10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Quarterly Report on

FORM 10-Q

(Mark one)

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended April 2, 2010
¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from                  to

Commission File Number 1-7463

JACOBS ENGINEERING GROUP INC.

(Exact name of Registrant as specified in its charter)

Delaware (State of incorporation)	95-4081636 (I.R.S. employer identification number)
1111 South Arroyo Parkway, Pasadena, California (Address of principal executive offices)	91105 (Zip code)

(626) 578 – 3500

(Registrant’s telephone number, including area code)

Indicate by check-mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:  x  Yes     ¨  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 posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  x  Yes     ¨  No

Indicate 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 “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check-mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  ¨  Yes     x  No

Number of shares of common stock outstanding at April 22, 2010:    125,018,964

JACOBS ENGINEERING GROUP INC.

INDEX TO FORM 10-Q

			Page No.
PART I	FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Consolidated Balance Sheets – April 2, 2010 (Unaudited) and October 2, 2009	3
		Consolidated Statements of Earnings - Unaudited Three and Six Months Ended April 2, 2010 and April 3, 2009	4
		Consolidated Statements of Comprehensive Income  – Unaudited Three and Six Months Ended April 2, 2010 and April 3, 2009	5
		Consolidated Statements of Cash Flows – Unaudited Six Months Ended April 2, 2010 and April 3, 2009	6
		Notes to Consolidated Financial Statements – Unaudited	7 – 13
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14 – 20
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
	Item 4.	Controls and Procedures	21
PART II	OTHER INFORMATION
	Item 1.	Legal Proceedings	22
	Item 1A.	Risk Factors	23
	Item 5.	Other Information	24
	Item 6.	Exhibits	25
SIGNATURES			26

2

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share information)

	April 2, 2010 (Unaudited)			October 2, 2009
ASSETS
Current Assets:
Cash and cash equivalents	$	839,057		$	1,033,619
Receivables		1,698,774			1,618,561
Deferred income taxes		128,444			117,066
Prepaid expenses and other		44,055			49,203
Total current assets		2,710,330			2,818,449
Property, Equipment and Improvements, Net		223,776			240,350
Other Noncurrent Assets:
Goodwill		1,125,591			929,842
Miscellaneous		591,125			439,973
Total other non-current assets		1,716,716			1,369,815
	$	4,650,822		$	4,428,614
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable	$	95,579		$	17,495
Accounts payable		316,308			340,651
Accrued liabilities		695,803			679,109
Billings in excess of costs		237,685			252,149
Income taxes payable		7,331			6,497
Total current liabilities		1,352,706			1,295,901
Long-term Debt		561			737
Other Deferred Liabilities		485,268			500,501
Commitments and Contingencies
Stockholders’ Equity:
Capital stock:
Preferred stock, $1 par value, authorized—1,000,000 shares; issued and outstanding—none		—			—
Common stock, $1 par value, authorized—240,000,000 shares; issued and outstanding—124,904,879 shares and 124,229,933 shares, respectively		124,905			124,230
Additional paid-in capital		735,202			703,860
Retained earnings		2,156,895			2,009,338
Accumulated other comprehensive loss		(210,308	)		(211,515	)
Total Jacobs stockholders’ equity		2,806,694			2,625,913
Noncontrolling interests		5,593			5,562
Total Group stockholders’ equity		2,812,287			2,631,475
	$	4,650,822		$	4,428,614

See the accompanying Notes to Consolidated Financial Statements.

3

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

For the Three and Six Months Ended April 2, 2010 and April 3, 2009

(In thousands, except per share information)

	For the Three Months Ended						For the Six Months Ended
	April 2, 2010			April 3, 2009			April 2, 2010			April 3, 2009
Revenues	$	2,586,974		$	2,975,452		$	5,064,759		$	6,208,105
Costs and Expenses:
Direct cost of contracts		(2,223,793	)		(2,571,828	)		(4,352,369	)		(5,367,062	)
Selling, general and administrative expenses		(241,177	)		(232,936	)		(476,905	)		(489,287	)
Operating Profit		122,004			170,688			235,485			351,756
Other Income (Expense):
Interest income		796			2,589			1,634			7,191
Interest expense		(705	)		(797	)		(1,317	)		(2,026	)
Miscellaneous expense, net		(935	)		(1,853	)		(1,494	)		(4,712	)
Total other income (expense), net		(844	)		(61	)		(1,177	)		453
Earnings Before Taxes		121,160			170,627			234,308			352,209
Income Tax Expense		(43,593	)		(61,457	)		(84,340	)		(126,922	)
Net Earnings of the Group		77,567			109,170			149,968			225,287
Net (Income) Loss Attributable to Noncontrolling Interests		(67	)		117			(31	)		350
Net Earnings Attributable to Jacobs	$	77,500		$	109,287		$	149,937		$	225,637
Net Earnings Per Share:
Basic	$	0.63		$	0.89		$	1.21		$	1.84
Diluted	$	0.62		$	0.88		$	1.20		$	1.82

See the accompanying Notes to Consolidated Financial Statements.

4

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three and Six Months Ended April 2, 2010 and April 3, 2009

(In thousands)

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	April 2, 2010			April 3, 2009			April 2, 2010			April 3, 2009
Net Earnings of the Group	$	77,567		$	109,170		$	149,968		$	225,287
Other Comprehensive Income (Loss):
Foreign currency translation adjustment		(12,256	)		(7,387	)		(6,307	)		(49,328	)
Gain (loss) on cash flow hedges		(498	)		4,878			876			(9,103	)
Change in pension liability		11,571			(231	)		9,428			24,304
Other comprehensive income (loss) before taxes		(1,183	)		(2,740	)		3,997			(34,127	)
Income tax benefit (expense)		(2,918	)		(1,569	)		(2,790	)		5,389
Net other comprehensive income (loss)		(4,101	)		(4,309	)		1,207			(28,738	)
Net Comprehensive Income of the Group		73,466			104,861			151,175			196,549
Net Comprehensive (Income) Loss Attributable to Noncontrolling Interests		(67	)		117			(31	)		350
Net Comprehensive Income Attributable to Jacobs	$	73,399		$	104,978		$	151,144		$	196,899

See the accompanying Notes to Consolidated Financial Statements.

5

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended April 2, 2010 and April 3, 2009

(In thousands)

(Unaudited)

	2010			2009
Cash Flows from Operating Activities:
Net earnings	$	149,937		$	225,637
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization:
Property, equipment and improvements		33,265			33,170
Intangible assets		11,576			4,234
Gain from investments		—			(1,249	)
Stock based compensation		11,585			11,621
Excess tax benefits from stock based compensation		(1,477	)		(2,048	)
Losses on sales of assets, net		11			93
Changes in certain assets and liabilities, excluding the effects of businesses acquired:
Receivables		(53,874	)		103,298
Prepaid expenses and other current assets		6,142			2,511
Accounts payable		(33,211	)		(83,286	)
Accrued liabilities		(2,860	)		(84,331	)
Billings in excess of costs		3,433			18,509
Income taxes payable		(8,768	)		(23,082	)
Deferred income taxes		1,017			(3,947	)
Other, net		391			—
Net cash provided by operating activities		117,167			201,130
Cash Flows from Investing Activities:
Additions to property and equipment		(23,372	)		(36,309	)
Disposals of property and equipment		12,179			1,641
Changes in investments, net		(121,720	)		(4,959	)
Acquisitions of businesses, net of cash acquired		(261,850	)		(1,033	)
Changes in other non-current assets, net		(11,296	)		23,514
Net cash used for investing activities		(406,059	)		(17,146	)
Cash Flows from Financing Activities:
Repayments of long-term borrowings		(150	)		(18,985	)
Net change in short-term borrowings		79,218			235
Proceeds from issuances of common stock		18,062			22,156
Excess tax benefits from stock based compensation		1,477			2,048
Changes in other deferred liabilities, net		(5,847	)		(5,775	)
Net cash provided by (used for) financing activities		92,760			(321	)
Effect of Exchange Rate Changes		1,570			(15,431	)
Net Increase (Decrease) in Cash and Cash Equivalents		(194,562	)		168,232
Cash and Cash Equivalents at the Beginning of the Period		1,033,619			604,420
Cash and Cash Equivalents at the End of the Period	$	839,057		$	772,652

See the accompanying Notes to Consolidated Financial Statements.

6

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

Basis of Presentation

Unless the context otherwise requires:

• References herein to “Jacobs” are to Jacobs Engineering Group Inc. and its predecessors;

• References herein to the “Company,” “we,” “us” or “our” are to Jacobs Engineering Group Inc. and its consolidated subsidiaries; and

• References herein to the “Group” are to the combined economic interests and activities of the Company and the persons and entities holding noncontrolling interests in our consolidated subsidiaries.

The accompanying consolidated financial statements and financial information included herein have been prepared pursuant to the interim period reporting requirements of Form 10-Q. Consequently, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. Readers of this report should also read our consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 2, 2009 (“2009 Form 10-K”) as well as Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations also included in our 2009 Form 10-K. Readers should also read our report on Form 10-Q for the quarterly period ended January 1, 2010.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of our consolidated financial statements at April 2, 2010 and for the three and six month periods ended April 2, 2010 and April 3, 2009.

The Company has evaluated subsequent events through the date of filing this Form 10-Q with the SEC. No material subsequent events have occurred since April 2, 2010 that required recognition or disclosure in these financial statements.

Our interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year.

New Accounting Standards

In December 2007, the Financial Accounting Standards Board (“FASB”) revised the accounting and reporting for business combinations. These revisions require, among other things, that acquisition-related costs be recognized separately from the costs of acquired businesses; that in a business combination achieved in stages, an acquiree to recognize the identifiable assets, liabilities and noncontrolling interest in the acquiree at the full amounts of their fair values as of the acquisition date; and, that an acquirer recognize assets or liabilities from contingencies as of the acquisition date. The requirement to measure the noncontrolling interests in the acquiree at fair value will result in recognizing the goodwill attributable to the noncontrolling interest in addition to that attributable to the acquirer. These revisions were effective for the Company October 3, 2009.

In December 2007, the FASB revised the accounting and reporting for noncontrolling (formerly known as minority) interests in consolidated financial statements. These revisions clarified that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. The revisions also established that net income attributable to both the parent and the noncontrolling interests be reported in the consolidated statement of earnings, and eliminated the requirement of purchase accounting for a parent’s acquisition of a noncontrolling ownership interest. These revisions were effective for the Company October 3, 2009.

7

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

(continued)

Depending on the size and nature of an acquisition, the changes described above could have a material effect on the Company’s consolidated financial statements.

In June 2009, the FASB revised the accounting for variable interest entities (“VIEs”). These revisions require the Company to perform an analysis to determine whether its variable interests in VIEs give the Company a controlling financial interest in such entities. The Company is also required to assess whether it has the power to direct the activities of its VIEs and if it has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. The revisions adopted by the FASB eliminate the quantitative approach previously required for determining the primary beneficiary of a VIE and significantly enhances disclosures. The new accounting requirements are effective for the Company October 2, 2010. The Company is currently evaluating the impact of this statement on its consolidated financial statements.

Business Combination

On February 16, 2010, the Company acquired Jordan, Jones and Goulding, Inc. (“JJG”), a 500-person professional services firm headquartered in Atlanta, Georgia. Founded in 1958, JJG provides engineering, planning, and consulting services for water, wastewater, environmental and other clients. The results of operations of JJG for the second quarter of fiscal 2010 were not material. The purchase price allocation has not been completed. Included in the Company’s Consolidated Balance Sheet at April 2, 2010 is goodwill of approximately $37.3 million associated with the acquisition of JJG.

