8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT  REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

November 14, 2005

TETRA TECH, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-19655	95-4148514
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

3475 East Foothill Boulevard, Pasadena, California  91107

(Address of principal executive office and zip code)

(626) 351-4664

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.Entry into a Material Definitive Agreement.

On November 14, 2005 the Board of Directors of Tetra Tech, Inc. (the “Company”) approved and ratified, in accordance with the recommendations of the Compensation Committee, the following actions:

Approval of the Executive Compensation Policy

The Company’s Executive Compensation Policy (the “Policy”) applies to all executive officers, as well as any other positions recommended by the Chief Executive Officer (“CEO”) in consultation with the Chairman and approved by the Board of Directors that have a particularly significant impact on the overall success of the Company.  The principal components of compensation are base salary, annual performance bonuses and long-term incentive compensation.

Base salaries are reviewed on an annual basis to ensure internal equity and external competitiveness.  Annual performance bonuses provide an incentive and a financial reward to those who contribute most to the Company’s operating results and growth.  Each year the Company identifies a target amount of incentive compensation for each participant, expressed as a percentage of base salary.  Bonuses are paid based upon meeting pre-determined performance criteria in the categories of overall corporate performance and individual contribution.  Long-term incentive awards are designed to encourage the achievement of long-term sustained growth of stockholder value.  These awards are generally provided in the form of equity compensation; however, the Board of Directors has the right to utilize deferred cash incentives if beneficial to the interests of the Company and its stockholders.

A copy of the Policy is filed with this Current Report as Exhibit 10.1 and is hereby incorporated by reference herein.  The foregoing description of the Policy does not purport to be complete and is qualified in its entirety by reference to the full text of the Policy.

Approval of 2005 Equity Incentive Plan

The Company’s 2005 Equity Incentive Plan (the “Plan”) amends, restates and renames, effective November 14, 2005, subject to approval of the Company’s stockholders, the Company’s 2002 Stock Option Plan (the “2002 Plan”).

Under the Plan, 3,000,000 shares of the Company’s Common Stock, plus the number of remaining shares under the 2002 Plan, as of the date of stockholder approval of the Plan, will be reserved for issuance pursuant to awards.  The awards may be in the form of options, stock appreciation rights, restricted stock, restricted stock units or other equity-based awards, at the discretion of the Compensation Committee.  However, not more than 750,000 of the total number of shares reserved for issuance under the Plan may be granted or sold as awards of restricted stock, restricted stock units, unrestricted grants of shares and other awards whose intrinsic value is not solely dependent on appreciation in share price after the date of grant.

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A copy of the Plan is filed with this Current Report as Exhibit 10.2 and is hereby incorporated by reference herein.  The foregoing description of the Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the Plan.

Compensation Arrangements

(a)Li-San Hwang.  In connection with Dr. Hwang’s intention to retire as Chairman following the 2006 Annual Meeting of Stockholders (i) Dr. Hwang was granted the honorary title of Chairman Emeritus of the Company for life; (ii) Dr. Hwang and his spouse will receive post-retirement medical coverage; (iii) Dr. Hwang’s outstanding stock options will continue to vest in accordance with their established schedules; (iv) Dr. Hwang will receive a one-time payment equal to one year of his current base salary, to be paid one-half in March 2006 and one-half in March 2007, as a retainer for services; and (v) Dr. Hwang’s existing auto lease will continue through the expiration of the current lease period.

(b)Dan L. Batrack.  In connection with Mr. Batrack’s election as CEO (as described in Item 5.02 below), Mr. Batrack’s annual base compensation was increased from $360,000 to $450,000, effective November 14, 2005.

(c)Sam W. Box.  In connection with the retention of Mr. Box as the Company’s President, Mr. Box’s annual base compensation was increased from $400,000 to $425,000, effective November 14, 2005, and Mr. Box will receive an equity award not to exceed 20,000 shares of restricted stock to retain his service for a minimum of two years.

Item 2.02.Results of Operations and Financial Condition.

