doubtful accounts for estimated losses resulting from its clients’ failure to make required payments for servicesrendered. Management estimates this allowance based upon knowledge of the financial condition of the Company’s clients (which may not include knowledge ofall significant events), review of historical receivable and reserve trends and other pertinent information. If the financial condition of the Company’s clientsdeteriorates or there is an unfavorable trend in aggregate receivable collections, additional allowances may be required.The following table summarizes the activity in our allowance for doubtful accounts (in thousands): BeginningBalance Charged toOperations CurrencyRate Changes (Write-offs)/ Recoveries Ending Balance Years Ended: May 25, 2013 $3,992 $— $(7) $(557) $3,428 May 31, 2014 $3,428 $300 $20 $(609) $3,139 May 30, 2015 $3,139 $212 $(78) $18 $3,291 Property and EquipmentProperty and equipment is stated at cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over thefollowing estimated useful lives: Building 30 yearsFurniture 5 to 10 yearsLeasehold improvements Lesser of useful life of asset or term of leaseComputer, equipment and software 3 to 5 yearsCosts for normal repairs and maintenance are expensed to operations as incurred, while renewals and major refurbishments are capitalized.Assessments of whether there has been a permanent impairment in the value of property and equipment are periodically performed by considering factorssuch as expected future operating income, trends and prospects, as well as the effects of demand, competition and other economic factors. Management believes nopermanent impairment has occurred.Intangible Assets and GoodwillGoodwill and other intangible assets with indefinite lives are not subject to amortization but are tested for impairment annually or whenever events orchanges in circumstances indicate that the asset might be impaired. The Company performed its annual goodwill impairment analysis as of May 30, 2015 and willcontinue to test for impairment at least annually. The Company 56Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) performs its impairment analysis by comparing its market capitalization to its book value throughout the fiscal year. For application of this methodology theCompany determined that it operates as a single reporting unit resulting from the combination of its practice offices. No impairment was indicated as of May 30,2015. Other intangible assets with finite lives are subject to amortization and impairment reviews. No impairment was indicated as of May 30, 2015.See Note 4 — Intangible Assets and Goodwill for a further description of the Company’s intangible assets.Stock-Based CompensationThe Company recognizes compensation expense for all share-based payment awards made to employees and directors, including employee stock options andemployee stock purchases made via the Company’s Employee Stock Purchase Plan (the “ESPP”), based on estimated fair value at the date of grant.The Company estimates the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of theaward that is ultimately expected to vest is recognized as an expense over the requisite service periods. Stock options vest over four years and restricted stockaward vesting is determined on an individual grant basis under the Company’s 2014 Performance Incentive Plan (“2014 Plan”). The Company determines theestimated value of stock options using the Black-Scholes valuation model. The Company recognizes stock-based compensation expense on a straight-line basisover the service period for options that are expected to vest and records adjustments to compensation expense at the end of the service period if actual forfeituresdiffer from original estimates.See Note 13 — Stock Based Compensation Plans for further information on the 2014 Plan and stock-based compensation.Income TaxesThe Company recognizes deferred income taxes for the estimated tax consequences in future years of differences between the tax basis of assets andliabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory rates applicable to the periods in which the differences areexpected to affect taxable income. Valuation allowances are established to reduce deferred tax assets to the amount expected to be realized when, in management’sopinion, it is more likely than not that some portion of the deferred tax assets will not be realized. The provision for income taxes represents current taxes payablenet of the change during the period in deferred tax assets and liabilities.Recent Accounting PronouncementsBusiness Combinations: Pushdown Accounting. In November 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance whichprovides an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirerobtains control of the acquired entity. If an acquired entity elects the option to apply pushdown accounting in its separate financial statements, it should discloseinformation that users need to evaluate the effects of pushdown accounting on its financial statements. This guidance was effective on November 18, 2014. Afterthe effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event.However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available forissuance, the application of this guidance would be a change in accounting principle. The Company will utilize this guidance for any future acquisitions.Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. In August 2014, the FASB issued new guidance regardingmanagement’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide relatedfootnote disclosures. The guidance is effective for the Company for fiscal 2017 with early adoption permitted. The Company does not believe adoption of thisguidance will have a material impact on its consolidated financial statements. 57Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite ServicePeriod. In June 2014, the FASB issued new guidance requiring that a performance target that affects vesting and could be achieved after the requisite service periodbe treated as a performance condition. The guidance is effective for the Company for fiscal 2017 with early adoption permitted. The Company does not currentlyhave performance based awards and thus does not believe adoption of this guidance will have a material impact on its consolidated financial statements.Revenue from Contracts with Customers. In May 2014, the FASB issued a comprehensive new revenue recognition standard that will supersede mostexisting revenue recognition guidance and is intended to improve and converge revenue recognition and related financial reporting requirements. The standard willrequire companies to review contract arrangements with customers and ensure all separate performance obligations are properly recognized in compliance with thenew guidance. In July 2015, the FASB delayed the required implementation date for the Company until fiscal 2019, although the Company has the option to adoptbeginning in fiscal 2018. The standard allows for either “full retrospective” adoption, meaning the standard is applied to all periods presented, or “cumulativeeffect” adoption, meaning the standard is applied only to the most current period presented in the financial statements. The Company is currently assessing whetherthe adoption of the guidance will have a material impact on its consolidated financial statements.Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. In April 2014, the FASB issued new guidance regarding thecriteria for reporting discontinued operations and enhancing disclosures in this area. Under the guidance, only disposals representing a strategic shift in operationsshould be presented as discontinued operations. In addition, the guidance requires expanded disclosures about discontinued operations that will provide financialstatement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The amendments in the guidance are effectivefor the Company for fiscal 2015. The adoption of this guidance did not impact the Company’s consolidated financial statements.Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. InJuly 2013, the FASB issued new guidance which requires an unrecognized tax benefit to be presented in the financial statements as a reduction to a deferred taxasset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward. To the extent the tax benefit is not available at the reporting date under thegoverning tax law or if the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented as a liability andnot combined with deferred tax assets. The guidance is effective for annual periods, and interim periods within those years, beginning after December 15, 2013.The amendments are to be applied to all unrecognized tax benefits that exist as of the effective date and may be applied retrospectively to each prior reportingperiod presented. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries. In March 2013, the FASB issued new guidance on a parent’s accounting forthe cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. This guidance requires that the parent releaseany related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreignentity in which the subsidiary or group of assets had resided. The guidance is effective for fiscal years, and interim periods within those years, beginning afterDecember 15, 2013. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified PublicAccountants and the SEC did not, or are not expected to, have a material effect on the Company’s results of operations or financial position.Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amountsof assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting period. Although management believes these estimates and assumptions are adequate, actual results could differ from the estimates andassumptions used. 58Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 3. Property and EquipmentProperty and equipment consist of the following (in thousands): As of May 30, 2015 As of May 31, 2014 Building and land $14,100 $14,050 Computers, equipment and software 16,612 17,474 Leasehold improvements 20,037 20,768 Furniture 10,090 10,591 60,839 62,883 Less accumulated depreciation and amortization (38,838) (39,725) $22,001 $23,158 4. Intangible Assets and GoodwillThe following table presents details of our intangible assets, estimated lives and related accumulated amortization (in thousands): As of May 30, 2015 As of May 31, 2014 Gross AccumulatedAmortization Net Gross AccumulatedAmortization Net Customer relationships (2-7 years) $17,052 $(17,052) $— $18,286 $(17,794) $492 Non-compete agreements (1-5 years) 3,188 (3,188) — 3,232 (2,937) 295 Trade name and trademark (5 years) 1,341 (1,251) 90 1,341 (1,097) 244 Total $21,581 $(21,491) $90 $22,859 $(21,828) $1,031 The following table summarizes amortization expense for the years ended May 30, 2015, May 31, 2014 and May 25, 2013 (in thousands): For the Years Ended 2015 2014 2013 Amortization expense $918 $1,688 $1,694 The Company expects $90,000 of intangible asset amortization expense (based on existing intangible assets) for the year ending May 28, 2016. After fiscal2016, absent an acquisition, there will be no remaining unamortized balance of intangible assets.These estimates do not incorporate the impact that currency fluctuations may cause when translating the financial results of the Company’s internationaloperations that have amortizable intangible assets into U.S. dollars. The fluctuation in the gross balance of intangible assets primarily reflects the impact ofcurrency fluctuations between fiscal 2015 and 2014 in translating the intangible balances recorded on the Company’s international operations financial statements.The following table summarizes the activity in the Company’s goodwill balance (in thousands): For the Years Ended May 30, 2015 May 31, 2014 Goodwill, beginning of year $175,427 $174,275 Impact of foreign currency exchange rate changes (4,549) 1,152 Goodwill, end of period $170,878 $175,427 59Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 5. Income TaxesThe following table represents the current and deferred income tax provision for federal and state income taxes attributable to operations (in thousands): For the Years Ended May 30, 2015 May 31, 2014 May 25, 2013 Current Federal $18,046 $13,722 $14,872 State 4,028 3,011 2,969 Foreign 1,101 740 1,484 23,175 17,473 19,325 Deferred Federal (502) 1,057 167 State (120) 166 29 Foreign 345 (439) (148) (277) 784 48 $22,898 $18,257 $19,373 Income before provision for income taxes is as follows (in thousands): For the Years Ended May 30, 2015 May 31, 2014 May 25, 2013 Domestic $51,997 $43,843 $43,828 Foreign (1,591) (5,700) (3,951) $50,406 $38,143 $39,877 The provision for income taxes differs from the amount that would result from applying the federal statutory rate as follows: For the Years Ended May 30,2015 May 31,2014 May 25,2013 Statutory tax rate 35.0% 35.0% 35.0% State taxes, net of federal benefit 5.0 5.3 4.8 Non-U.S. rate adjustments 1.1 2.5 1.6 Stock-based compensation 0.5 0.8 1.2 Valuation allowance 2.8 3.6 4.1 Repatriation of foreign earnings — — 18.8 Foreign tax credits, net of valuation allowance — — (19.4) Permanent items, primarily meals and entertainment 1.3 1.4 1.5 FIN 48 adjustments — (1.8) (0.1) Other, net (0.3) 1.1 1.1 Effective tax rate 45.4% 47.9% 48.6% The impact of state taxes, net of federal benefit, and foreign income taxed at other than U.S. rates fluctuates year over year due to the changes in the mix ofoperating income and losses amongst the various states and foreign jurisdictions in which the Company operates. 60Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The components of the net deferred tax asset consist of the following (in thousands): May 30, 2015 May 31, 2014 Deferred tax assets: Allowance for doubtful accounts $1,665 $1,654 Accrued compensation 4,075 3,567 Accrued expenses 3,561 3,858 Stock options and restricted stock 15,670 15,668 Foreign tax credit 370 354 Net operating losses 14,258 16,043 Property and equipment 1,369 1,222 State taxes 311 212 Gross deferred tax asset 41,279 42,578 Valuation allowance (15,056) (16,719) Gross deferred tax asset, net of valuation allowance 26,223 25,859 Deferred tax liabilities: Goodwill and intangibles (20,750) (19,554) Net deferred tax asset $5,473 $6,305 The Company had an income tax receivable of $257,000 and an income tax payable of $750,000 as of May 30, 2015 and May 31, 2014, respectively.The tax benefit associated with the exercise of nonqualified stock options and the disqualifying dispositions by employees of incentive stock options,restricted stock awards and shares issued under the Company’s ESPP reduced income taxes payable by $940,000 and $512,000 for the years ended May 30, 2015and May 31, 2014, respectively.The Company has foreign net operating loss carryforwards of $57.1 million and foreign tax credit carryforwards of $370,000. The foreign tax credits willexpire beginning in fiscal 2023. Fluctuations in foreign currency exchange rates had a significant impact on the translated net operating loss carryforwards fromfiscal year end May 31, 2014 to May 30, 2015. The following table summarizes the net operating loss expiration periods. Expiration Periods Amount of Net Operating Losses (in thousands) Fiscal Years Ending: 2016 $850 2017 200 2018 600 2019 650 2020 1,550 2021-2025 7,250 Unlimited 46,000 $57,100 61Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The following table summarizes the activity in our valuation allowance accounts (in thousands): BeginningBalance Charged toOperations CurrencyRate Changes Ending Balance Years Ended: May 25, 2013 $12,648 $2,036 $95 $14,779 May 31, 2014 $14,779 $1,396 $544 $16,719 May 30, 2015 $16,719 $1,189 $(2,852) $15,056 Realization of the deferred tax assets is dependent upon generating sufficient future taxable income. Management believes that it is more likely than not thatall other remaining deferred tax assets will be realized through future taxable earnings or alternative tax strategies.Deferred income taxes have not been provided on the undistributed earnings of approximately $13.0 million from the Company’s foreign subsidiaries as ofMay 30, 2015 since these amounts are intended to be indefinitely reinvested in foreign operations. If the earnings of the Company’s foreign subsidiaries were to bedistributed, management estimates that the income tax impact would be immaterial as the federal taxes would be offset with foreign tax credits.Management determined during the fiscal year ended May 25, 2013 that it was a prudent time to make an exception to the indefinite reinvestment positionand approved the payment of a one-time dividend from RGP Japan of $9.7 million and RGP Hong Kong of $3.9 million. The one-time exception is based uponopportunistic timing for a dividend distribution because of the favorable exchange rates between the U.S. and Japan for a tax beneficial result from both RGP Japanand RGP Hong Kong. After the one-time dividend, management’s intent and ability for indefinite reinvestment have and will continue for all entities, includingRGP Japan and RGP Hong Kong.The following table summarizes the activity related to the gross unrecognized tax benefits (in thousands): For