8

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

(continued)

Receivables

The following table presents the components of “Receivables” appearing in the accompanying Consolidated Balance Sheets at April 2, 2010 and October 2, 2009 as well as certain other related information (in thousands):

	2010			2009
Components of receivables:
Amounts billed	$	866,797		$	846,716
Unbilled receivables and other		794,825			750,035
Retentions receivable		46,934			31,409
Allowance for doubtful accounts		(9,782	)		(9,599	)
Total receivables, net	$	1,698,774		$	1,618,561
Other information about receivables:
Amounts due from the United States federal government, included above, net of advanced billings	$	394,054		$	366,158
Claims receivable:
Relating to the waste incineration project, explained below	$	35,197		$	37,887
Other		17,172			19,813
Total	$	52,369		$	57,700

Unbilled receivables represent reimbursable costs and amounts earned and reimbursable under contracts in progress as of the respective balance sheet dates. Such amounts become billable according to the contract terms, which usually consider the passage of time, achievement of certain milestones or completion of the project.

Claims receivable represent costs incurred on contracts to the extent it is probable that such claims will result in additional contract revenue and the amount of such additional revenue can be reliably estimated. The claim relating to the waste incineration project is discussed more fully in Note 11 — Contractual Guarantees, Litigation, Investigations, and Insurance of Notes to Consolidated Financial Statements beginning on page F-25 of our 2009 Form 10-K. Due to the timing of when this claim may be settled, the receivable is included in “Other Noncurrent Assets” in the accompanying Consolidated Balance Sheets. The claim relates to a dispute involving proper waste feed, content of residues, final acceptance of the plant, and costs of operation and maintenance of the plant. The other claims receivable are included in “Receivables” in the accompanying Consolidated Balance Sheets.

9

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

(continued)

Property, Equipment and Improvements, Net

Property, Equipment and Improvements, net in the accompanying Consolidated Balance Sheets at April 2, 2010 and October 2, 2009 consisted of the following (in thousands):

	2010			2009
Land	$	12,173		$	11,901
Buildings		88,332			85,067
Equipment		434,145			430,220
Leasehold improvements		119,146			125,050
Construction in progress		16,552			5,845
		670,348			658,083
Accumulated depreciation and amortization		(446,572	)		(417,733	)
	$	223,776		$	240,350

Revenue Accounting for Contracts / Accounting for Joint Ventures

In general, we recognize revenues at the time we provide services. Depending on the commercial terms of the contract, we recognize revenues either when costs are incurred, or using the percentage-of-completion method of accounting by relating contract costs incurred to date to the total estimated costs at completion. Contract losses are provided for in their entirety in the period they become known, without regard to the percentage-of-completion.

The nature of our business sometimes results in clients, subcontractors or vendors presenting claims to us for recovery of costs they incurred in excess of what they expected to incur, or for which they believe they are not contractually responsible. In those situations where a claim against us may result in additional costs to the contract, we include in the total estimated costs of the contract (and therefore, the estimated amount of margin to be earned under the contract) an estimate, based on all relevant facts and circumstances available, of the additional costs to be incurred. Similarly, and in the normal course of business, we may present claims to our clients for costs we have incurred for which we believe we are not contractually responsible. With respect to such claims, we include in revenues the amount of costs incurred, without profit, to the extent it is probable that the claims will result in additional contract revenue, and the amount of such additional revenue can be reliably estimated. Costs associated with unapproved change orders are included in revenues using substantially the same criteria used for claims.

Certain cost-reimbursable contracts include incentive-fee arrangements. The incentive fees in such contracts can be based on a variety of factors but the most common are the achievement of target completion dates or target costs, and/or meeting other performance criteria as defined in the contracts. Failure to meet these targets can result in unrealized incentive fees. We recognize incentive fees based on expected results using the percentage-of-completion method of accounting. As the contract progresses and more information becomes available, the estimate of the anticipated incentive fee that will be earned is revised as necessary. We bill incentive fees based on the terms and conditions of the individual contracts. In certain situations we are allowed to bill a portion of the incentive fees over the performance period of the contract. In other situations, we are allowed to bill incentive fees only after the target criterion has been achieved. Incentive fees which have been recognized but not billed are included in receivables in the accompanying Consolidated Balance Sheets.

10

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

(continued)

Certain cost-reimbursable contracts with government customers as well as certain commercial clients provide that contract costs are subject to audit and adjustment. In this situation, revenues are recorded at the time services are performed based upon the amounts we expect to realize upon completion of the contracts. Revenues are not recognized for non-recoverable costs. In those situations where an audit indicates that we may have billed a client for costs not allowable under the terms of the contract, we estimate the amount of such nonbillable costs and adjust our revenues accordingly.

As is common to the industry, we execute certain contracts jointly with third parties through various forms of joint ventures and consortiums. For certain of these joint ventures (i.e., where we have an undivided interest in the assets and liabilities of the joint venture), we recognize our proportionate share of joint venture revenues, costs, and operating profit in our Consolidated Statements of Earnings. For other investments in engineering and construction joint ventures, we use the equity method of accounting.

Very few of our joint ventures have employees. Although the joint ventures own and hold the contracts with the clients, the services required by the contracts are typically performed by us and our joint venture partners, or by other subcontractors under subcontracting agreements with the joint ventures. The assets of our joint ventures, therefore, consist almost entirely of cash and receivables (representing amounts due from clients), and the liabilities of our joint ventures consist almost entirely of amounts due to the joint venture partners (for services provided by the partners to the joint ventures under their individual subcontracts) and other subcontractors. In general, at any given time, the equity of our joint ventures represents the undistributed profits earned on contracts the joint ventures hold with clients. None of our joint ventures have third-party debt or credit facilities. Our joint ventures, therefore, are simply mechanisms used to deliver engineering and construction services to clients. Rarely do they, in and of themselves, present any risk of loss to us or to our partners separate from those that we would carry if we were performing the contract on our own. Under accounting principles generally accepted in the United States (“U.S. GAAP”), our share of losses associated with the contracts held by the joint ventures, if and when they occur, has always been reflected in our Consolidated Financial Statements.

We have analyzed our joint ventures and have classified them into two groups: (i) those VIEs of which we are the primary beneficiary of the VIEs expected residual returns or losses; and (ii) those VIEs of which we are not the primary beneficiary of the VIEs expected residual returns or losses. In accordance with U.S. GAAP, we apply the consolidation method of accounting for our investment in material VIEs of which we are the primary beneficiary.

The following table presents certain financial information as of April 2, 2010 about those VIEs (i) for which we are the primary beneficiary, and (ii) for which we are not the primary beneficiary (in thousands):

Selected financial information about those VIEs for which we are the primary beneficiary:
Total assets	$	61,837
Total liabilities	$	51,158
Selected financial information about those VIEs for which we are not the primary beneficiary:
Total assets	$	262,307
Total liabilities	$	220,963

11

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

(continued)

When we are directly responsible for subcontractor labor or third-party materials and equipment, we reflect the costs of such items in both revenues and costs. On those projects where the client elects to pay for such items directly and we have no associated responsibility for such items, these amounts are not reflected in either revenues or costs.

The following table sets forth pass-through costs included in revenues for the three and six months ended April 2, 2010 and April 3, 2009 (in thousands):

	For the Three Months Ended				For the Six Months Ended
	April 2, 2010		April 3, 2009		April 2, 2010		April 3, 2009
Pass-through costs included in revenues	$	721,682	$	1,160,875	$	1,448,948	$	2,359,093

Disclosures About Defined Pension Benefit Obligations

The following table presents the components of net periodic benefit cost recognized in earnings during each of the three and six month periods ended April 2, 2010 and April 3, 2009 (in thousands):

	For the Three Months Ended						For the Six Months Ended
Component:	April 2, 2010			April 3, 2009			April 2, 2010			April 3, 2009
Service cost	$	5,308		$	4,553		$	11,387		$	9,232
Interest cost		12,784			11,843			27,043			24,075
Expected return on plan assets		(11,295	)		(10,661	)		(23,757	)		(21,684	)
Amortization of previously unrecognized items		2,986			1,286			6,293			2,623
Net periodic benefit cost	$	9,783		$	7,021		$	20,966		$	14,246

The following table presents certain information regarding Company cash contributions to our pension plans for fiscal 2010 (in thousands):

Cash contributions made during the first six months of fiscal 2010	$	25,265
Cash contributions we expect to make during the remainder of fiscal 2010		17,075
Total	$	42,340

The change in pension liability included in the Consolidated Statements of Comprehensive Income for the three and six months ended April 2, 2010 and April 3, 2009 relates primarily to the effects of exchange rate changes.

12

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

(continued)

Earnings Per Share and Certain Related Information

The following table (i) reconciles the denominator used to compute basic earnings per share (“EPS”) to the denominator used to compute diluted EPS for the three and six months ended April 2, 2010 and April 3, 2009; (ii) provides information regarding the number of non-qualified stock options that were antidilutive and therefore disregarded in calculating the weighted average number of shares outstanding used in computing diluted EPS; and (iii) the number of shares of common stock issued from the exercise of stock options and the release of restricted stock (in thousands):

	For the Three Months Ended		For the Six Months Ended
	April 2, 2010	April 3, 2009	April 2, 2010	April 3, 2009
Shares used to calculate EPS:
Weighted average shares outstanding (denominator used to compute basic EPS)	123,911	122,605	123,771	122,414
Effect of stock options and restricted stock	1,654	1,753	1,670	1,757
Denominator used to compute diluted EPS	125,565	124,358	125,441	124,171
Antidilutive stock options	2,887.7	2,309.7	2,887.7	2,309.7
Shares of common stock issued from the exercise of stock options and the release of restricted stock	426.1	416.8	697.7	807.3

Accounting for and Disclosure of Guarantees and Contingencies

Please refer to Note 10 — Commitments and Contingencies, and Derivative Financial Instruments of Notes to Consolidated Financial Statements beginning on page F-24 of our 2009 Form 10-K for a discussion of our various commitments and contingencies.

Please refer to Note 11 — Contractual Guarantees, Litigation, Investigations, and Insurance of Notes to Consolidated Financial Statements beginning on page F-25 of our 2009 Form 10-K for a discussion of the Company’s contractual guarantees and a description of the various types of litigation in which we’re involved.

13

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

The purpose of this Management’s Discussion and Analysis (“MD&A”) is to provide a narrative analysis explaining the reasons for material changes in the Company’s (i) financial condition since the most recent fiscal year-end, and (ii) results of operations during the current fiscal period(s) as compared to the corresponding period(s) of the preceding fiscal year. In order to better understand such changes, readers of this MD&A should also read:

• The discussion of the critical and significant accounting policies used by the Company in preparing its consolidated financial statements (the most current discussion of our critical accounting policies appears on pages 33 through 36 of our 2009 Annual Report on Form 10-K (the “2009 Form 10-K”), and the most current discussion of our significant accounting policies appears on pages F-7 through F-13 of our 2009 Form 10-K), as well as the discussion of new accounting standards included in the Notes to Consolidated Financial Statements of this Form 10-Q;

• The Company’s fiscal 2009 audited consolidated financial statements and notes thereto included in its 2009 Form 10-K (beginning on page F-1 thereto); and

• Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2009 Form 10-K (beginning on page 33 thereto).