On November 16, 2005, the Company reported its results of operations for its fourth fiscal quarter ended October 2, 2005.  A copy of the press release issued by the Company concerning the foregoing is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing.  The information in this Current Report, including the exhibit hereto, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

Item 5.02.Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

On November 16, 2005, the Company issued a press release to announce that:

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(a)Li-San Hwang, the Company’s Chairman and CEO, had retired as CEO, effective November 14, 2005, and would remain Chairman of the Board until the 2006 Annual Meeting of Stockholders;  and

(b)Dan L. Batrack, age 47, had been elected as the Company’s CEO and as a member of the Board of Directors, effective November 14, 2005.  Mr. Batrack previously served as the Company’s Executive Vice President and Chief Operating Officer (“COO”), and will continue to hold the COO title.  Mr. Batrack will not serve on any committee of the Board of Directors.

Mr. Batrack joined the Company’s predecessor (the Water Management Group of Tetra Tech, Inc., a subsidiary of Honeywell Inc.) in 1980, and was named Executive Vice President and COO in October 2004.  Mr. Batrack has served the Company in numerous capacities over the last 25 years, including project scientist, project manager, operations manager, senior vice president and president of an operating unit.  He has managed complex solutions for many small and Fortune 500 customers, both in the U.S. and internationally.

The full text of the press release issued by the Company on November 16, 2005 announcing the election of Mr. Batrack to succeed Dr. Hwang is attached as Exhibit 99.2 to this report.

Item 9.01.Financial Statements and Exhibits.

(c)Exhibits

10.1	Executive Compensation Policy
10.2	2005 Equity Incentive Plan
99.1	Press Release, dated November 16, 2005, reporting the results of operations for the Company’s fourth fiscal quarter ended October 2, 2005
99.2	Press Release, dated November 16, 2005, announcing the election of Dan Batrack to succeed Li-San Hwang

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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 hereunto duly authorized.

		TETRA TECH, INC.
Date:	November 16, 2005	By:	/s/ DAN L. BATRACK
			Dan L. Batrack
			Chief Executive Officer

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EX-10.1

Exhibit 10.1

 TETRA TECH, INC.

EXECUTIVE COMPENSATION POLICY

Approved By:

Compensation Committee:11/14/2005

Document Owner:Compensation Committee

TABLE OF CONTENTS

Section
1.0	PURPOSE
2.0	PHILOSOPHY
3.0	SCOPE
4.0	ROLES AND RESPONSIBILITIES
5.0	EXECUTIVE COMPENSATION COMPONENTS AND PLAN
6.0	PROCESS FLOW/SCHEDULE
7.0	APPENDIX I - POSITIONS COVERED BY THE EXECUTIVE COMPENSATION POLICY
8.0	APPENDIX II - EXAMPLES
9.0	APPENDIX III - APPROVAL FORMS

Tetra Tech Confidential

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1.0PURPOSE

The purpose of this document is to define the executive compensation policy for Tetra Tech, Inc.

2.0PHILOSOPHY

Tetra Tech’s executive compensation program is designed to:

•Align the interests of executive officers with those of the stockholders;

•Attract, motivate, reward, and retain top level executives upon whom, in large part, the success of the Company depends;

•Be competitive with compensation programs for companies of similar size and complexity with whom the Company competes for executive talent, including direct competitors;

•Provide compensation based upon the short-term and long-term performance of both the individual executive and the Company; and

•Strengthen the relationship between pay and performance by emphasizing variable, at-risk compensation that is dependent upon the successful achievement of specified corporate and individual goals.

3.0SCOPE

This policy applies to all executive officers of Tetra Tech, Inc. as well as any other positions recommended by the Chief Executive Officer (CEO) in consultation with the Chairman and approved by the Board of Directors that have a particularly significant impact on the overall success of the Company.

4.0ROLES AND RESPONSIBILITIES

Compensation Committee

•Under delegated authority from the Board of Directors, develops, administers, and monitors executive compensation in the long-term interests of the Company and its stockholders;

•Evaluates the performance of the Chairman and the CEO, and establishes the compensation of the Chairman and the CEO ;

•Establishes the compensation of all executive officers of the Company based, in part, on the CEO’s recommendations; and

•Determines that performance goals have been attained before payment.

Audit Committee

•Jointly with the Compensation Committee determines the individual performance factor for the CFO position.