the Years Ended May 30, 2015 May 31, 2014 Unrecognized tax benefits, beginning of year $32 $722 Gross increases-tax positions in prior period 42 — Gross decreases-tax positions in prior period — — Gross increases-current period tax positions — — Settlements — — Lapse of statute of limitations (32) (690) Unrecognized tax benefits, end of year $42 $32 As of May 30, 2015 and May 31, 2014, the Company’s total liability for unrecognized gross tax benefits was $42,000 and $32,000, respectively, which, ifultimately recognized would impact the effective tax rate in future periods. As of May 30, 2015 and May 31, 2014, the unrecognized tax benefit includes $42,000and $0, respectively, which are long-term liabilities and $0 and $32,000, respectively, which are short-term liabilities due to closing statute of limitations.The Company’s major income tax jurisdiction is the U.S., with federal statute of limitations remaining open for fiscal 2012 and thereafter. During the fiscalyear ended May 30, 2015, the Company completed federal examinations of fiscal years 2012 and 2013 with an insignificant beneficial change. For states within theU.S. in which the Company does significant business, the Company remains subject to examination for fiscal 2011 and thereafter. Major foreign jurisdictions inEurope remain open for fiscal years ended 2010 and thereafter. 62Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The Company continues to recognize interest expense and penalties related to income tax as a part of its provision for income taxes. While the amountaccrued during the current fiscal year is immaterial, the Company has provided $1,000 of accrued interest and penalties as a component of the liability forunrecognized tax benefits.6. Accrued Salaries and Related ObligationsAccrued salaries and related obligations consist of the following (in thousands): May 30, 2015 May 31, 2014 Accrued salaries and related obligations $17,716 $17,241 Accrued bonuses 16,611 14,196 Accrued vacation 14,310 14,130 $48,637 $45,567 7. Revolving Credit AgreementThe Company has a $3.0 million unsecured revolving credit facility with Bank of America (the “Credit Agreement”). The Credit Agreement allows theCompany to choose the interest rate applicable to advances. The interest rate options are Bank of America’s prime rate and a London Inter-Bank Offered Rate plus2.25%. Interest, if any, is payable monthly. The Credit Agreement expires November 30, 2015, unless extended by the parties. As of May 30, 2015, the Companyhad approximately $1.9 million available under the terms of the Credit Agreement, as Bank of America has issued approximately $1.1 million of outstanding lettersof credit for the benefit of third parties related to operating leases and guarantees. As of May 30, 2015, the Company was in compliance with all covenants includedin the Credit Agreement.8. Concentrations of Credit RiskThe Company maintains cash and cash equivalent balances, short-term investments in commercial paper and U.S. government agency securities with highcredit quality financial institutions. At times, such balances are in excess of federally insured limits.Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of trade receivables. However, concentrationsof credit risk are limited due to the large number of customers comprising the Company’s customer base and their dispersion across different business andgeographic areas. The Company monitors its exposure to credit losses and maintains an allowance for anticipated losses. A significant change in the liquidity orfinancial position of one or more of the Company’s customers could result in an increase in the allowance for anticipated losses. No single customer accounted formore than 10% of revenue for the years ended May 30, 2015, May 31, 2014 and May 25, 2013.9. Stockholders’ EquityThe Company’s board of directors has periodically approved a stock repurchase program authorizing the repurchase, at the discretion of the Company’ssenior executives, of the Company’s common stock for a designated aggregate dollar limit. The current program was authorized in April 2011 (the “April 2011program”) and set an aggregate dollar limit not to exceed $150 million. During the years ended May 30, 2015 and May 31, 2014, the Company purchasedapproximately 1.7 million and 2.2 million shares of its common stock, respectively, at an average price of $15.65 and $13.19 per share, respectively, on the openmarket for approximately $26.3 million and $29.6 million, respectively. As of May 30, 2015, approximately $16.7 million remains available for future repurchasesof our common stock under the April 2011 program.The Company has 70,000,000 authorized shares of common stock with a $0.01 par value. At May 30, 2015 and May 31, 2014, there were 37,273,000 and38,158,000 shares of common stock outstanding, respectively, all of which provide the holders with voting rights. 63Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The Company has authorized for issuance 5,000,000 shares of preferred stock with a $0.01 par value per share. The board of directors has the authority toissue preferred stock in one or more series and to determine the related rights and preferences. No shares of preferred stock were outstanding as of May 30, 2015and May 31, 2014.10. Benefit PlanThe Company has a defined contribution 401(k) plan (“the plan”) which covers all employees in the U.S. who have completed 90 days of service and areage 21 or older. Participants may contribute up to 50% of their annual salary up to the maximum amount allowed by statute. As defined in the plan agreement, theCompany may make matching contributions in such amount, if any, up to a maximum of 6% of individual employees’ annual compensation. The Company, at itssole discretion, determines the matching contribution made from quarter to quarter. To receive matching contributions, the employee must be employed on the lastbusiness day of the fiscal quarter. For the years ended May 30, 2015, May 31, 2014 and May 25, 2013, the Company contributed approximately $4.8 million,$4.5 million and $4.2 million, respectively, to the plan as Company matching contributions.11. Supplemental Disclosure of Cash Flow InformationAdditional information regarding cash flows is as follows (in thousands): For the Years Ended May 30, 2015 May 31, 2014 May 25, 2013 Income taxes paid $24,326 $16,187 $19,785 Non-cash investing and financing activities: Dividends declared, not paid $2,982 $2,677 $2,391 Capitalized leasehold improvements paid directly by landlord $144 $1,934 $— 12. Commitments and ContingenciesLease Commitments and Purchase ObligationsAt May 30, 2015, the Company had operating leases, expiring at various dates through September 2025, primarily for office premises, and purchaseobligations, primarily for fixed assets. At May 30, 2015, the Company had no capital leases. Future minimum rental commitments under operating leases and otherknown purchase obligations are as follows (in thousands): Years Ending: OperatingLeases Purchase Obligations May 28, 2016 $10,549 $492 May 27, 2017 8,459 342 May 26, 2018 5,972 213 May 25, 2019 4,743 85 May 30, 2020 2,662 15 Thereafter 7,662 — Total $40,047 $1,147 Rent expense for the years ended May 30, 2015, May 31, 2014 and May 25, 2013 totaled $13.1 million, $13.3 million and $14.9 million, respectively. Rentexpense is recognized on a straight-line basis over the term of the lease, including during any rent holiday periods. 64Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The Company leases approximately 18,200 square feet of the approximately 56,200 square foot Company owned building located in Irvine, California toindependent third parties and has operating lease agreements for sub-let space with independent third parties expiring through fiscal 2024. Under the terms of theseoperating lease agreements, rental income from such third party leases is expected to be $505,000, $372,000, $193,000, $187,000 and $189,000 in fiscal 2016through 2020, respectively and $840,000 thereafter.Employment AgreementsThe Company entered into an employment agreement in April 2013 with its president and chief executive officer, Anthony Cherbak. This agreement is forthree years and commenced on May 28, 2013. The agreement automatically renews for additional one-year periods commencing May 28, 2015 unless the Companyor Mr. Cherbak provides the other party written notice within 60 days of the then-current expiration date that the agreement will not be extended. The employmentagreement provides Mr. Cherbak with a specified severance amount depending on whether his separation from the Company is with or without good cause asdefined in the agreement. The Company also has employment agreements with certain key members of management, including with its current executive chairmanand former chief executive officer, Donald Murray, the respective terms of which extend through July 31, 2014 (with the exception of Chief Operating OfficerTracy Stephens’ employment agreement which extends through July 31, 2016) but automatically renew for additional one year periods unless the Company or thenamed executive provides the other party written notice no later than 60 days prior to the then-current expiration date that the agreement will not be extended.These agreements provide those employees with a specified severance amount depending on whether the employee is terminated with or without good cause asdefined in the applicable agreement.On July 16, 2015, Mr. Murray announced that he will voluntarily retire from the Company’s employ as its Executive Chairman, effective August 31, 2015.Thereafter, at the Board’s request, Mr. Murray will continue to serve the Company in his capacity as Chairman of the Board of Directors.Legal ProceedingsThe Company is involved in certain legal matters in the ordinary course of business. In the opinion of management, all such matters, if disposed ofunfavorably, would not have a material adverse effect on the Company’s financial position, cash flows or results of operations.13. Stock Based Compensation Plans2014 Performance Incentive PlanOn October 23, 2014, the Company’s stockholders approved the 2014 Plan. The 2014 Plan replaced the Resources Connection, Inc. 2004 PerformanceIncentive Plan and the 1999 Long Term Incentive Plan (the “Prior Stock Plans”). The effective date of the 2014 Plan is September 3, 2014 and, unless terminatedearlier by the Board of Directors, will terminate on September 2, 2024. Under the terms of the 2014 Plan, the Company’s board of directors or one or morecommittees appointed by the board of directors will administer the 2014 Plan. The board of directors has delegated general administrative authority for the 2014Plan to the Compensation Committee of the board of directors.The administrator of the 2014 Plan has broad authority under the 2014 Plan to, among other things, select participants and determine the type(s) of award(s)that they are to receive, and determine the number of shares that are to be subject to awards and the terms and conditions of awards, including the price (if any) tobe paid for the shares or the award. Persons eligible to receive awards under the 2014 Plan include officers or employees of the Company or any of its subsidiaries,directors of the Company, and certain consultants and advisors to the Company or any of its subsidiaries.The maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2014 Plan equals the sumof: (1) 2,400,000 shares, plus (2) the number of shares subject to stock options granted under the Prior Stock Plans and outstanding as of September 3, 2014 (thedate at which the Prior Stock Plans terminated), which expire, or 65Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) for any reason are cancelled or terminated, after that date without being exercised, plus (3) the number of shares subject to restricted stock, restricted stock unitsand other full-value awards granted under the Prior Stock Plans that were outstanding and unvested as of September 3, 2014, which are forfeited, terminated,cancelled, or otherwise reacquired after that date without having become vested. As of May 30, 2015, 3,449,000 shares were available for award grant purposesunder the 2014 Plan, subject to future increases as described in (2) and (3) above and subject to increase as then-outstanding awards expire or terminate withouthaving become vested or exercised, as applicable.The types of awards that may be granted under the 2014 Plan include stock options, restricted stock, stock bonuses, performance stock, stock units, phantomstock and other forms of awards granted or denominated in the Company’s common stock or units of the Company’s common stock, as well as certain cash bonusawards. Under the terms of the 2014 Plan, the option price for the incentive stock options (“ISOs”) and nonqualified stock options (“NQSO”) may not be less thanthe fair market value of the shares of the Company’s stock on the date of the grant. For ISOs, the exercise price per share may not be less than 110% of the fairmarket value of a share of common stock on the grant date for any individual possessing more than 10% of the total outstanding stock of the Company. Stockoptions granted under the 2014 Plan and the Prior Stock Plans generally become exercisable over periods of one to four years and expire not more than ten yearsfrom the date of grant. The Company predominantly grants NQSOs to employees in the U.S. The Company granted 49,840 and 34,632 shares of restricted stockduring the fiscal years ended May 30, 2015 and May 31, 2014, respectively.A summary of the share-based award activity under the 2014 Plan and the Prior Stock Plans follows (amounts in thousands, except weighted averageexercise price): Share-Based Awards Available forGrant Number ofShares Under Option WeightedAverage Exercise Price Weighted Average Remaining Contractual Life(in years) AggregateIntrinsic Value Options outstanding at May 31, 2014 1,530 7,696 $18.93 5.21 $1,611 Additional options available for grant 2,400 — — Granted, at fair market value (1,496) 1,496 12.50 Restricted Stock (1) (125) — — Exercised — (408) 13.00 Forfeited (2) 264 (261) 12.54 Expired 876 (876) 23.92 Options outstanding at May 30, 2015 3,449 7,647 $17.64 5.33 $12,414 Exercisable at May 30, 2015 5,428 $19.84 4.01 $4,733 Vested and expected to vest at May 30, 2015 (3) 7,413 $17.80 5.22 $11,652 (1)Amounts represent restricted shares granted. Share-based awards available for grant are reduced by 2.5 shares for each share awarded as stock grants fromthe 2014 Plan.(2)Amounts represent both stock options and restricted share awards forfeited.(3)The expected to vest options are the result of applying the pre-vesting forfeiture rate assumptions to options not yet vested.The weighted average grant date fair values of all stock options granted in the years ended May 30, 2015, May 31, 2014 and May 25, 2013 were $12.50,$11.41 and $12.53 per share, respectively.The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $15.69 as ofMay 29, 2015 (the last actual trading day of fiscal 2015), which would have been received by the option holders had all option holders exercised their options as ofthat date. 66Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The total pre-tax intrinsic value related to stock options exercised during the years ended May 30, 2015, May 31, 2014 and May 25, 2013 was $1.2 million,$347,000 and $697,000, respectively. The total estimated fair value of stock options that vested during the years ended May 30, 2015, May 31, 2014 and May 25,2013 was $3.8 million, $5.5 million and $5.8 million, respectively.Valuation and Expense Information for Stock Based Compensation PlansThe following table summarizes the impact of the Company’s stock-based compensation plans. Stock-based compensation expense is included in selling,general and administrative expenses and consists of stock-based compensation expense related to employee stock options, ESPP stock purchase rights andrestricted stock (in thousands, except per share amounts): For the Years Ended May 30, 2015 May 31, 2014 May 25, 2013 Income before income taxes $(5,989) $(6,519) $(7,188) Net income $(3,823) $(4,424) $(4,914) Net income per share: Basic $(0.10) $(0.11) $(0.12) Diluted $(0.10) $(0.11) $(0.12) The weighted average estimated fair value per share of employee stock options granted during the years ended May 30, 2015, May 31, 2014 and May 25,2013 was $3.93, $3.82 and $4.31, respectively, using the Black-Scholes model with the following assumptions: For the Years Ended May 30, 2015 May 31, 2014 May 25, 2013Expected volatility 36.2% - 42.1% 38.4% - 44.1% 45.1% - 46.9%Risk-free interest rate 1.7% - 2.2% 1.1% - 1.8% 0.7% - 0.8%Expected dividends 1.9% - 2.1% 2.0% - 2.2% 1.9% - 2.2%Expected life 5.5 - 7.5 years 5.3 - 7.5 years 5.2 - 7.5 yearsAs of May 30, 2015, there was $7.4 million of total unrecognized compensation cost related to non-vested employee stock options granted. That cost isexpected to be recognized over a weighted-average period of 30 months. Stock-based compensation expense included in selling, general and administrativeexpenses for the years ended May 30, 2015, May 31, 2014 and May 25, 2013 was $6.0 