In addition to historical information, this MD&A may contain forward-looking statements that are not based on historical fact. When used herein, words such as “expects”, “anticipates”, “believes”, “seeks”, “estimates”, “plans”, “intends”, and similar words identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Although such statements are based on management’s current estimates and expectations, and currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause our actual results to differ materially from what may be inferred from the forward-looking statements. Some of the factors that could cause or contribute to such differences are listed and discussed in Item 1A—Risk Factors, included in our 2009 Form 10-K (beginning on page 18 thereto). We undertake no obligation to release publicly any revisions or updates to any forward-looking statements. We encourage you to read carefully the risk factors described in other documents we file from time to time with the United States Securities and Exchange Commission.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Results of Operations

In order to better understand the Company’s results of operations for the second quarter of fiscal 2010 (i.e., the current fiscal quarter) and the recent trends in our business, we present the following tables which compare our operating results for the current fiscal quarter to the first quarter of fiscal 2010 (i.e., the immediately preceding fiscal quarter) and the second quarter of fiscal 2009 (dollars in thousands, except per share information):

	Second Quarter FY 2010			First Quarter FY 2010			Second Quarter FY 2009
Revenues	$	2,586,974		$	2,477,785		$	2,975,452
Direct costs of contracts		(2,223,793	)		(2,128,576	)		(2,571,828	)
SG&A Expenses		(241,177	)		(235,728	)		(232,936	)
Operating profit	$	122,004		$	113,481		$	170,688
Net earnings	$	77,500		$	72,437		$	109,287
Earnings per share (diluted)	$	0.62		$	0.58		$	0.88
Direct costs of contracts as a percentage of revenues		86.0	%		85.9	%		86.4	%

Other Comparisons:

	Second Quarter of FY 2010 as Compared to
	First Quarter FY 2010		Second Quarter FY 2009
Percentage change in revenues	4.4	%	(13.1	%)
Percentage change in SG&A expenses	2.3	%	3.5	%
Percentage change in operating profit	7.5	%	(28.5	%)
Percentage change in net earnings	7.0	%	(29.1	%)

Net earnings for the second quarter of fiscal 2010 ended April 2, 2010 totaled $77.5 million compared to $109.3 million for the second quarter of fiscal 2009 ended April 3, 2009. Net earnings for the six months ended April 2, 2010 totaled $149.9 million compared to $225.6 million for the comparable period last year. In general, year-over-year (fiscal 2010 as compared to fiscal 2009) comparisons of net earnings, as well as most other elements of our results of operations, will continue to show the effects on our business of the global recession which began in 2007. Because our business tends to lag the general economy, our results of operations usually do not reflect the full effects of a recession, nor any recovery, until several or more fiscal quarters later.

Comparing the Company’s operating results for the second quarter of fiscal 2010 to the immediately preceding fiscal quarter, we experienced a 7.5% and 7.0% improvement in both operating profit and net earnings, respectively. The improvement in the Company’s results of operations during the current fiscal quarter as compared to the immediately preceding fiscal quarter was due primarily to an increase in project services revenues combined with continuing control over our selling, general, and administrative expenses.

During fiscal 2009 and continuing into fiscal 2010, we took certain actions which, we believe, will help to mitigate the effects of the recession. In particular, in the first quarter of fiscal 2010 the Company ceased using one of its offices located in Houston, Texas, and entered into a sublease for the entire property. Accordingly, included in net earnings for the six months ended April 2, 2010 is an after-tax charge of $5.8 million, or $0.04 per diluted share, relating to this real estate transaction. Partially offsetting the benefits of this restructuring charge during the second quarter of fiscal 2010 were the additional selling, general, and administrative expenses relating to our recent acquisitions as well as the amortization expense associated with those intangible assets acquired in connection with such acquisitions.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

We believe we are well positioned to weather the current recessionary business environment, but we can provide no assurance that we will be able to do so. The Company maintains its competitive cost posture by driving down costs and maintaining long-term relationships with core clients such as the U.S. federal and other national governments, and large, multinational companies. We also continued to monitor new project opportunities arising from the American Recovery and Reinvestment Act of 2009 (although the timing, size, and scope of any such new work cannot be presently predicted).

We continue to look for strategic acquisitions that expand our markets and geographic reach. Geographies where the Company sees opportunities include the Middle East, India, and China. Markets where the Company sees opportunities include aerospace and defense; water and wastewater; upstream oil and gas; power; and minerals. Our cash position allows us to execute our acquisition strategy.

Total revenues for the second quarter of fiscal 2010 decreased by $388.5 million, or 13.1%, to $2.6 billion compared to $3.0 billion for the second quarter of fiscal 2009. Total revenues for the six months ended April 2, 2010 decreased by $1.1 billion, or 18.4%, to $5.1 billion compared to $6.2 billion for the corresponding period last year.

The following table sets forth our revenues by the various types of services we provide for the three and six months ended April 2, 2010 and April 3, 2009 (in thousands):

	For the Three Months Ended				For the Six Months Ended
	April 2, 2010		April 3, 2009		April 2, 2010		April 3, 2009
Project Services	$	1,110,065	$	1,171,635	$	2,123,020	$	2,477,660
Construction		986,581		1,310,142		1,956,460		2,668,031
Operations and Maintenance (“O&M”)		255,834		273,215		543,516		619,737
Process, Scientific and Systems Consulting		234,494		220,460		441,763		442,677
	$	2,586,974	$	2,975,452	$	5,064,759	$	6,208,105

As shown above, revenues for both the three and six months ended April 2, 2010 among the types of services we provide were generally lower as compared to the corresponding periods last year, with revenues from construction services posting the largest declines.

The following table sets forth our revenues by the industry groups and markets in which our clients operate for the three and six months ended April 2, 2010 and April 3, 2009 (in thousands):

	For the Three Months Ended				For the Six Months Ended
	April 2, 2010		April 3, 2009		April 2, 2010		April 3, 2009
Energy & Refining - Downstream	$	825,991	$	1,110,046	$	1,650,055	$	2,282,931
National Government Programs		613,264		521,220		1,138,117		1,052,643
Chemicals and Polymers		314,349		291,886		627,584		629,334
Oil & Gas - Upstream		123,739		245,417		245,682		560,705
Infrastructure		240,119		239,095		456,525		490,813
Buildings		221,389		210,536		413,951		413,492
Pharmaceuticals and Biotechnology		154,251		203,848		351,335		454,839
Industrial and Other		93,872		153,404		181,510		323,348
	$	2,586,974	$	2,975,452	$	5,064,759	$	6,208,105

Amounts related to the Company’s buildings work for the U.S. Federal Government have been reclassified from the National Government Programs market into the Buildings market. Prior period information has been reclassified to conform to this new presentation.

As shown above, revenues for both the three and six months ended April 2, 2010 from projects for clients operating in many of the markets and industry groups we serve were generally lower as compared to the corresponding periods last year, with revenues from clients operating in the energy and refining (downstream) and oil and gas (upstream) markets posting the largest declines.

We believe these declines in revenues are attributable to the continuing effects of the current recession combined with the routine completion and normal winding-down of projects. Offsetting these declines in part are increased revenues from projects for our national government clients.

Direct costs of contracts for the three months ended April 2, 2010 decreased $348.0 million, or 13.5%, to $2.2 billion as compared to $2.6 billion for the corresponding period

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

last year. Direct costs of contracts for the six months ended April 2, 2010 decreased $1.0 billion, or 18.9%, to $4.4 billion as compared to $5.4 billion for the corresponding period last year. The level of direct costs of contracts may fluctuate between reporting periods due to a variety of factors including the amount of pass-through costs we incur during a period. On those projects where we are responsible for subcontract labor or third-party materials and equipment, we reflect the amounts of such items in both revenues and costs (and we refer to such items as “pass-through costs”). On other projects, where the client elects to pay for such items directly and we have no associated responsibility for such items, these amounts are not considered pass-through costs and are, therefore, not reflected in either revenues or costs. To the extent that we incur a significant amount of pass-through costs in a period, our direct cost of contracts are likely to increase as well.

For the three and six months ended April 2, 2010, pass-through costs decreased $439.2 million and $910.1 million, respectively, as compared to the corresponding periods last year. In general, pass-through costs are more significant on projects that have a higher content of field services activities. Pass-through costs are generally incurred at a specific point in the lifecycle of a project and are highly dependent on the needs of our individual clients and the nature of the clients’ projects. However, because we have hundreds of projects which start at various times within a fiscal year, the effect of pass-through costs on the level of direct costs of contracts can vary between fiscal years without there being a fundamental or significant change to the underlying business.

As a percentage of revenues, direct costs of contracts for the three and six months ended April 2, 2010 was 86.0% and 85.9%, respectively. This compares to 86.4% and 86.5%, respectively, for the three and six months ended April 3, 2009. The relationship between direct costs of contracts and revenues will fluctuate between reporting periods depending on a variety of factors including the mix of business during the reporting periods being compared as well as the level of margins earned from the various types of services provided. Generally speaking, the more procurement we do on behalf of our clients (i.e., where we purchase equipment and materials for use on projects, and/or procure subcontracts in connection with projects) and the more field services revenues we have relative to technical, professional services revenues, the higher the direct cost of contracts percentage will be. Because revenues from pass-through costs typically have lower margin rates associated with them, it is not unusual for us to experience an increase or decrease in such revenues without experiencing a corresponding increase or decrease in our gross margins and operating profit. The decrease in the direct cost of contracts percentage for the three and six months ended April 2, 2010 as compared to the corresponding periods last year were due primarily to a combination of lower construction services revenue relative to project services, combined with better project performance.

Selling, general and administrative (“SG&A”) expenses for the three months ended April 2, 2010 increased $8.2 million, or 3.5%, to $241.2 million compared to $232.9 million for the three months ended April 3, 2009. For the six months ended April 2, 2010, SG&A expenses decreased by $12.4 million, or 2.5%, to $476.9 million compared to $489.3 million for the six months ended April 3, 2009.

Included in SG&A expenses in the current fiscal year are the SG&A expenses of our recent acquisitions as well as the amortization expense associated with the acquired intangible assets. In addition, and in response to the current business environment, the Company ceased using one of its offices located in Houston, Texas, and entered into a sublease for the entire property. Included in SG&A expenses for the six months ended April 2, 2010 was a charge of $11.4 million relating to the Houston property.

Interest income for the three and six months ended April 2, 2010 decreased $1.8 million and $5.6 million, respectively as compared to the corresponding periods last year. The

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

decrease in interest income was due primarily to lower rates of interest earned during the current fiscal quarter as compared to last year.

Backlog Information

We include in backlog the total dollar amount of revenues we expect to record in the future as a result of performing work under contracts that have been awarded to us. Because of the nature, size, expected duration, funding commitments, and the scope of services required by our contracts, the timing of when backlog will be recognized as revenues can vary greatly between individual contracts. Our policy with respect to O&M contracts, however, is to include in backlog the amount of revenues we expect to receive for one succeeding year, regardless of the remaining life of the contract. For national government programs (other than national government O&M contracts), our policy is to include in backlog the full contract award, whether funded or unfunded, and exclude option periods.

In accordance with industry practice, substantially all of our contracts are subject to cancellation or termination at the option of the client. In a situation where a client terminates a contract, we typically are entitled to receive payment for work performed up to the date of termination and, in certain instances, we may be entitled to allowable termination and cancellation costs. While management uses all information available to it to determine backlog, our backlog at any given time is subject to changes in the scope of services to be provided as well as increases or decreases in costs relating to the contracts included therein.