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Chief Executive Officer

•Reviews the performance of all other officers of the Company, and, in consultation with the Chairman, makes specific recommendations to the Compensation Committee in regard to their compensation; and

•Develops performance targets for all other executive officers and, in consultation with the Chairman, recommends those performance targets to the Compensation Committee.

Human Resources

•Acquires information regarding peer group and other competitor pay practices, and provides analysis of this information to the CEO, the Chairman, and the Compensation Committee; and

•Provides compensation practice trend data to the CEO, the Chairman, and the Compensation Committee.

Finance and Accounting

•Provides Corporate performance data for use in determining the degree to which certain performance objectives have been met; and

•Assures payments have been properly accrued for and reported.

5.0EXECUTIVE COMPENSATION COMPONENTS AND PLAN

The primary components of compensation for executive officers are base salary, annual performance bonuses, and long-term incentive compensation.

5.1BASE SALARY

Base salaries for positions in Appendix I are reviewed on an annual basis to ensure internal equity and external competitiveness.  Salaries are reviewed to determine whether the base compensation is within a reasonable range of executive pay levels at other companies that potentially compete with the Company for business and executive talent.  Total compensation is considered during this analysis.  Consideration is given to individual performance, experience and time in the position, initiative, contribution to overall corporate performance, and salaries paid to other executives in the Company.  The review and determination occur as shown in Section 6.0.

5.2ANNUAL PERFORMANCE BONUSES

This component is intended to promote the interests of the Company by providing both an incentive and a financial reward for those managerial and other key employees who contribute most to the operating results and growth of the Company.  Each year the Company identifies a target amount of incentive compensation for each executive officer and the other key positions listed in Appendix I.  This target is expressed as a percentage of base salary.

Bonuses are paid based upon meeting pre-determined performance criteria.  These criteria fall into two categories: (1) overall corporate performance, designated the Corporate Performance Factor (CPF), based on assessment of how the overall corporation did in achieving its key objectives and (2) individual contribution, designated the Individual Factor (IF), based on

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individual performance.  The CPF determined by the Compensation Committee shall have a range of 0 to 1.4 with a target of 1.0 based on achievement of key objectives. The CPF for group executives and group controllers will be determined by the CEO based on the contribution of the specific group to the Corporation. The IF shall have a range of 0 to 1.2 with a target of 1.0 for expected contribution level.  The IF will be recommended by the CEO and approved by the Compensation Committee with the exception of the Chairman, Vice Chairman, CEO, and CFO positions. The IF for the Chairman/Vice Chairman will be determined by the Compensation Committee. The IF for the CEO will be recommended by the Chairman and determined by the Compensation Committee. The IF for the CFO will be recommended by the CEO and determined jointly by the Audit Committee and Compensation Committee, giving strong consideration to the Audit Committee’s assessment of the strength of the Company’s internal financial controls and the accuracy and appropriateness of its financial reporting.

Target bonus amounts as a percentage of base salary are as follows:

TARGET BONUS AMOUNTS

POSITION	PERCENTAGE (%)
Chairman/Vice Chairman	100
Chief Executive Officer	75
Chief Operating Officer	55
President	55
Chief Financial Officer	55
Other Executive Officers	40
Other Key Positions	30-40

Each Officer is eligible to receive an annual bonus in the range of 0% to 168% of target, i.e, CPF (1.4) x IF(1.2) = 1.68 (168%) x target)

MINIMUM/MAXIMUM OF BASE

POSITION	TARGET PERCENTAGE (%)	MINIMUM (%)	MAXIMUM (%)
Chairman/Vice Chairman	100	0	168
Chief Executive Officer	75	0	126
Chief Operating Officer	55	0	92.4
President	55	0	92.4
Chief Financial Officer	55	0	92.4
Other Executive Officers	40	0	67.2
Other Key Positions	30-40	0	50.4-67.2

The Board of Directors reserves the right to “zero” the CPF if results are significantly below expected targets or a manageable event negatively and severely impacts stockholder value.  The minimum performance threshold is .6; achievement of less than 60% in either the CPF or IF will result in the elimination of the bonus paid. Notwithstanding the above, the Compensation

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Committee, in consultation with the Chairman and the CEO, reserve the discretion to adjust specific performance bonus amounts when deemed to be in the interests of the shareholders.