million, $6.5 million and $7.2 million, respectively; this consisted of stock-based compensation expense related to employee stock options, employee stock purchases made via the Company’s ESPP and issuances of restricted stock.Stock-based compensation expense in the tables above includes compensation for restricted shares of $515,000, $406,000 and $296,000 for the years endedMay 30, 2015, May 31, 2014 and May 25, 2013, respectively. The Company granted 49,840, 34,632 and 34,622 shares of restricted stock for the years endedMay 30, 2015, May 31, 2014 and May 25, 2013, respectively. There were 35,390 and 23,441 restricted shares that vested in fiscal 2015 and 2014, respectively.There were 97,938, 84,379 and 73,708 unvested restricted shares as of May 30, 2015, May 31, 2014 and May 25, 2013, respectively. At May 30, 2015, there wasapproximately $1.2 million of total unrecognized compensation cost related to restricted shares, which is expected to be recognized over a weighted-average periodof 34 months.Excess tax benefits related to stock-based compensation expense are recognized as an increase to additional paid-in capital and tax shortfalls are recognizedas income tax expense unless there are excess tax benefits from previous equity awards to which it can be offset. On the adoption date of the required accountingfor stock-based compensation expense, the Company calculated the amount of eligible excess tax benefits available to offset future tax shortfalls in accordance withthe long-form method. 67Table of ContentsRESOURCES CONNECTION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) The Company recognizes compensation expense for only the portion of stock options and restricted stock units that are expected to vest, rather thanrecording forfeitures when they occur. If the actual number of forfeitures differs from that estimated by management, additional adjustments to compensationexpense may be required in future periods.Employee Stock Purchase PlanOn October 23, 2014, the Company’s stockholders approved an amendment to the ESPP to extend the term of the ESPP through October 16, 2024, and toincrease the maximum number of shares of the Company’s common stock authorized for issuance under the ESPP by an additional 1.5 million shares.The Company’s ESPP allows qualified employees (as defined in the ESPP) to purchase designated shares of the Company’s common stock at a price equalto 85% of the lesser of the fair market value of common stock at the beginning or end of each semi-annual stock purchase period. After approval of the amendment,a total of 5.9 million shares of common stock may be issued under the ESPP. The Company issued 337,000, 348,000 and 411,000 shares of common stock pursuantto the ESPP for the years ended May 30, 2015, May 31, 2014 and May 25, 2013, respectively. There are 1.6 million shares of common stock available for issuanceunder the ESPP as of May 30, 2015.14. Segment Information and Enterprise ReportingThe Company discloses information regarding operations outside of the U.S. The Company operates as one segment. The accounting policies for thedomestic and international operations are the same as those described in Note 2 — Summary of Significant Accounting Policies . Summarized information regardingthe Company’s domestic and international operations is shown in the following table. Amounts are stated in thousands: Revenue for the Years Ended Long-Lived Assets (1) as of May 30, 2015 May 31, 2014 May 25, 2013 May 30, 2015 May 31, 2014 United States $479,972 $442,784 $424,862 $172,637 $173,656 The Netherlands 15,777 22,304 24,395 17,582 22,541 Other 94,840 102,093 107,077 2,750 3,419 Total $590,589 $567,181 $556,334 $192,969 $199,616 (1)Long-lived assets are comprised of goodwill, intangible assets and property and equipment. 68Table of ContentsITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.None. ITEM 9A.CONTROLS AND PROCEDURES.Evaluation of Disclosure Controls and ProceduresAs required by SEC Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company carried out an evaluation,under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, ofthe effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the ExchangeAct) as of May 30, 2015. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosurecontrols and procedures were effective as of May 30, 2015.Management’s Report on Internal Control Over Financial ReportingManagement is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange ActRule 13a-15(f). We maintain internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting andthe preparation of financial statements for external purposes in accordance with generally accepted accounting principles.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.Under the supervision and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer, theCompany conducted an evaluation of the effectiveness of its internal control over financial reporting based on the criteria established in the 2013 Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included an assessment of thedesign of the Company’s internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Basedon this evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of May 30, 2015.The Company’s independent registered public accounting firm, McGladrey LLP, has audited the effectiveness of the Company’s internal control overfinancial reporting as of May 30, 2015, as stated in their report which is included in this Item under the heading “Report of Independent Registered PublicAccounting Firm.”Changes in Internal Control Over Financial ReportingThere has been no change in the Company’s internal control over financial reporting during the fiscal quarter ended May 30, 2015, that has materiallyaffected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 69Table of ContentsReport of Independent Registered Public Accounting FirmTo the Board of Directors and StockholdersResources Connection, Inc.We have audited Resources Connection, Inc.’s and subsidiaries’ internal control over financial reporting as of May 30, 2015, based on criteria established inInternal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Resources Connection,Inc.’s and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness ofinternal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is toexpress an opinion on the company’s internal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we planand perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Ouraudit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considerednecessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financialreporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (c) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate.In our opinion, Resources Connection, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of May 30,2015, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the TreadwayCommission in 2013.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet and therelated consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows of Resources Connection, Inc. and subsidiaries as of andfor the year ended May 30, 2015 and our report dated July 27, 2015 expressed an unqualified opinion./s/ McGladrey LLPIrvine, CaliforniaJuly 27, 2015 70Table of ContentsITEM 9B.OTHER INFORMATION.None.PART III ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.Executive Officers and DirectorsOur board of directors has adopted a code of business conduct and ethics that applies to our directors and employees, including our chief executive officer,chief financial officer and principal accounting officer and persons performing similar functions, as required by applicable rules of the SEC and NASDAQ StockMarket. The full text of our code of business conduct and ethics can be found on the investor relations page of our website at www.rgp.com . We intend to discloseany amendment to, or a waiver from, a provision of our code of business conduct and ethics that applies to our directors and executive officers, including our chiefexecutive officer, chief financial officer and principal accounting officer, or persons performing similar functions, by posting such information on the investorrelations page of our website at www.rgp.com to the extent required by applicable SEC and NASDAQ rules.Reference is made to the information regarding directors appearing in Section II under the caption “PROPOSAL 1. ELECTION OF DIRECTORS,” and tothe information under the captions “EXECUTIVE OFFICERS,” “SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE,” “BOARD OFDIRECTORS” and “BOARD OF DIRECTORS — AUDIT COMMITTEE,” in each case in the Company’s proxy statement related to its 2015 Annual Meeting ofStockholders to be filed with the SEC within 120 days after the end of the fiscal year ended May 30, 2015, which information is incorporated herein by reference. ITEM 11.EXECUTIVE COMPENSATION.The information appearing under the captions “COMPENSATION DISCUSSION AND ANALYSIS,” “COMPENSATION COMMITTEE REPORT ONEXECUTIVE COMPENSATION,” “COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION,” “EXECUTIVE COMPENSATIONTABLES FOR FISCAL 2015,” “POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL” and “BOARD OF DIRECTORS —DIRECTOR COMPENSATION — FISCAL 2015,” in each case, in the Company’s proxy statement related to its 2015 Annual Meeting of Stockholders to be filedwith the SEC within 120 days after the end of the fiscal year ended May 30, 2015, is incorporated herein by reference. ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.The information appearing under the caption “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” in the proxystatement related to the Company’s 2015 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended May 30,2015, is incorporated herein by reference.There are no arrangements, known to the Company, which might at a subsequent date result in a change in control of the Company. 71Table of ContentsThe following table sets forth, for the Company’s compensation plans under which equity securities of the Company are authorized for issuance, the numberof shares of the Company’s common stock subject to outstanding options, warrants, and rights, the weighted-average exercise price of outstanding options,warrants, and rights, and the number of shares remaining available for future award grants as of May 30, 2015: Number of Securities toBe Issued Upon Exercise of OutstandingOptions, Warrants andRights (a) Weighted Average Exercise Price of Outstanding Options,Warrants and Rights(b) Number of Securities Remaining Available forFuture Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(c) Equity compensation plans approved by securityholders 7,646,544(1) $17.64(2) 5,051,639(3) Equity compensation plans not approved by securityholders — — — Total 7,646,544 $17.64 5,051,639 (1)This amount includes 7,646,544 shares of our common stock subject to stock options outstanding under our 2014 Performance Incentive Plan but does notinclude 97,938 shares of our common stock issued and outstanding pursuant to unvested restricted stock awards under our 2014 Performance Incentive Plan.(2)This number reflects the weighted-average exercise price of outstanding options and has been calculated exclusive of outstanding restricted stock awardsissued under our 2014 Performance Incentive Plan.(3)Consists of 1,602,389 shares available for issuance under the Company’s ESPP and 3,449,250 shares available for issuance under the Company’s 2014Performance Incentive Plan. Shares available under the 2014 Performance Incentive Plan generally may be used for any type of award authorized under thatplan including stock options, restricted stock, stock bonuses, performance stock, stock units, phantom stock and other forms of awards granted ordenominated in the Company’s common stock. ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.The information appearing under the captions “BOARD OF DIRECTORS — DIRECTOR INDEPENDENCE” and “BOARD OF DIRECTORS — POLICYREGARDING TREATMENT OF RELATED PARTY TRANSACTIONS” in the proxy statement related to the Company’s 2015 Annual Meeting of Stockholdersto be filed with the SEC within 120 days after the end of the fiscal year ended May 30, 2015, is incorporated herein by reference. ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES.The information appearing under the caption “PROPOSAL 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM FOR FISCAL YEAR 2016” in the proxy statement related to the Company’s 2015 Annual Meeting of Stockholders to be filed with theSEC within 120 days after the end of the fiscal year ended May 30, 2015, is incorporated herein by reference.PART IV ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.(a) 1. Financial Statements.The following consolidated financial statements of the Company and its subsidiaries are included in Item 8 of this report:Report of Independent Registered Public Accounting FirmConsolidated Balance Sheets as of May 30, 2015 and May 31, 2014Consolidated Statements of Operations for each of the three years in the period ended May 30, 2015 72Table of ContentsConsolidated Statements of Comprehensive Income for each of the three years in the period ended May 30, 2015Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended May 30, 2015Consolidated Statements of Cash Flows for each of the three years in the period ended May 30, 2015Notes to Consolidated Financial Statements2. Financial Statement Schedules.Schedule II-Valuation and Qualifying Accounts are included in Note 2 and 5 to the Registrant’s Notes to Consolidated Financial Statements.Schedules I, III, IV and V have been omitted as they are not applicable.3. Exhibits. 73Table of ContentsEXHIBITS TO FORM 10-K ExhibitNumber Description of Document 3.1 Amended and Restated Certificate of Incorporation of Resources Connection, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant’sQuarterly Report on Form 10-Q for the quarter ended November 30, 2004). 3.2 Second Amended and Restated Bylaws, as amended (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K filing of July 26, 2012). 4.1 Stockholders Agreement, dated December 11, 2000, between Resources Connection, Inc. and certain stockholders of Resources Connection, Inc.(incorporated by reference to Exhibit 4.2 to the Registrant’s Amendment No. 7 to the Registrant’s Registration Statement on Form S-1 filed onDecember 12, 2000 (File No. 333-45000)). 4.2 Specimen Stock Certificate (incorporated by reference to Exhibit 4.3 to the Registrant’s Amendment No. 7 to the Registrant’s Registration Statementon Form S-1 filed on December 12, 2000 (File No. 333-45000)). 10.1+ Resources Connection, Inc. 1999 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement onForm S-1 filed on September 1, 2000 (File No. 333-45000)). 10.2+ Resources Connection, Inc. Employee Stock Purchase Plan (incorporated by reference to Annex B to the Company’s Proxy Statement filed with theSEC pursuant to Section 14(a) of the Exchange Act on September 11, 2008). 10.3+ Amended and Restated Employment Agreement, dated June 1, 2008, between Resources Connection, Inc. and Donald B. Murray (incorporated byreference to Exhibit 10.2 to the Registrant’s Form 8-K filing of June 3, 2008). 10.4+ Letter Agreement, dated April 23, 2013, between Donald B. Murray and Resources Connection, Inc. (incorporated by reference to Exhibit 10.2 tothe Registrant’s Form 8-K filing of April 24, 2013). 10.5+ Resources Connection, Inc. 2004 Performance Incentive Plan (incorporated by reference to Annex A to the Company’s Proxy Statement filed withthe SEC pursuant to Section 14(a) of the Exchange Act on September 11, 2008). 10.6+ Resources Connection, Inc. 2004 Performance Incentive Plan Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.22 tothe Registrant’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2005). 10.7+ Resources Connection, Inc. 2004 Performance Incentive Plan Nonqualified Stock Option Agreement (Netherlands) (incorporated by reference toExhibit 10.23 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2005). 10.8+ Resources Connection, Inc. 2004 Performance Incentive Plan Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.24 to theRegistrant’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2005). 10.9 Sublease Agreement, dated January 21, 2010, between O’Melveny & Myers LLP and Resources Connection Inc. DBA Resources GlobalProfessionals (incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K for the year ended May 28, 2011). 10.10 Loan Agreement, dated November 30, 2009, by and among Resources Connection, Inc., Resources Connection LLC and Bank of America, N.A.(incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K for the year ended May 28, 2011). 10.11 Amendment No. 1 to Loan Agreement, dated November 17, 2010, by and among Resources Connection, Inc., Resources Connection LLC and Bankof America N.A. (incorporated by reference to Exhibit 10.20 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended November 27,2010). 10.12 Amendment No. 2 to Loan Agreement, dated November 17, 2011, between Bank of America N.A. and Resources Connection, Inc. and ResourcesConnection LLC (incorporated by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K for the year ended May 25, 2013). 