Because certain contracts (for example, contracts relating to large engineering, procurement, and construction projects as well as national government programs) can cause large increases to backlog in the fiscal period in which we recognize the award, and because many of our contracts require us to provide services that span over a number of fiscal quarters (and sometimes over fiscal years), we evaluate our backlog on a year-over-year basis, rather than on a sequential, quarter-over-quarter basis.

The following table summarizes our backlog at April 2, 2010 and April 3, 2009 (in millions):

	2010		2009
Technical professional services	$	8,299.3	$	8,116.8
Field services		6,354.3		8,515.1
Total	$	14,653.6	$	16,631.9

Our backlog decreased $2.0 billion, or 11.9%, to $14.7 billion at April 2, 2010 from $16.6 billion at April 3, 2009. Backlog at April 2, 2010 includes new awards from our public sector clients.

Liquidity and Capital Resources

At April 2, 2010, our principal sources of liquidity consisted of $839.1 million of cash and cash equivalents, and $256.5 million of available borrowing capacity under our $290.0 million, long-term, unsecured revolving credit facility. We finance as much of our operations and growth as possible through cash generated by our operations.

In addition to our $290.0 million revolving credit facility, we have also entered into a short-term credit facility with a bank in the U.S. We entered into the facility in connection with our acquisition of a one-third interest in AWE Management Ltd. (“AWE”). Approximately $95.2 million was outstanding under this facility at April 2, 2010.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

During the first six months of fiscal 2010, our cash and cash equivalents decreased by $194.6 million to $839.1 million at April 2, 2010. This compares to a net increase in cash and cash equivalents of $168.2 million, to $772.7 million, during the corresponding period last year. During the six months ended April 2, 2010, we used $406.1 million of cash and cash equivalents for investing activities. This cash outflow was offset in part by net cash inflows of $117.2 million from operating activities, $92.8 million from financing activities, and $1.6 million from the effects of exchange rates.

Our operations provided net cash of $117.2 million during the six months ended April 2, 2010. This compares to net cash inflows of $201.1 million for the corresponding period last year. The $84.0 million decrease in cash provided by operations for the six months ended April 2, 2010 as compared to the corresponding period last year was due primarily to the following factors:

• a $75.7 million decrease in net earnings; and,

• a $22.8 million decrease relating to changes in our working capital accounts (discussed below).

These decreases in cash flows from operations were offset in part by the following:

• a $7.3 million change relating to the amortization of intangibles; and,

• a $5.0 million change relating to deferred income taxes.

With respect to the $22.8 million decrease in cash flows relating to changes in our working capital accounts, there was no unusual activity occurring in these accounts during the six months ended April 2, 2010.

Because such a high percentage of our revenues are earned on cost-plus type contracts, and due to the significance of revenues relating to pass-through costs, most of the costs we incur are included in invoices we send to clients. Although we continually monitor our accounts receivable, we manage the operating cash flows of the Company by managing the working capital accounts in total, rather than by the individual elements. The primary elements of the Company’s working capital accounts are accounts receivable, accounts payable, and billings in excess of cost. Accounts payable consists of obligations to third parties relating primarily to costs incurred for projects which are generally billable to clients. Accounts receivable consist of billings to our clients — a substantial portion of which is for project-related costs. Billings in excess of cost consist of billings to and payments from our clients for costs yet to be incurred.

This relationship between revenues and costs, and between receivables and payables is unique for our industry, and facilitates review at the total working capital level. The $22.8 million decrease in cash flows relating to changes in our working capital accounts was due simply to the timing of cash receipts and payments within our working capital accounts and is not indicative of any known trend or fundamental change to the underlying business.

We used $406.1 million of cash and cash equivalents for investing activities during the six months ended April 2, 2010 as compared to $17.1 million during the corresponding period last year. The $388.9 million increase in cash used for investing activities for the six months ended April 2, 2010 as compared to the corresponding period last year was due primarily to acquisitions of businesses and changes in investments.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

During the six months ended April 2, 2010 we acquired JJG, TYBRIN and completed our acquisition of AWE.

Our financing activities resulted in net cash inflows of $92.8 million during the six months ended April 2, 2010. This compares to net cash outflows of $0.3 million during the corresponding period last year. The $93.1 million net increase in cash flows from financing activities during the six months ended April 2, 2010 as compared to the corresponding period last year was due primarily to a $79.0 million increase in short-term borrowings.

We believe we have adequate liquidity and capital resources to fund our operations, support our acquisition strategy, and service our debt for the next twelve months. We had $839.1 million in cash and cash equivalents at April 2, 2010, compared to $1.0 billion at October 2, 2009. Our consolidated working capital position at April 2, 2010 was $1.4 billion, a decrease of $164.9 million from October 2, 2009. We have a long-term, unsecured, revolving credit facility providing up to $290.0 million of debt capacity, under which approximately $33.5 million was utilized at April 2, 2010 in the form of direct borrowings and letters of credit. While our access to capital has not been severely affected by the credit crisis currently impacting global markets, we believe the full effect of the crisis may increase our borrowing costs in the future. We believe that the capacity, terms and conditions of our long-term revolving credit facility, combined with other committed and uncommitted facilities we have in place, are adequate for our working capital and general business requirements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We do not enter into derivative financial instruments for trading, speculation or other purposes that would expose us to market risk. As more fully discussed below and in Item 1A—Risk Factors of our 2009 Form 10-K (beginning on page 18 thereto), our results of operations are exposed to risks associated with fluctuations in interest rates and currency exchange rates.

Interest Rate Risk

Our only committed source for long-term credit is a $290.0 million, long-term, unsecured revolving credit facility. The total amount outstanding under this facility at April 2, 2010 was $0.6 million. This agreement expires in May 2012, and provides for both fixed-rate and variable-rate borrowings. Our objectives in managing our interest rate risk are to limit the impact of interest rate changes on earnings and cash flows, and to lower our overall borrowing costs. To achieve these objectives, we continuously monitor changes in interest rates, and use cash provided from operations to re-pay our borrowings as quickly as possible. Furthermore, the Company can use a combination of both fixed rate and variable rate debt to manage our exposure to interest rate risk.

Foreign Currency Risk

In situations where our operations incur contract costs in currencies other than their functional currency, we attempt to have a portion of the related contract revenues denominated in the same currencies as the costs. In those situations where revenues and costs are transacted in different currencies, we sometimes enter into foreign exchange contracts in order to limit our exposure to fluctuating foreign currencies. The Company does not currently have exchange rate sensitive instruments that would have a material effect on our consolidated financial statements or results of operations.

Item 4. Controls and Procedures.

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as defined by Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of April 2, 2010, the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the Evaluation Date.

There were no changes in the Company’s internal control over financial reporting during the quarter ended April 2, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

In the normal course of business, we are subject to certain contractual guarantees and litigation. The guarantees to which we are a party generally relate to project schedules and plant performance. Most of the litigation involves us as a defendant in workers’ compensation; personal injury; environmental; employment/labor; professional liability; and other similar lawsuits.

We maintain insurance coverage for various aspects of our business and operations. We have elected, however, to retain a portion of losses that occur through the use of various deductibles, limits, and retentions under our insurance programs. This situation may subject us to some future liability for which we are only partially insured, or completely uninsured. We intend to mitigate any such future liability by continuing to exercise prudent business judgment in negotiating the terms and conditions of our contracts.

Additionally, as a contractor providing services to agencies of the United States federal government, we are subject to many levels of audits, investigations and claims by, or on behalf of, the U.S. federal government with respect to our contract performance, pricing, costs, cost allocations, and procurement practices. Furthermore, our income, franchise, and similar tax returns and filings are also subject to audit and investigation by the Internal Revenue Service, most states within the United States as well as by various government agencies representing jurisdictions outside the United States.

In accordance with Accounting Standards Codification 450—Contingencies and Accounting Standards Codification 740—Income Taxes, we record in our Consolidated Balance Sheets amounts representing our estimated liability relating to such claims, guarantees, litigation, and audits and investigations. We include any adjustments to such reserves in our consolidated results of operations.

Management believes, after consultation with counsel, that such guarantees, litigation, United States Government contract-related audits, investigations and claims, and income tax audits and investigations should not have any material adverse effect on our consolidated financial statements.

In addition to the matters described above, we are involved in a dispute with a client relating to a large waste incineration project in Europe. The contract was entered into by one of our subsidiaries more than ten years ago prior to our acquisition of that subsidiary. The dispute involves proper waste feed; content of residues; final acceptance of the plant; and costs of operation and maintenance of the plant. We have initiated litigation against the client and are seeking in excess of €40.0 million (approximately $54.1 million at April 2, 2010) in damages. The client has filed a counterclaim against us, which we believe is without merit. We believe our claims are valid and enforceable and that we will be ultimately successful in obtaining a favorable judgment.

On August 1, 2007 the I-35W bridge in Minneapolis, Minnesota suffered a tragic collapse. The bridge was designed and built in the early 1960’s. Sverdrup & Parcel and Associates, Inc. (“Sverdrup & Parcel”) provided design services to the Minnesota Department of Transportation (“MnDOT”) on the bridge. Sverdrup & Parcel was a predecessor company to Sverdrup Corporation, a company acquired by Jacobs in 1999. Several lawsuits have been filed against a consultant who had been providing engineering analyses of the bridge prior to its collapse, and against a contractor who was providing maintenance and construction work on the bridge at

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

the time of its collapse. No lawsuits have been filed directly against the Company by any of the primary plaintiffs. The consultant and the contractor have filed suit against the Company claiming that the Company was liable for negligent design services by Sverdrup & Parcel, and against MnDOT claiming that MnDOT had an obligation to inspect, maintain and repair the bridge and that it failed to do so. MnDOT has filed a suit against the Company claiming that it is entitled to be indemnified for any and all amounts that it pays out under its Victims Compensation Fund. We understand that the contractor has settled all of the plaintiffs’ claims against it. The contractor’s suit against the Company is in the process of being dismissed without any compensation being paid by the Company. The Company’s motions to dismiss the remaining claims against it by the consultant and MnDOT based on the State Statute of Repose were denied. The Company has filed an appeal. The Company does not expect this matter to have any material adverse effect on its consolidated financial statements.

Item 1A. Risk Factors.

Please refer to Item 1A—Risk Factors on pages 18 through 29 of our 2009 Form 10-K, which is incorporated herein by reference. There have been no material changes from those risk factors previously disclosed in our 2009 Form 10-K.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Item 5. Other Information

Submission of Matters to a Vote of Security Holders

The Company’s 2010 Annual Meeting of Shareholders was held at its headquarters on January 28, 2010, as previously announced in its Notice of Annual Meeting of Shareholders and Proxy Statement dated December 17, 2009, copies of which were filed with the Securities and Exchange Commission pursuant to Regulation 14A.

There were two matters voted upon by the shareholders at the Annual Meeting: (i) the election of Robert C. Davidson, Jr., Edward V. Fritzky, and Benjamin F. Montoya, as directors to hold office until the 2013 annual meeting, and the election of Peter J. Robertson as a director to hold office until the 2012 annual meeting, and (ii) ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending October 1, 2010.