Bonus payments are made by December 15 of each year, based upon performance in the recently concluded fiscal year.

5.3LONG-TERM INCENTIVE COMPENSATION

Long-term incentive awards are designed to encourage recipients to achieve long term sustained growth of stockholder value.  The long-term incentive compensation program encourages executives to maintain a long-term financial perspective by linking a substantial portion of their compensation to stockholder returns and the Company’s long-term financial success.

Long-term incentives are generally provided in the form of equity compensation, such as stock options and/or other equity related programs.  However, the Board of Directors reserves the right to utilize deferred cash incentives if beneficial to the interests of the Company and its stockholders. Long-term incentive awards may have certain restrictions, such as mandatory vesting periods which encourage participating executives to continue in the Company’s employ and thereby act as a retention incentive.

Any equity compensation shall be in accordance with the provisions and limitations of the Equity Incentive Plan periodically adopted by the Board of Directors and approved by stockholder vote.  The schedule for distribution of long term-incentives is shown in Section 6.

In addition to the above, the following guidelines will apply to the long-term incentive plan:

•A maximum of 2% of outstanding shares of stock and/or options will be distributed in any one year period. The Board of Directors retains the discretion to increase this amount due to special circumstances, such as an acquisition.

•A reserve of 10% minimum of the shares available for distribution each year will be held outside the normal distribution for special needs (i.e., hiring, retention, etc.) that occur during the year.

•All restricted stock grants shall be approved by the Compensation Committee of the Board of Directors

•No more than 0.5% of the outstanding shares of stock and/or options can be distributed to Executive Officers in one year.

•The plan shall target 8-15% of the non-officer population for inclusion in the long term incentive program.

•Minimum grants to non-officers will be 500 shares and maximum grants to non-officers will be 10,000 shares.

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6.0PROCESS FLOW/SCHEDULE

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APPENDIX I – POSITIONS COVERED BY THE EXECUTIVE COMPENSATION POLICY

Consistent with Section 3.0 of the Executive Compensation Policy, this policy applies to all executive officers of Tetra Tech, Inc. as well as any other positions recommended by the CEO and approved by the Board of Directors that have a particularly significant impact on the overall success of the Company.  Each of these positions is listed below:

Officer Positions:

Chairman

Vice Chairman

Chief Executive Officer

Executive Vice President/Chief Operating Officer

President

Executive Vice President/Chief Financial Officer

Senior Vice President Corporate Administration

Vice President, General Counsel, Secretary

Vice President, Finance and Enterprise Systems

Vice President, Corporate Controller

Vice President, Investor Relations and Corporate Development

Other Key Positions:

Senior Vice President Tt and President Remediation and Construction Group

Controller- Remediation and Construction Group

Senior Vice President Tt and President Environmental Engineering and Consulting Group

Controller- Environmental Engineering and Consulting Group

Senior Vice President Tt and President Systems Support and Security Group

Controller- Systems Support and Security Group

Senior Vice President Tt and President Civil Infrastructure Group

Controller- Civil Infrastructure Group

Senior Vice President Tt and President Government Environmental Services Group

Controller- Government Environmental Services Group

Vice President, Human Resources

Vice President, Information Services

Vice President, Contracts

Vice President, Marketing and Business Development

Vice President, Tax and Treasury

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APPENDIX II – EXAMPLES

Example 1

Narrative:The Company significantly exceeds each of its key objectives and the CEO significantly exceeds all individual contribution expectations, maximizing the bonus payment.

Position: CEO Base Salary: $500,000 CPF: 1.4 IF: 1.2

Bonus to be paid:  $500,000 X 0.75 X 1.4 X 1.2 = $630,000

Example 2

Narrative:The Company achieves all and exceeds some of its key objectives, and the COO meets all individual contribution expectations.

Position: COO Base Salary: $360,000 CPF: 1.2 IF: 1.0

Bonus to be paid:  $360,000 X 0.55 X 1.2 X 1.0 = $237,600

Example 3

Narrative:The Company meets its key objectives, and the General Counsel meets individual contribution expectations.