10.13 Amendment No. 3 to Loan Agreement, dated November 13, 2012, between Bank of America N.A. and Resources Connection, Inc. and ResourcesConnection LLC (incorporated by reference to Exhibit 10. 15 to the Registrant’s Annual Report on Form 10-K for the year ended May 25, 2013). 74Table of ContentsExhibitNumber Description of Document 10.14 Amendment No. 4 to Loan Agreement, dated November 15, 2013, between Bank of America N.A. and Resources Connection, Inc. and ResourcesConnection LLC (incorporated by reference to Exhibit 10.24 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended November23, 2013). 10.15 Amendment No. 5 to Loan Agreement, dated November 13, 2014, between Bank of America N.A. and Resources Connection, Inc. and ResourcesConnection LLC (incorporated by reference to Exhibit 10.22 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended November29, 2014). 10.16+ Sample Restricted Stock Award Agreement (incorporated by reference to Exhibit 99.3 to the Registrant’s Form 8-K filing of July 15, 2005). 10.17+ Employment Agreement, dated July 17, 2008, between Resources Connection, Inc. and Kate W. Duchene (incorporated by reference to Exhibit10.1 to the Registrant’s Form 8-K filing of July 21, 2008). 10.18+ Employment Agreement, dated July 17, 2008, between Resources Connection, Inc. and Nathan W. Franke (incorporated by reference to Exhibit10.2 to the Registrant’s Form 8-K filing of July 21, 2008). 10.19+ Employment Agreement, dated April 23, 2013, between Resources Connection, Inc. and Anthony Cherbak (incorporated by reference to Exhibit10.1 to the Registrant’s Form 8-K filing of April 24, 2013). 10.20+ Employment Agreement, dated July 30, 2013, between Resources Connection, Inc. and Tracy Stephens (incorporated by reference to Exhibit 10.1to the Registrant’s Form 8-K filing of August 1, 2013). 10.21+ Form of Indemnification Agreement between the Registrant and each of its directors and executive officers (incorporated by reference to Exhibit10.26 to the Registrant’s Form 10-K for the year ended May 31, 2008). 10.22+ Resources Connection, Inc. Directors’ Compensation Policy (incorporated by reference to Exhibit 10.21 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended February 26, 2011). 10.23+ Resources Connection, Inc. 2014 Performance Incentive Plan (incorporated by reference to Exhibit 10.22 to the Registrant’s Form 8-K filing ofOctober 28, 2014). 10.24+ Resources Connection, Inc. Employee Stock Purchase Plan (incorporated by reference to Annex B to the Company’s Proxy Statement filed withthe SEC pursuant to Section 14(a) of the Exchange Act on September 15, 2014). 21.1* List of subsidiaries. 23.1* Consent of Independent Registered Public Accounting Firm. 31.1* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of2002. 31.2* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of2002. 32.1** Rule 1350 Certification of Chief Executive Officer. 32.2** Rule 1350 Certification of Chief Financial Officer.101.INS* XBRL Instance.101.SCH* XBRL Taxonomy Extension Schema.101.CAL* XBRL Taxonomy Extension Calculation.101.DEF* XBRL Taxonomy Extension Definition.101.LAB* XBRL Taxonomy Extension Labels.101.PRE* XBRL Taxonomy Extension Presentation. *Filed herewith.**Furnished herewith.+Indicates a management contract or compensatory plan or arrangement. 75Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report onForm 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. R ESOURCES C ONNECTION , I NC .By: / S / N ATHAN W. F RANKE Nathan W. Franke Chief Financial OfficerDate: July 27, 2015Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the followingpersons on behalf of the Registrant in the capacities and on the dates indicated. Signature Title Date/ S / A NTHONY C HERBAKAnthony Cherbak President, Chief Executive Officerand Director (PrincipalExecutive Officer) July 27, 2015/ S / N ATHAN W. F RANKENathan W. Franke Chief Financial Officer andExecutive Vice President(Principal Financial Officer and July 27, 2015 Principal Accounting Officer) / S / S USAN J. C RAWFORD Director July 27, 2015Susan J. Crawford / S / N EIL D IMICK Director July 27, 2015Neil Dimick / S / R OBERT K ISTINGER Director July 27, 2015Robert Kistinger / S / D ONALD B. M URRAY Executive Chairman and Director July 27, 2015Donald B. Murray / S / A. R OBERT P ISANO Director July 27, 2015A. Robert Pisano / S / A NNE S HIH Director July 27, 2015Anne Shih / S / J OLENE S YKES S ARKIS Director July 27, 2015Jolene Sykes Sarkis / S / M ICHAEL H. W ARGOTZ Director July 27, 2015Michael H. Wargotz 76Table of ContentsEXHIBIT INDEXEXHIBITS TO FORM 10-K ExhibitNumber Description of Document 3.1 Amended and Restated Certificate of Incorporation of Resources Connection, Inc. (incorporated by reference to Exhibit 10.2 to the Registrant’sQuarterly Report on Form 10-Q for the quarter ended November 30, 2004). 3.2 Second Amended and Restated Bylaws, as amended (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K filing of July 26, 2012). 4.1 Stockholders Agreement, dated December 11, 2000, between Resources Connection, Inc. and certain stockholders of Resources Connection, Inc.(incorporated by reference to Exhibit 4.2 to the Registrant’s Amendment No. 7 to the Registrant’s Registration Statement on Form S-1 filed onDecember 12, 2000 (File No. 333-45000)). 4.2 Specimen Stock Certificate (incorporated by reference to Exhibit 4.3 to the Registrant’s Amendment No. 7 to the Registrant’s RegistrationStatement on Form S-1 filed on December 12, 2000 (File No. 333-45000)). 10.1+ Resources Connection, Inc. 1999 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statementon Form S-1 filed on September 1, 2000 (File No. 333-45000)). 10.2+ Resources Connection, Inc. Employee Stock Purchase Plan (incorporated by reference to Annex B to the Company’s Proxy Statement filed withthe SEC pursuant to Section 14(a) of the Exchange Act on September 11, 2008). 10.3+ Amended and Restated Employment Agreement, dated June 1, 2008, between Resources Connection, Inc. and Donald B. Murray (incorporated byreference to Exhibit 10.2 to the Registrant’s Form 8-K filing of June 3, 2008). 10.4+ Letter Agreement, dated April 23, 2013, between Donald B. Murray and Resources Connection, Inc. (incorporated by reference to Exhibit 10.2 tothe Registrant’s Form 8-K filing of April 24, 2013). 10.5+ Resources Connection, Inc. 2004 Performance Incentive Plan (incorporated by reference to Annex A to the Company’s Proxy Statement filed withthe SEC pursuant to Section 14(a) of the Exchange Act on September 11, 2008). 10.6+ Resources Connection, Inc. 2004 Performance Incentive Plan Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.22 tothe Registrant’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2005). 10.7+ Resources Connection, Inc. 2004 Performance Incentive Plan Nonqualified Stock Option Agreement (Netherlands) (incorporated by reference toExhibit 10.23 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2005). 10.8+ Resources Connection, Inc. 2004 Performance Incentive Plan Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.24 to theRegistrant’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2005). 10.9 Sublease Agreement, dated January 21, 2010, between O’Melveny & Myers LLP and Resources Connection Inc. DBA Resources GlobalProfessionals (incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K for the year ended May 28, 2011). 10.10 Loan Agreement, dated November 30, 2009, by and among Resources Connection, Inc., Resources Connection LLC and Bank of America, N.A.(incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K for the year ended May 28, 2011). 10.11 Amendment No. 1 to Loan Agreement, dated November 17, 2010, by and among Resources Connection, Inc., Resources Connection LLC andBank of America N.A. (incorporated by reference to Exhibit 10.20 to the Registrant’s Quarterly Report on Form 10-Q for the quarter endedNovember 27, 2010). 10.12 Amendment No. 2 to Loan Agreement, dated November 17, 2011, between Bank of America N.A. and Resources Connection, Inc. and ResourcesConnection LLC (incorporated by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K for the year ended May 25, 2013). 77Table of ContentsExhibitNumber Description of Document 10.13 Amendment No. 3 to Loan Agreement, dated November 13, 2012, between Bank of America N.A. and Resources Connection, Inc. and ResourcesConnection LLC (incorporated by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K for the year ended May 25, 2013). 