The results of the shareholder voting were as follows (all shares voted were voted by proxy):

	Votes For	Votes Against	Abstentions	Broker Non-votes
1.   Election of Directors:
Robert C. Davidson, Jr.	81,787,281	1,543,923	111,214	15,022,903
Edward V. Fritzky	81,908,650	1,427,722	106,046	15,022,903
Benjamin F. Montoya	81,668,851	1,659,778	113,789	15,022,903
Peter J. Robertson	79,741,798	3,589,820	110,890	15,022,813
2.   Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm.	97,281,977	1,036,004	146,977	363

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Item 6. Exhibits

(a) Exhibits

10.1 —	Jacobs Engineering Group Inc. 2005 Executive Deferral Plan
31.1 —	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 —	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 —	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 —	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

JACOBS ENGINEERING GROUP INC.

By: /s/ John W. Prosser, Jr.

John W. Prosser, Jr.

Executive Vice President

Finance and Administration

and Treasurer

(Principal Financial Officer)

Date: April 29, 2010

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EX-10.1

Exhibit 10.1

2005 Executive Deferral Plan

Master Plan Document

2005 Executive Deferral Plan

Master Plan Document

2005 Executive Deferral Plan

Master Plan Document

TABLE OF CONTENTS

	Page
Introduction	1
ARTICLE 1 Definitions	1
ARTICLE 2 Selection, Enrollment, Eligibility	6
2.1 Selection by Committee	6
2.2 Enrollment Requirements	6
2.3 Eligibility; Commencement of Participation	6
2.4 Participants Who Become Ineligible	6
ARTICLE 3 Deferral Commitments/Crediting/Taxes	7
3.1 Deferral Amounts	7
3.2 Timing of Deferral Elections	7
3.3 Withholding of Annual Deferral Amounts	8
3.4 Vesting	8
3.5 Crediting/Debiting of Account Balances	8
3.6 FICA and Other Taxes	9
3.7 Distributions	9
ARTICLE 4 Short-Term Payout; Unforeseeable Financial Emergencies	10
4.1 Short-Term Payout	10
4.2 Other Benefits Take Precedence Over Short-Term Payout	10
4.3 Unforeseeable Financial Emergencies	10
ARTICLE 5 Retirement Benefit	11
5.1 Retirement Benefit	11
5.2 Payment of Retirement Benefit	11
5.3 Death Prior to Completion of Retirement Benefit	11
5.4 Special Election Rule for 2005	11
ARTICLE 6 Pre-Retirement Survivor Benefit	12
6.1 Pre-Retirement Survivor Benefit	12
6.2 Payment of Pre-Retirement Survivor Benefit	12
6.3 Special Election Rule for 2005	12
ARTICLE 7 Termination Benefit	13

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	Page
7.1 Termination Benefit	13
7.2 Payment of Termination Benefit	13
ARTICLE 8 Beneficiary Designation	13
8.1 Beneficiary	13
8.2 Beneficiary Designation, Change, Spousal Consent	13
8.3 Acknowledgement	13
8.4 No Beneficiary Designation	13
8.5 Doubt as to Beneficiary	14
8.6 Discharge of Obligations	14
ARTICLE 9 Leave of Absence and Rehires	14
9.1 Paid Leave of Absence	14
9.2 Unpaid Leave of Absence	14
9.3 Leave of Absence Treated as a Termination of Employment	14
9.4 Reemployment following Retirement or Termination of Employment	15
ARTICLE 10 Termination, Amendment or Modification	15
10.1 Termination	15
10.2 Amendment	15
10.3 Plan Agreement	15
10.4 Effect of Payment	16
ARTICLE 11 Administration	16
11.2 Administration Upon Change in Control	16
11.3 Agents	17
11.4 Binding Effect of Decisions	17
11.5 Indemnity of Committee	17
11.6 Missing Payees	17
11.7 Payment Delay or Acceleration	17
ARTICLE 12 Other Benefits and Agreements	17
12.1 Coordination with Other Benefits	17
ARTICLE 13 Claims Procedures	18
13.1 Presentation of Claim	18
13.2 Notification of Decision	18
13.3 Review of a Denied Claim	18

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	Page
13.4 Decision on Review	19
13.5 Legal Action	19
13.6 Payment Following Resolution of Claim	19
ARTICLE 14 Trust	19
14.1 Establishment of the Trust	19
14.2 Interrelationship of the Plan and the Trust	20
14.3 Distributions From the Trust	20
14.4 Investment of Trust Assets	20
ARTICLE 15 Miscellaneous	20
15.1 Status of Plan	20
15.2 Unsecured General Creditor	20
15.3 Employer’s Liability	20
15.4 Nonassignability	20
15.5 Not a Contract of Employment	21
15.6 Furnishing Information	21
15.7 Terms	21
15.8 Captions	21
15.9 Governing Law	21
15.10 Notice	21
15.11 Successors	21
15.12 Spouse’s Interest	22
15.13 Introduction	22
15.14 Introduction	22
15.15 Payments to Spouses	22
15.16 Distribution in the Event of Taxation	23
15.17 Payment Delays due to Employer Insolvency	23
15.18 Insurance	23
15.19 Legal Fees to Enforce Rights After Change in Control	23
15.20 Code Section 409A	24

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JACOBS ENGINEERING GROUP INC.

2005 EXECUTIVE DEFERRAL PLAN

Introduction

(a) Purpose. The purpose of this Plan is to provide specified benefits to a select group of management and highly compensated Employees and Directors who contribute materially to the continued growth, development, and future business success of Jacobs Engineering Group Inc. and its subsidiaries, if any, that sponsor this Plan. This Plan is unfunded for tax purposes and for purposes of Title I of ERISA. This Plan is a new Plan, effective as of January 1, 2005. It is intended to serve the same purpose as the Company’s Amended and Restated Executive Deferral Plan, which was frozen as of December 31, 2004, but governs compensation deferred after December 31, 2004.

(b) The American Jobs Creation Act of 2004. This Plan is substantially similar to the Company’s Amended and Restated Executive Deferral Plan in form. However, the Plan is intended to avoid any “plan failures” within the meaning of Code section 409A(a)(1). The Plan shall be interpreted and administered, to the extent possible, in accordance with this intention.

The Company, the Administrator, and the Committee reserve full discretionary authority to operate the Plan to prohibit distributions, elections, or other actions that would trigger taxation under section 409A of the Code. This authority includes, but is not limited to, the authority to stop, delay, or review elections or distribution requests.

ARTICLE 1

Definitions

For purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

1.1 “Account Balance” shall mean, at any given time, the balance in a Participant’s Deferral Account. The Account Balance shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

1.2 “Annual Bonus” shall mean a Participant’s bonus relating to services performed during any Fiscal Year, whether or not paid in such Fiscal Year, under any Employer’s annual bonus, incentive bonus and cash incentive plans.

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1.3 “Annual Deferral Amount” shall mean that portion of a Participant’s Base Annual Salary, Annual Bonus and Directors Fees that a Participant elects to have, and is, deferred in accordance with Article 3, for any one Plan Year.

1.4 “Annual Installment Method” shall be an annual installment payment over the number of years selected by the Participant in accordance with this Plan, calculated as follows: For the Plan Year in which payments begin, the Account Balance of the Participant shall be calculated as of the close of business on the last business day of the month immediately preceding the month in which payments are scheduled to begin. For subsequent Plan Years, the Account Balance of the Participant shall be calculated as of the close of business on the last business day of the preceding Plan Year. The annual installment for each Plan Year shall be calculated by multiplying this balance by a fraction, the numerator of which is the number of monthly payments to be made during the Plan Year, and the denominator of which is the remaining number of monthly payments due the Participant or Beneficiary.

By way of example, if the Participant elects a 10-year Annual Installment Method and payments begin in July 2009, the 2009 payment shall be 6/120 of the Account Balance, calculated as of June 30, 2009. In 2010, the payment shall be 12/114 of the Account Balance, calculated as of December 31, 2009. Each annual installment paid shall be divided by the number of monthly payments to be made during the year, and the resulting number shall be the monthly installment payment that shall be paid each month of the Plan Year to which such annual installment relates. Subject to the payment provisions of Section 5.2 or 6.2, as the case may be, the monthly installment payment shall be paid on the first day of the month to which it relates.

1.5 “Base Annual Salary” shall mean the annual cash compensation relating to services performed during any calendar year, whether or not paid in such calendar year, including sold vacation time and accrued vacation time paid but not taken, and excluding bonuses, commissions, overtime, fringe benefits, stock options, relocation bonus and/or expenses, incentive payments, non-monetary awards, directors fees and other fees, automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee’s gross income). Base Annual Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant’s gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in compensation only to the extent that, had there been no such plan, the amount would have been payable in cash to the Employee.

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1.6 “Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 8, that are entitled to receive benefits under this Plan upon the death of a Participant.

1.7 “Beneficiary Designation Form” shall mean the form (written or electronic) established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries.

1.8 “Board” shall mean the board of directors of the Company.

1.9 “Change in Control” shall have the same meaning as contained in the Company’s 1999 Stock Incentive Plan.

1.10 “Claimant” shall have the meaning set forth in Section 13.1.

1.11 “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.

1.12 “Committee” shall mean the committee described in Article 11.

1.13 “Company” shall mean Jacobs Engineering Group Inc. and any successor to all or substantially all of the Company’s assets or business.

1.14 “Deduction Limitation” shall mean the amount above which distributions otherwise payable to a Participant (or his or her Beneficiary) under the Plan, when combined with other compensation paid to a Participant (or his or her Beneficiary) for a taxable year, would not be deductible by the Employer by reason of the limitation imposed by Code Section 162(m). The Deduction Limitation shall be determined by the Company in good faith. Once an amount has been determined by the Company not to be deductible because of the Deduction Limitation, the Company may defer the amount that would otherwise be paid to a Participant (or his or her Beneficiary). Any amounts so deferred will remain in the Participant’s Account Balance, and shall be entitled to continued crediting and debiting of additional amounts in accordance with Section 3.4 below. The amounts so deferred and amounts credited thereon shall be distributed to the Participant or his or her Beneficiary during the first year, as determined by the Employer in good faith, in which the deductibility of such payment will not be barred by application of Section 162(m). Notwithstanding any other provision in this Plan, to the extent consistent with Section 15.20, the Deduction Limitation shall not apply to distributions that become payable after a Change in Control.

1.15 “Deferral Account” shall mean (i) the sum of all of a Participant’s Annual Deferral Amounts, plus or less, as the case may be, (ii) amounts credited or debited in accordance

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with all the applicable crediting provisions of this Plan that relate to the Participant’s Deferral Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Deferral Account.

1.16 “Director” shall mean any member of the board of directors of the Company.

1.17 “Directors Fees” shall mean the annual fees paid by the Company, including retainer fees and meetings fees, as compensation for serving on the board of directors. (IPB Comment: Please confirm that “fees” for this purpose does not include reimbursements.)

1.18 “Election Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to make an election under the Plan.

1.19 “Employee” shall mean a person who is an employee of any Employer.

1.20 “Employer(s)” shall mean the Company and/or any of its subsidiaries (now in existence or hereafter formed or acquired) unless the subsidiary has been excluded from participation in the Plan, as a sponsor by the Board.

1.21 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

1.22 “Fiscal Year” shall mean the twelve-month period ending on September 30^th of each calendar year.

1.23 “Measurement Funds” shall have the meaning set forth in Section 3.5.