Position: General Counsel Base Salary: $250,000 CPF: 1.0 IF: 1.0

Bonus to be paid: $250,000 X 0.40 X 1.0 X 1.0 = $100,000

Example 4

Narrative:The Company meets 80% of its key objectives, and the Corporate Controller significantly exceeds individual contribution expectations.

Position: Corporate Controller Base Salary: $205,000 CPF: 0.8 IF: 1.2

Bonus to be paid:  $205,000 X 0.40 X 0.8 X 1.2 = $78,820

Example 5

Narrative:A Group President leading a company significantly misses key objectives while the overall corporation meets its goals.

Position:	Group President	Base Salary: $350,000	CPF 0.5	IF: 1.0
		(below threshold)

Bonus to be paid:   $350,000 X 0.4 X 1.0 X 0.0 = 0

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APPENDIX III – APPROVAL FORMS

To:Compensation Committee

In accordance with the terms and conditions of the Executive Compensation Policy, the following executives have earned bonus payments in the amounts indicated. 

NAME	POSITION	BONUS TO BE PAID ($)*
	Chairman**
	Vice Chairman**
	Chief Executive Officer**
	Executive Vice President- Chief Operating Officer
	President
	Executive Vice President- Chief Financial Officer
	Senior Vice President Corporate Administration
	Vice President, General Counsel, Secretary
	Vice President, Finance and Enterprise Systems
	Vice President, Corporate Controller
	Vice President, Investor Relations and Corporate Development
	Vice President, Human Resources
	Vice President, Information Services
	Vice President, Contracts
	Vice President, Marketing and Business Development
	Vice President, Tax and Treasury
	Senior Vice President Tt and President Remediation and Construction Group
	Controller- Remediation and Construction Group
	Senior Vice President Tt and President Environmental Engineering and Consulting Group
	Controller- Environmental Engineering and Consulting Group
	Senior Vice President Tt and President Systems Support and Security Group
	Controller- Systems Support and Security Group
	Senior Vice President Tt and President Civil Infrastructure Group
	Controller- Civil Infrastructure Group
	Senior Vice President Tt and President Government Environmental Services Group
	Controller- Government Environmental Services Group

Recommended:	Chief Executive Officer
Approved:	Compensation Committee Chairperson

*Worksheet attached

**Bonus amount to be determined by Compensation Committee

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PERFORMANCE BONUS WORKSHEET

					PERFORMANCE FACTOR
			TARGET				AGGREGATE	BONUS
		BASE	BONUS		CORPORATE	INDIVIDUAL	PERFORMANCE	TO BE
POSITION	NAME	SALARY	%	$	(0 - 1.4)	(0-1.2)	FACTOR	PAID

Vice President, Corporate Human Resources

Chief Executive Officer

EX-10.2

Exhibit 10.2

TETRA TECH, INC.

2005 EQUITY INCENTIVE PLAN

ARTICLE I.
PURPOSE

1.1Purpose.  The purpose of the Tetra Tech, Inc. 2005 Equity Incentive Plan (the “Plan”) is to promote the interests of Tetra Tech, Inc. (the “Company”) and its stockholders by enabling the Company to offer Participants an opportunity to acquire an equity interest in the Company so as to better attract, retain, and reward its Service Providers and other persons providing services to the Company and, accordingly, to strengthen the mutuality of interests between Participants and the Company’s stockholders by providing Participants with a proprietary interest in pursuing the Company’s long-term growth and financial success.  This Plan hereby amends, restates and renames as set forth herein, effective November 14, 2005, subject to the approval of the Company’s stockholders, the Tetra Tech, Inc. 2002 Stock Option Plan (the “2002 Plan”).

ARTICLE II.
SHARE LIMITS

2.1Shares Subject to the Plan.