10.14 Amendment No. 4 to Loan Agreement, dated November 15, 2013, between Bank of America N.A. and Resources Connection, Inc. and ResourcesConnection LLC (incorporated by reference to Exhibit 10.24 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended November23, 2013). 10.15 Amendment No. 5 to Loan Agreement, dated November 13, 2014, between Bank of America N.A. and Resources Connection, Inc. and ResourcesConnection LLC (incorporated by reference to Exhibit 10.22 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended November29, 2014). 10.16+ Sample Restricted Stock Award Agreement (incorporated by reference to Exhibit 99.3 to the Registrant’s Form 8-K filing of July 15, 2005). 10.17+ Employment Agreement, dated July 17, 2008, between Resources Connection, Inc. and Kate W. Duchene (incorporated by reference to Exhibit10.1 to the Registrant’s Form 8-K filing of July 21, 2008). 10.18+ Employment Agreement, dated July 17, 2008, between Resources Connection, Inc. and Nathan W. Franke (incorporated by reference to Exhibit10.2 to the Registrant’s Form 8-K filing of July 21, 2008). 10.19+ Employment Agreement, dated April 23, 2013, between Resources Connection, Inc. and Anthony Cherbak (incorporated by reference to Exhibit10.1 to the Registrant’s Form 8-K filing of April 24, 2013). 10.20+ Employment Agreement, dated July 30, 2013, between Resources Connection, Inc. and Tracy Stephens (incorporated by reference to Exhibit 10.1to the Registrant’s Form 8-K filing of August 1, 2013). 10.21+ Form of Indemnification Agreement between the Registrant and each of its directors and executive officers (incorporated by reference to Exhibit10.26 to the Registrant’s Form 10-K for the year ended May 31, 2008). 10.22+ Resources Connection, Inc. Directors’ Compensation Policy (incorporated by reference to Exhibit 10.21 to the Registrant’s Quarterly Report onForm 10-Q for the quarter ended February 26, 2011). 10.23+ Resources Connection, Inc. 2014 Performance Incentive Plan (incorporated by reference to Exhibit 10.22 to the Registrant’s Form 8-K filing ofOctober 28, 2014). 10.24+ Resources Connection, Inc. Employee Stock Purchase Plan (incorporated by reference to Annex B to the Company’s Proxy Statement filed withthe SEC pursuant to Section 14(a) of the Exchange Act on September 15, 2014). 21.1* List of Subsidiaries. 23.1* Consent of Independent Registered Public Accounting Firm. 31.1* Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of2002. 31.2* Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1* Rule 1350 Certification of Chief Executive Officer. 32.2* Rule 1350 Certification of Chief Financial Officer.101.INS* XBRL Instance.101.SCH* XBRL Taxonomy Extension Schema.101.CAL* XBRL Taxonomy Extension Calculation.101.DEF* XBRL Taxonomy Extension Definition.101.LAB* XBRL Taxonomy Extension Labels.101.PRE* XBRL Taxonomy Extension Presentation. *Filed herewith.+Indicates a management contract or compensatory plan or arrangement. 78EXHIBIT 21.1LIST OF SUBSIDIARIES Name of Subsidiary Jurisdiction of OrganizationResources Connection LLC DelawareNames under which Resources Connection LLC does business: Resources Global Professionals Resources Connection LLC Re:sources Connection LLC RCTC LLC RCTC Resources Connection LLC of Delaware Resources Connection LLC DBA RCTC Resources Connection LLC, a limited liability company of Delaware Resources Audit Solutions, LLC DelawareResources Healthcare Solutions, LLC DelawareResources Legal Solutions, LLC DelawareRGP Property LLC DelawareSitrick Brincko Group LLC DelawareNames under which Sitrick Brincko Group LLC does business: SITRICK AND COMPANY Resources Connection Australia Pty Ltd. AustraliaNames under which Resources Connection Australia Pty Ltd. does business: Resources Global Professionals Resources Global Professionals (Belgium) NV BelgiumResources Global Professionals, Inc. (Canada) CanadaResources Global Enterprise Consulting (Beijing) Co., Ltd. People’s Republic of ChinaResources Global Enterprise Consulting (Beijing) Co., Ltd. People’s Republic of ChinaShanghai Branch Company Resources Global Professionals (Hong Kong) Limited Hong Kong, People’s Republic of ChinaResources Global Professionals (Denmark) AS DenmarkResources Global Professionals (France) SAS FranceResources Global Professionals (Germany) GmbH GermanyResources Global Professionals (India) Private Ltd. IndiaResources Global Professionals (Ireland) Ltd. IrelandResources Global Professionals (Italy) SRL ItalyResources Global Professionals (Japan) K.K. JapanResources Global Professionals (Korea) Ltd. South KoreaResources Global Professionals (Luxembourg) Sárl LuxembourgResources Management Mexico S de RL de CV MexicoResources Connection Mexico S de RL de CV MexicoResources Global Professionals (Europe) B.V. NetherlandsResources Global Professionals Holdings B.V. NetherlandsResources Management & Finance B.V. NetherlandsResources Pension & Risk B.V. NetherlandsResources Global Professionals (Norway) AS NorwayResources Global Professionals (Singapore) Pte. Ltd. SingaporeM & D Selection AB SwedenResources Global Professionals Sweden AB SwedenResources Global Professionals (Switzerland) GmbH SwitzerlandResources Connection (Taiwan) Ltd. TaiwanCompliance.co.uk Ltd United KingdomResources Compliance (UK) Ltd United KingdomResources Connection (UK) Ltd. United Kingdom (England and Wales)Names under which Resources Connection (UK) Ltd. does business: Resources Global Professionals (UK) Exhibit 23.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in Registration Statements (Nos. 333-201042, 333-158499, 333-142145, 333-127579, 333-54880 and 333-52730) onForm S-8 of Resources Connection, Inc. of our reports dated July 27, 2015, relating to our audits of the consolidated financial statements and internal control overfinancial reporting, which appear in this Annual Report on Form 10-K of Resources Connection, Inc. for the year ended May 30, 2015./s/ McGladrey LLPIrvine, CaliforniaJuly 27, 2015EXHIBIT 31.1Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934I, Anthony Cherbak, certify that: 1.I have reviewed this annual report on Form 10-K of Resources Connection, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles;c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: July 27, 2015/s/ ANTHONY CHERBAKAnthony CherbakPresident and Chief Executive OfficerEXHIBIT 31.2Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934I, Nathan W. Franke, certify that: 1.I have reviewed this annual report on Form 10-K of Resources Connection, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles;c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: July 27, 2015/s/ NATHAN W. FRANKENathan W. FrankeChief Financial Officer and Executive Vice PresidentEXHIBIT 32.1CERTIFICATION PURSUANT TO 18 U.S.C. 1350,AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report on Form 10-K for the fiscal year ended May 30, 2015 of Resources Connection, Inc. (the “Form 10-K”), I, AnthonyCherbak, Chief Executive Officer of Resources Connection, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:1. The Form 10-K fully complies with the requirements of section 13(a) and 15(d) of the Securities Exchange Act of 1934; and2. The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of ResourcesConnection, Inc.July 27, 2015/s/ ANTHONY CHERBAKAnthony CherbakPresident and Chief Executive OfficerThe foregoing certification is being furnished to the Securities and Exchange Commission pursuant to 18 U.S.C. Section 1350. It is not being filed forpurposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whethermade before or after the date hereof, regardless of any general incorporation language in such filing.EXHIBIT 32.2CERTIFICATION PURSUANT TO 18 U.S.C. 1350,AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report on Form 10-K for the fiscal year ended May 30, 2015 of Resources Connection, Inc. (the “Form 10-K”), I, Nathan W.Franke, Chief Financial Officer of Resources Connection, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:1. The Form 10-K fully complies with the requirements of section 13(a) and 15(d) of the Securities Exchange Act of 1934; and2. The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of ResourcesConnection, Inc.July 27, 2015/s/ NATHAN W. FRANKENathan W. FrankeChief Financial Officer andExecutive Vice PresidentThe foregoing certification is being furnished to the Securities and Exchange Commission pursuant to 18 U.S.C. Section 1350. It is not being filed forpurposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whethermade before or after the date hereof, regardless of any general incorporation language in such filing.

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