1.24 “Participant” shall mean any Employee or Director (i) who is selected to participate in the Plan, (ii) who elects to participate in the Plan, (iii) who signs a Plan Agreement, an Election Form and a Beneficiary Designation Form, (iv) whose signed Plan Agreement, Election Form and Beneficiary Designation Form are accepted by the Committee, (v) who commences participation in the Plan, and (vi) whose Plan Agreement has not terminated. A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an account balance under the Plan, even if he or she has an interest in the Participant’s benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce.

1.25 “Plan” shall mean the Company’s 2005 Executive Deferral Plan, which shall be evidenced by this instrument and by each Plan Agreement, as they may be amended from time to time.

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1.26 “Plan Agreement” shall mean a written agreement, as may be amended from time to time, which is entered into by and between an Employer and a Participant. Each Plan Agreement executed by a Participant and the Participant’s Employer shall provide for the entire benefit to which such Participant is entitled under the Plan; should there be more than one Plan Agreement, the Plan Agreement bearing the latest date of acceptance by the Employer shall supersede all previous Plan Agreements in their entirety and shall govern such entitlement. The terms of any Plan Agreement may be different for any Participant, as described in Section 10.3 below.

1.27 “Plan Year” shall mean a period beginning on January 1 of a particular calendar year and continuing through December 31 of such calendar year.

1.28 “Pre-Retirement Survivor Benefit” shall mean the benefit set forth in Article 6.

1.29 “Retirement” shall mean a “separation from service,” as such term is defined in Code section 409A and guidance thereunder, (i) as an Employee after age 65, or after age 60 with at least ten years of Service; or (ii) as a Director of the Company after age 70 with at least five years of Service. If a Participant is both an Employee and a Director, a Retirement may occur only upon the separation from service from the last position held.

1.30 “Retirement Benefit” shall mean the benefit set forth in Article 5.

1.31 “Service” shall mean the period of time commencing on a Participant’s initial date of service as an Employee or Director, and ending on the date of the Participant’s Retirement, Termination of Employment, or death. In the case of a Participant who returns to service following a Termination of Employment, Service shall include both the Participant’s earlier Service and the period commencing on the Participant’s date of return and ending on the date of the Participant’s subsequent Retirement, Termination of Employment, or death.

1.32 “Short-Term Payout” shall mean the payout set forth in Section 4.1.

1.33 “Termination Benefit” shall mean the benefit set forth in Article 7.

1.34 “Termination of Employment” shall mean a “separation from service,” as such term is defined in Code section 409A and guidance thereunder, as an Employee or Director of the Company, for any reason other than Retirement, death or an authorized leave of absence. If a Participant is both an Employee and a Director, a Termination of Employment shall occur only upon the termination of the last position held.

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1.35 “Trust” shall mean one or more trusts established pursuant to that certain Master Trust Agreement, dated as of June 1, 1991 between the Company and the trustee named therein, as amended from time to time, or any successor thereto.

1.36 “Unforeseeable Financial Emergency” shall mean severe financial hardship to a Participant resulting from an illness or accident of the Participant or the Participant’s spouse or dependent (as defined in Section 152 of the Code, without regard to Sections 152(b)(1), (b)(2), and (d)(1)(B)) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, as determined in the sole discretion of the Committee.

ARTICLE 2

Selection, Enrollment, Eligibility

2.1 Selection by Committee. The Committee, in its sole discretion, shall establish eligibility requirements for participation in the Plan. Participation in the Plan shall be limited to a select group of management and highly compensated Employees of the Employers and Directors of the Company.

2.2 Enrollment Requirements. As a condition to participation, each selected Employee or Director shall complete, execute and return to the Committee a Plan Agreement, an Election Form and a Beneficiary Designation Form, all within the time period set by the Committee, in its sole discretion, for the purpose of returning documents and forms. In addition, the Committee shall establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary.

2.3 Eligibility; Commencement of Participation. A Participant shall commence participation in the Plan on the first day of the Plan Year following the date on which he or she has (i) satisfied all Enrollment Requirements and (ii) has had his or her Plan Agreement, Election Form and Beneficiary Designation Form accepted by the Committee. Notwithstanding the previous sentence, the Committee may, in its sole and absolute discretion and only to the extent consistent with Section 15.20, permit a Participant to commence participation in the Plan and defer Base Annual Salary and/or Director’s Fees (but not the Participant’s Annual Bonus) in the first pay period following his or her satisfaction of (i) and (ii) above.

2.4 Participants Who Become Ineligible. If the Committee determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the right, in its sole discretion, to prevent the Participant from making future deferral elections. However, any existing deferral elections made by the Participant will remain in effect for the remainder of the Plan Year of the Participant’s change in status, and payment of the Participant’s Account Balance will proceed as set forth elsewhere in the Plan.

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ARTICLE 3

Deferral Commitments/Crediting/Taxes

3.1 Deferral Amounts.

(a) Minimum and Maximum Deferral Commitment. For each Plan Year, a Participant may make an irrevocable election to defer, as his or her Annual Deferral Amount, an amount of Base Annual Salary, Annual Bonus and/or Director’s Fees that may not be less than the minimum Annual Deferral Amount, nor more than the maximum Annual Deferral Amount, as announced by the Committee prior to the beginning of the Plan Year and set forth in the Election Form for the Plan Year.

(b) Short Plan Year. If a Participant first becomes a Participant after the first day of a Plan Year, the minimum Base Annual Salary deferral shall be the minimum Annual Deferral Amount set forth in subsection (a), unless otherwise determined by the Committee.

(c) Other.

(i) Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, the maximum Annual Deferral Amount, with respect to Base Annual Salary, Annual Bonus and Directors Fees shall be limited to the amount of compensation not yet earned by the Participant as of the date the Participant’s Plan Agreement and Election Form is accepted by the Committee.

(ii) Notwithstanding any other provision in this Plan, all deferrals shall be a fixed percentage of the applicable Base Annual Salary, Annual Bonus, or Directors Fees.

3.2 Timing of Deferral Elections. In general, Participants may elect, no later than the end of each Plan Year (or such earlier deadline as may be set forth by the Committee), to defer Base Annual Salary and Directors Fees earned in the next Plan Year, and Annual Bonus earned during the Fiscal Year which ends in the next Plan Year. However, newly eligible Participants may make their initial deferral elections as set forth in Article 2.

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3.3 Withholding of Annual Deferral Amounts. For each Plan Year, the Base Annual Salary portion of the Annual Deferral Amount shall be withheld from Base Annual Salary in the manner determined by the Committee. The Annual Bonus and/or Directors Fees portion of the Annual Deferral Amount shall be withheld at the time the Annual Bonus or Directors Fees are or otherwise would be paid to the Participant.

3.4 Vesting. A Participant shall at all times be 100% vested in his or her Deferral Account.

3.5 Crediting/Debiting of Account Balances. In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee, in its sole discretion, deferral amounts shall be credited or debited to a Participant’s Account Balance in accordance with the following rules:

(a) Election of Measurement Funds. At the time an Employee becomes a Participant in the Plan, he or she may designate one or more Measurement Funds which shall be used to determine what additional amounts are to be credited or debited, as the case may be, to his or her Account Balance. Such designations shall apply to the Annual Deferral Amount, as such amounts are deferred by the Participant, and shall remain in force until changed by the Participant in accordance with the policies and procedures as set forth by the Committee, from time to time, which policies and procedures may be changed, modified, and/or amended by the Committee, without prior notice, at the Committee’s sole discretion. Until changed by the Committee: (i) Measurement Fund allocation designations must be made in whole percentage points of 1%, or multiples thereof, not to exceed 100%; (ii) a Participant may change his or Measurement Fund allocation elections on a daily basis, and (iii) a change in Measurement Fund allocations will take effect on the next business day following the election. Notice of any change in Measurement Fund elections must be made to the Committee, or its designee, in a form acceptable to it as determined by it in its sole discretion. If a Participant fails to designate a Measurement Fund with respect to all or a portion of his or her Account Balance, such amounts shall be deemed invested in the default Measurement Fund designated by the Committee, which may be changed by the Committee from time to time without notice to Participants.

(b) Measurement Funds. A Participant may elect one or more measurement funds (the “Measurement Funds”) from among those selected by the Committee for the purpose of crediting or debiting additional amounts to his or her Account Balance. As necessary, the Committee may, in its sole discretion, discontinue, substitute or add Measurement Funds. In selecting the Measurement Funds that are available from time to time, neither the Committee nor any Employer shall be liable to any Participant for such selection or adding, deleting or continuing any available Measurement Fund.

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(c) Crediting or Debiting Method. The performance of each elected Measurement Fund (either positive or negative) will be determined by the Committee, in its sole discretion, based on the performance of the Measurement Funds themselves. A Participant’s Account Balance shall be credited or debited on a daily basis based on the performance of each Measurement Fund selected by the Participant, as determined by the Committee in its sole discretion, as though (i) a Participant’s Account Balance as of the close of business on each date were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such date, at the closing price on such date; (ii) the portion of the Annual Deferral Amount, if any, that was actually deferred on that date were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such date; and (iii) any distribution made to a Participant on that date ceased being invested in the Measurement Fund(s), in the percentages applicable to such date, at the closing price on such date.

(d) No Actual Investment. Notwithstanding any other provision in this Plan, the Measurement Funds are to be used for measurement purposes only, and a Participant’s election of any such Measurement Fund, the allocation to his or her Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Measurement Fund. In the event that the Company or the Trustee (as that term is defined in the Trust), in its own discretion, decides to invest funds in any or all of the Measurement Funds, no Participant shall have any rights in or to such investments themselves. Without limiting the foregoing, a Participant’s Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company or the Trust; the Participant shall at all times remain an unsecured creditor of the Company.

3.6 FICA and Other Taxes. For each Plan Year in which an Annual Deferral Amount is being withheld from a Participant, the Participant’s Employer(s) shall withhold from that portion of the Participant’s Base Annual Salary and Bonus that is not being deferred, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes on such Annual Deferral Amount. If the amount of Base Annual Salary and Bonus that is not being deferred is insufficient to cover these amounts, the Committee may reduce the Annual Deferral Amount or withhold from other payments made to the Participant in order to comply with this Section.

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3.7 Distributions. The Participant’s Employer(s), or the trustee of the Trust, shall withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes (domestic or foreign) required to be withheld by the Employer(s), or the trustee of the Trust, in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Employer(s) and the trustee of the Trust.

ARTICLE 4

Short-Term Payout; Unforeseeable Financial Emergencies

4.1 Short-Term Payout. In connection with each election to defer an Annual Deferral Amount, a Participant may elect to receive a future “Short-Term Payout” from the Plan with respect to such Annual Deferral Amount. An election made pursuant to this Section shall be irrevocable. Subject to the Deduction Limitation, the Short-Term Payout shall be a lump sum payment in an amount that is equal to either (i) a percentage of some or all of the Annual Deferral Amount, as elected at the time of the deferral, or (ii) a stated dollar amount, as elected at the time of the deferral, not to exceed the Annual Deferral Amount, plus, in either case, amounts credited or debited in the manner provided in Section 3.5 above on that elected amount, determined at the time that the Short-Term Payout is paid. Subject to the Deduction Limitation and the other terms and conditions of this Plan, each Short-Term Payout elected shall be paid out on the January 15^th immediately after the last day of any Plan Year designated by the Participant that is at least three Plan Years after the Plan Year in which the Annual Deferral Amount is actually deferred. By way of example, if a three year Short-Term Payout is elected for Annual Deferral Amounts that are deferred in the Plan Year commencing January 1, 2002, the three year Short-Term Payout would be paid on January 15, 2006.

4.2 Other Benefits Take Precedence Over Short-Term Payout. Should an event occur that triggers a benefit under Article 5, 6 or 7, any Annual Deferral Amount, plus amounts credited or debited thereon, that is subject to a Short-Term Payout election under Section 4.1 shall not be paid in accordance with Section 4.1 but shall be paid in accordance with the other applicable Article.

4.3 Unforeseeable Financial Emergencies. If the Participant experiences an Unforeseeable Financial Emergency the Participant may petition the Committee to (i) cancel any deferrals required to be made by a Participant and, if such cancellation is insufficient to satisfy the Unforeseeable Financial Emergency, (ii) receive a partial or full payout from the Plan. The payout shall not exceed the lesser of the Participant’s Account Balance, calculated as if such Participant were receiving a Termination Benefit, or the amount reasonably necessary to satisfy the Unforeseeable Financial Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking

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into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). If the Committee determines that an Unforeseeable Financial Emergency exists, cancellation shall take effect upon the date of such determination, and any payout shall be made thirty (30) days after such date. The payment of any amount under this Section 4.3 shall not be subject to the Deduction Limitation.

ARTICLE 5

Retirement Benefit

5.1 Retirement Benefit. Subject to the Deduction Limitation, a Participant who Retires shall receive, as a Retirement Benefit, his or her Account Balance.

5.2 Payment of Retirement Benefit. A Participant, in connection with his or her annual deferral election, shall elect on an Election Form to receive the Retirement Benefit attributable to the election in a lump sum or pursuant to an Annual Installment Method of up to 15 years. A Participant may choose different forms of payment for Annual Deferral Amounts attributable to different Plan Years. The Participant may change his or her payment election with respect to Annual Deferral Amounts attributable to any Plan Year to an allowable alternative payout period by submitting a new Election Form to the Committee, provided that any such Election Form is submitted at least 1 year prior to the Participant’s Retirement and delays the Participant’s initial payment by a period of at least five years. For purposes of such election changes, the right to a series of installment payments shall be treated as the right to a single payment. If a Participant does not make any election with respect to the payment of Annual Deferral Amounts attributable to a given Plan Year, then such amounts shall be payable in a lump sum. Except as otherwise provided pursuant to a subsequent deferral election described above, the lump sum payment shall be made, or installment payments shall commence thirty days after the date which is six months after the Participant’s Retirement. Any payment made shall be subject to the Deduction Limitation.

5.3 Death Prior to Completion of Retirement Benefit. If a Participant dies after Retirement but before the Retirement Benefit is paid in full, the Participant’s unpaid Retirement Benefit payments shall continue and shall be paid to the Participant’s Beneficiary over the remaining number of years and in the same amounts as such payments would have been made to the Participant had the Participant remained alive.

5.4 Special Election Rule for 2005. Notwithstanding the provisions of Section 5.2, on or before December 31, 2005, a Participant may elect to change the form of payment of the Retirement Benefit for Annual Deferral Amounts attributable to 2005. The Participant

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may elect a form of payment from any of the options permitted in Section 5.2. The restrictions set forth in Section 5.2 (i.e., that such an election must be made at least 1 year prior to Retirement and must delay the date of the initial payment by at least five years) will not apply to an election made pursuant to this Section.

ARTICLE 6

Pre-Retirement Survivor Benefit

6.1 Pre-Retirement Survivor Benefit. Subject to the Deduction Limitation, the Participant’s Beneficiary shall receive a Pre-Retirement Survivor Benefit equal to the Participant’s Account Balance if the Participant dies while in the employ of any Employer.

6.2 Payment of Pre-Retirement Survivor Benefit. A Participant, in connection with his or her annual deferral election, shall elect on an Election Form whether the Pre-Retirement Survivor Benefit attributable to the election shall be received by his or her Beneficiary in a lump sum or pursuant to an Annual Installment Method of up to 15 years. The form of payment for the Pre-Retirement Survivor Benefit does not have to match the form of payment for the Retirement Benefit. A Participant may choose different forms of payment for Annual Deferral Amounts attributable to different Plan Years. The Participant may change his or her payment election with respect to Annual Deferral Amounts attributable to any Plan Year to an allowable alternative payout period by submitting a new Election Form to the Committee, provided that any such Election Form is submitted at least 1 year prior to the Participant’s death and does not accelerate the initial payment date. For purposes of such election changes, the right to a series of installment payments shall be treated as the right to a single payment. If a Participant does not make any election with respect to the payment of Annual Deferral Amounts attributable to a given Plan Year, then such amounts shall be paid in a lump sum. The lump sum payment shall be made, or installment payments shall commence, thirty days after the date of the Participant’s death. Any payment made shall be subject to the Deduction Limitation.

6.3 Special Election Rule for 2005. Notwithstanding the provisions of Section 6.2, on or before December 31, 2005, a Participant may elect to change the form of payment of the Pre-Retirement Survivor Benefit for Annual Deferral Amounts attributable to 2005. The Participant may elect a form of payment from any of the options permitted in Section 6.2. The requirement set forth in Section 6.2 that such an election must be made at least 1 year prior to the Participant’s death will not apply to an election made pursuant to this Section.

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ARTICLE 7

Termination Benefit

7.1 Termination Benefit. Subject to the Deduction Limitation, the Participant shall receive a Termination Benefit, which shall be equal to the Participant’s Account Balance if a Participant experiences a Termination of Employment prior to his or her Retirement or death.

7.2 Payment of Termination Benefit. The Participant’s Termination Benefit shall be paid in a lump sum. The lump sum payment shall be made thirty days after the date which is six months after the date the Participant experiences the Termination of Employment. Any payment made shall be subject to the Deduction Limitation.

ARTICLE 8

Beneficiary Designation

8.1 Beneficiary. Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates.

8.2 Beneficiary Designation; Change; Spousal Consent. A Participant shall designate his or her Beneficiary or Beneficiaries by completing and signing the Beneficiary Designation Form, and returning it to the Committee or its designated agent. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Committee’s rules and procedures, as in effect from time to time. If the Participant names someone other than his or her spouse as a Beneficiary, a spousal consent, in the form designated by the Committee, must be signed by that Participant’s spouse and returned to the Committee. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled. The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Committee prior to his or her death.

8.3 Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Committee or its designated agent.

8.4 No Beneficiary Designation. If a Participant fails to designate a Beneficiary as provided in Sections 8.1, 8.2 and 8.3 above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the

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Participant’s designated Beneficiary shall be deemed to be his or her surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the executor or personal representative of the Participant’s estate.

8.5 Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in its discretion, to cause the Participant’s Employer to withhold such payments until this matter is resolved to the Committee’s satisfaction.

8.6 Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge all Employers and the Committee from all further obligations under this Plan with respect to the Participant, and that Participant’s Plan Agreement shall terminate upon such full payment of benefits.

ARTICLE 9

Leave of Absence and Rehires

9.1 Paid Leave of Absence. If a Participant is authorized by the Participant’s Employer for any reason to take a paid leave of absence from the employment of the Employer, the Participant shall continue to be considered employed by the Employer and the Annual Deferral Amount shall continue to be withheld during such paid leave of absence in accordance with Section 3.2.

9.2 Unpaid Leave of Absence. If a Participant is authorized by the Participant’s Employer for any reason to take an unpaid leave of absence from the employment of the Employer, deferrals of the Participant’s Base Annual Salary shall automatically cease during such period because the leave of absence is unpaid. However, the Participant’s deferral election shall remain in effect with respect to Annual Bonus and Directors Fees paid during such period. Upon the Participant’s return to paid employment status, deferrals of the Participant’s Base Annual Salary shall resume for the remaining portion of the Plan Year in which the return occurs, based on the deferral election, if any, made for that Plan Year. If no election was made for that Plan Year, no deferral shall be withheld.

9.3 Leave of Absence Treated as a Termination of Employment. Notwithstanding the provisions of Sections 9.1 and 9.2, to the extent required by Code section 409A and IRS guidance thereunder, a leave of absence, whether paid or unpaid, shall be treated as a Termination of Employment (or Retirement, to the extent the Participant is eligible to Retire), and payments shall commence as set forth in Articles 4-7. However, the Participant’s deferral election shall remain in effect unless and until the Participant receives a lump sum payment of his or entire Account Balance.

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9.4 Reemployment following Retirement or Termination of Employment. If a Participant Retires or has a Termination of Employment and subsequently becomes an Employee or Director, payment of benefits accrued during the Participant’s earlier period of service shall continue to be made as if the Participant had remained Retired or Terminated. However, to the extent permitted by the other provisions of this Plan, the Participant may accrue additional benefits under the Plan with respect to the subsequent period of service and may make new elections with respect to the timing and form of payment of such amounts.

ARTICLE 10

Termination, Amendment or Modification

10.1 Termination. Although it is anticipated that the Plan will continue for an indefinite period of time, there is no guarantee that the Company will continue the Plan. Accordingly, the Company reserves the right to discontinue its sponsorship of the Plan and/or to terminate the Plan at any time with respect to any Employer by action of the Board. In general, upon the termination of the Plan with respect to any Employer, the affected Participants who are employed by that Employer, or in the service of that Employer as Directors, shall receive payment of their benefits in accordance with the terms of Articles 4-7. However, the Company may, in its discretion, terminate the entire Plan and pay each Participant a single lump-sum distribution of his or her entire Account Balance, to the extent consistent with Section 15.20. The termination of the Plan shall not adversely affect any Participant or Beneficiary who has become entitled to the payment of any benefits under the Plan as of the date of termination.

10.2 Amendment. The Company may, at any time, through the Board amend or modify the Plan, in whole or in part, with respect to any Employer; provided, however, that: (i) no amendment or modification shall be effective to decrease or restrict the value of a Participant’s Account Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Termination of Employment as of the effective date of the amendment or modification or, if the amendment or modification occurs after the date upon which the Participant was eligible to Retire, the Participant had Retired as of the effective date of the amendment or modification, and (ii) no amendment or modification of this Section 10.2 or Section 11.2 of the Plan shall be effective.

10.3 Plan Agreement. The terms of any Plan Agreement may be different for any Participant, and any Plan Agreement may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan; provided, however, that any such additional benefits or benefit limitations must be agreed to by both the Employer and the Participant. Despite the provisions of Sections 10.1 and 10.2 above, if a

Participant’s Plan Agreement contains benefits or limitations that are not in this Plan document, the Employer may only amend or terminate such provisions with the consent of the Participant.

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10.4 Effect of Payment. The full payment of the applicable benefit under Articles 4, 5, 6 or 7 of the Plan shall completely discharge all obligations to a Participant and his or her designated Beneficiaries under this Plan and the Participant’s Plan Agreement shall terminate.

ARTICLE 11

Administration

11.1 Committee Duties. Except as otherwise provided in this Article 11, this Plan shall be administered by a Committee appointed by the Board, which Committee may consist, in part or in full, of persons who are not on the Board. Members of the Committee may be Participants under this Plan. The Committee shall also have the discretion and authority to (i) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and (ii) decide or resolve any and all questions including interpretations of this Plan, as may arise in connection with the Plan. Any individual serving on the Committee who is a Participant shall not vote or act on any matter relating solely to himself or herself. When making a determination or calculation, the Committee shall be entitled to rely on information furnished by a Participant or the Company.

11.2 Administration Upon Change in Control. For purposes of this Plan, the Company shall be the “Administrator” at all times prior to the occurrence of a Change in Control. Upon and after the occurrence of a Change in Control, the “Administrator” shall be an independent third party selected by the Trustee and approved by the individual who, immediately prior to such event, was the Company’s Chief Executive Officer or, if not so identified, the Company’s highest ranking officer (the “Ex-CEO”). The Administrator shall have the discretionary power to determine all questions arising in connection with the administration of the Plan and the interpretation of the Plan and Trust including, but not limited to benefit entitlement determinations; provided, however, upon and after the occurrence of a Change in Control, the Administrator shall have no power to direct the investment of Plan or Trust assets or select any investment manager or custodial firm for the Plan or Trust. Upon and after the occurrence of a Change in Control, the Company must: (1) pay all reasonable administrative expenses and fees of the Administrator; (2) indemnify the Administrator against any costs, expenses and liabilities including, without limitation, attorney’s fees and expenses arising in connection with the performance of the Administrator hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the Administrator or its employees or agents; and (3) supply full and timely information to the Administrator or all matters relating to the Plan,

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the Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the date of circumstances of the Retirement, death or Termination of Employment of the Participants, and such other pertinent information as the Administrator may reasonably require. Upon and after a Change in Control, the Administrator may be terminated (and a replacement appointed) by the Trustee only with the approval of the Ex-CEO. Upon and after a Change in Control, the Administrator may not be terminated by the Company.

11.3 Agents. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to any Employer.

11.4 Binding Effect of Decisions. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

11.5 Indemnity of Committee. All Employers shall indemnify and hold harmless the members of the Committee, any Employee to whom the duties of the Committee may be delegated, and the Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Committee, any of its members, any such Employee or the Administrator.

11.6 Missing Payees. Each Participant and (in the event of death) his or her Beneficiary shall keep the Committee advised of his or her current address. If the Committee is unable to locate a Participant or Beneficiary at the time a payment is scheduled to be made, the amount of the payment shall be forfeited from the Participant’s Account. The Participant’s Account shall not be reinstated even if the Participant or Beneficiary later claims the right to the payment.

11.7 Payment Delay or Acceleration. Notwithstanding any other provision in this Plan, the Committee may, in it sole and absolute discretion, delay or accelerate payments under the Plan to the extent consistent with Section 15.20.

ARTICLE 12

Other Benefits and Agreements

12.1 Coordination with Other Benefits. The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Participant’s Employer. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.

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ARTICLE 13

Claims Procedures

13.1 Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after such notice was received by the Claimant. All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

13.2 Notification of Decision. The Committee shall consider a Claimant’s claim within a reasonable time, and shall notify the Claimant in writing:

(a) that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or

(b) that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:

(i) the specific reason(s) for the denial of the claim, or any part of it;

(ii) specific reference(s) to pertinent provisions of the Plan upon which such denial was based;

(iii) a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

(iv) an explanation of the claim review procedure set forth in Section 13.3 below.

13.3 Review of a Denied Claim. Within 60 days after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. In conjunction with filing an appeal (but no later than the date the appeal is filed), the Claimant (or the Claimant’s duly authorized representative):

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(a) may review pertinent documents;

(b) may submit written comments or other documents; and/or

(c) may request a hearing, which the Committee, in its sole discretion, may grant.

13.4 Decision on Review. The Committee shall render its decision on review promptly, and not later than 60 days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee’s decision must be rendered within 120 days after such date. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

(a) specific reasons for the decision;

(b) specific reference(s) to the pertinent Plan provisions upon which the decision was based; and

(c) such other matters as the Committee deems relevant.

13.5 Legal Action. A Claimant’s compliance with the foregoing provisions of this Article 13 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Plan.

13.6 Payment Following Resolution of Claim. If a Participant is entitled to a payment following the resolution of a claim pursuant to this Article 13, such payment will be made during the calendar year in which the claim is finally and conclusively resolved, or, if later, at the time set forth under Articles 4-7.

ARTICLE 14

Trust

14.1 Establishment of the Trust. The Company has established the Trust, and each Employer shall at least annually transfer over to the Trust such assets as the Employer determines, in its sole discretion, are necessary to provide, on a present value basis, for its respective future liabilities created with respect to the Annual Deferral Amounts for such Employer’s Participants for all periods prior to the transfer, as well as any debits and credits to the Participants’ Account Balances for all periods prior to the transfer, taking into consideration the value of the assets in the trust at the time of the transfer.

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14.2 Interrelationship of the Plan and the Trust. The provisions of the Plan and the Plan Agreement shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Employers, Participants and the creditors of the Employers to the assets transferred to the Trust. Each Employer shall at all times remain liable to carry out its obligations under the Plan.

14.3 Distributions From the Trust. Each Employer’s obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Employer’s obligations under this Plan.

14.4 Investment of Trust Assets. The Trustee of the Trust shall be authorized, upon written instructions received from the Committee or investment manager appointed by the Committee, to invest and reinvest the assets of the Trust in accordance with the applicable Trust Agreement, including the disposition of stock and reinvestment of the proceeds in one or more investment vehicles designated by the Committee.

ARTICLE 15

Miscellaneous

15.1 Status of Plan. The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intention.

15.2 Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of an Employer, including any assets held in the Trust. For purposes of the payment of benefits under this Plan, any and all of an Employer’s assets shall be, and remain, the general, unpledged unrestricted assets of the Employer. An Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.

15.3 Employer’s Liability. An Employer’s liability for the payment of benefits shall be defined only by the Plan and the Plan Agreement, as entered into between the Employer and a Participant. An Employer shall have no obligation to a Participant under the Plan except as expressly provided in the Plan and his or her Plan Agreement.

15.4 Nonassignability. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall,

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prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person or be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.

15.5 Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between any Employer and the Participant. Such employment is hereby acknowledged to be an “at will” employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement. Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of any Employer, either as an Employee or a Director, or to interfere with the right of any Employer to discipline or discharge the Participant at any time.

15.6 Furnishing Information. A Participant or his or her Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary.

15.7 Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.

15.8 Captions. The captions of the articles, sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

15.9 Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the State of California without regard to its conflicts of laws principles.

15.10 Notice. Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

Jacobs Engineering Group Inc.

Employee Benefits

1111 S. Arroyo Parkway

Pasadena, CA 91105

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Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.

15.11 Successors. The provisions of this Plan shall bind and inure to the benefit of the Participant’s Employer and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.

15.12 Spouse’s Interest. The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor shall such interest pass under the laws of intestate succession.

15.13 Validity. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

15.14 Incompetent. If the Committee determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.

15.15 Payments to Spouses. If a court determines that a spouse or former spouse of a Participant has an interest in the Participant’s benefits under the Plan in connection with a property settlement or otherwise, the Committee, in its sole discretion, shall have the right, notwithstanding any election made by a Participant, to immediately distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the Plan to that spouse or former spouse. The Plan will honor only those domestic relations orders that satisfy the requirements set forth by the Committee, which may be modified from time to time without notice to Participants.

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15.16 Distribution in the Event of Taxation.

(a) In General. If, for any reason, all or any portion of a Participant’s benefits under this Plan becomes taxable to the Participant under Code section 409A prior to receipt, an amount equal to the taxable portion of his or her benefit will be distributed immediately to the Participant in the form of a lump sum (which amount shall not exceed the Participant’s unpaid Account Balance under the Plan). Such a distribution shall affect and reduce the benefits to be paid under this Plan.

(b) Trust. If the Trust terminates in accordance with Section 3.6(e) of the Trust and benefits are distributed from the Trust to a Participant in accordance with that Section, the Participant’s benefits under this Plan shall be reduced to the extent of such distributions.

15.17 Payment Delays due to Employer Insolvency. Notwithstanding any other provision in this Plan, payment of a Participant’s benefits will be delayed in the event that making the payment will jeopardize the ability of the Employer to continue as a going concern. A payment delayed pursuant to this Section 15.17 will be made during the first calendar year in which making the payment would not have such effect.

15.18 Insurance. The Employers, on their own behalf or on behalf of the trustee of the Trust, and, in their sole discretion, may apply for and procure insurance on the life of the Participant, in such amounts and in such forms as the Employers may choose. The Employers or the trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance. The Participant shall have no interest whatsoever in any such policy or policies, and at the request of the Employers shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Employers have applied for insurance.

15.19 Legal Fees to Enforce Rights After Change in Control. The Company and each Employer is aware that upon the occurrence of a Change in Control, the Board or the board of directors of a Participant’s Employer (which might then be composed of new members) or a shareholder of the Company or the Participant’s Employer, or of any successor corporation, or the Administrator or the Committee, might then cause or attempt to cause the Company, the Participant’s Employer or such successor to refuse to comply with its obligations under the Plan and might cause or attempt to cause the

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Company or the Participant’s Employer to institute, or may institute, litigation seeking to deny Participants the benefits intended under the Plan. In these circumstances, the purpose of the Plan could be frustrated. Accordingly, if, following a Change in Control, it should appear to any Participant that the Company, the Participant’s Employer or any successor corporation, or the Administrator or any member of the Committee, has failed to comply with any of its obligations under the Plan or any agreement thereunder or, if the Company, such Employer or any other person takes any action to declare the Plan void or unenforceable or institutes any litigation or other legal action designed to deny, diminish or to recover from any Participant the benefits intended to be provided, then the Company and the Participant’s Employer irrevocably authorize such Participant to retain counsel of his or her choice at the expense of the Company and the Participant’s Employer (who shall be jointly and severally liable) to represent such Participant in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company, the Participant’s Employer or any director, officer, shareholder or other person affiliated with the Company, the Participant’s Employer or any successor thereto in any jurisdiction. In order to be eligible for reimbursement pursuant to this Section 15.19, fees and expenses must be incurred on or after a Change in Control and before the later of (i) the closing of the Participant’s estate, and (ii) the closing of the estate of each Beneficiary. Any payment to which a Participant is entitled pursuant to this Section must be made no later than the last day of the Participant’s taxable year following the taxable year in which the related fee or expense is incurred.

15.20 Code Section 409A. The Plan is intended to avoid any “plan failures” within the meaning of Code section 409A(a)(1). The Plan shall be interpreted and administered, to the extent possible, in accordance with this intention.

IN WITNESS WHEREOF, the Company has signed this Plan document as of December 23, 2008.

“Company” Jacobs Engineering Group Inc.
By:	/S/ JOHN W. PROSSER, JR.
Title:	Executive Vice President, Finance and Administration

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Craig L. Martin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended April 2, 2010 of Jacobs Engineering Group 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 the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange 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, to ensure 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes 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 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’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 reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Craig L. Martin

Craig L. Martin

Chief Executive Officer

April 29, 2010

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, John W. Prosser, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended April 2, 2010 of Jacobs Engineering Group 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 the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial 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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange 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, to ensure 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 our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes 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 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’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 reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ John W. Prosser Jr.

John W. Prosser, Jr.

Chief Financial Officer

April 29, 2010

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to 18 U.S.C. Section 1350

Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Jacobs Engineering Group Inc. (the “Company”) on Form 10-Q for the quarter ended April 2, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Craig L. Martin, Chief Executive Officer of the Company, 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 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Craig L. Martin

Craig L. Martin

Chief Executive Officer

April 29, 2010

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. Section 1350

Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Jacobs Engineering Group Inc. (the “Company”) on Form 10-Q for the quarter ended April 2, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John W. Prosser, Jr., Chief Financial Officer of the Company, 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 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John W. Prosser Jr.

John W. Prosser, Jr.

Executive Vice President,

Finance and Administration

April 29, 2010

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.