(a)Share Reserve.  Subject to adjustment under Section 2.3 of the Plan, the sum of Three Million (3,000,000) Shares plus the number of remaining Shares under the 2002 Plan (not subject to outstanding Awards and not delivered out of Shares reserved thereunder) as of the date of stockholder approval of the Plan shall be initially reserved for issuance pursuant to Awards made under the Plan.  At all times the Company will reserve and keep available a sufficient number of Shares to satisfy the requirements of all outstanding Awards made under the Plan and all other outstanding but unvested Awards made under the Plan that are to be settled in Shares.

(b)Shares Counted Against Limitation.  If an Award is exercised, in whole or in part, by delivery or attestation of Shares under Section 6.4(b), or if the tax withholding obligation is satisfied by withholding Shares under Section 10.8, the number of Shares deemed to have been issued under the Plan (for purposes of the limitation set forth in this Section 2.1) shall be the number of Shares that were subject to the Award or portion thereof so exercised and not the net number of Shares actually issued upon such exercise.

(c)Lapsed Awards.  If an Award: (i) expires; (ii) is terminated, surrendered, or canceled without having been exercised in full; or (iii) is otherwise forfeited in whole or in part, then the unissued Shares that were subject to such Award and/or such surrendered, canceled, or forfeited Shares (as the case may be) shall become available for future grant or sale under the Plan (unless the Plan has terminated), subject however, in the case of Incentive Stock Options, to any limitations under the Code.

(d)Limitation on Full-Value Awards.  Not more than Seven Hundred Fifty Thousand (750,000) of the total number of Shares reserved for issuance under the Plan (as adjusted under Section 2.3) may be granted or sold as Awards of Restricted Stock, Restricted

Stock Units, unrestricted grants of Shares and other Awards (“Full-Value Awards”) whose intrinsic value is not solely dependent on appreciation in the price of Shares after the date of grant.  Options and Stock Appreciation Rights shall not be subject to, and shall not count against, the limit described in the preceding sentence.  If a Full-Value Award expires, is forfeited or otherwise lapses as described in Section 2.1(c), the Shares that were subject to the Award shall be restored to the total number of Shares available for grant or sale as Full-Value Awards.

(e)Substitute Awards.  The Committee may grant Awards under the Plan in substitution for stock and stock based awards held by employees, directors, consultants or advisors of another company (an “Acquired Company”) in connection with a merger or consolidation of such Acquired Company with the Company or the acquisition by the Company of property or stock of the Acquired Company.  The Committee may direct that the substitute Awards be granted on such terms and conditions as the Committee considers appropriate in the circumstances.  Any substitute Awards granted under the Plan shall not count against the share limitations set forth in Sections 2.1(a) and 2.2.

2.2Individual Share Limit.  In any Tax Year, no Service Provider shall be granted Awards with respect to more than One Million (1,000,000) Shares.  The limit described in this Section 2.2 shall be construed and applied consistently with Section 162(m) of the Code, except that the limit shall apply to all Service Providers.

(a)Awards not Settled in Shares.  If an Award is to be settled in cash or any medium other than Shares, the number of Shares on which the Award is based shall count toward the individual share limit set forth in this Section 2.2.

(b)Canceled Awards.  Any Awards granted to a Participant that are canceled shall continue to count toward the individual share limit applicable to that Participant set forth in this Section 2.2.

2.3Adjustments.

(a)In the event that there is any dividend or distribution payable in Shares, or any stock split, reverse stock split, combination or reclassification of Shares, or any other similar change in the number of outstanding Shares, then the maximum aggregate number of Shares available for Awards under Section 2.1 of the Plan, the maximum number of Shares issuable to a Service Provider under Section 2.2 of the Plan, and any other limitation under this Plan on the maximum number of Shares issuable to an individual or in the aggregate shall be proportionately adjusted (and rounded down to a whole number) by the Committee as it deems equitable in its discretion to prevent dilution or enlargement of the rights of the Participants.  The Committee’s determination with respect to any such adjustments shall be conclusive.

(b)In the event that there is any extraordinary dividend or other distribution in respect of the Shares, recapitalization, reclassification, merger, reorganization, consolidation, combination, sale of assets, split-up, exchange, spin-off or other extraordinary event, then the Committee shall make provision for a cash payment, for the substitution or exchange of any or all outstanding Awards or a combination of the foregoing, based upon the distribution or consideration payable to holders of the Shares in respect of such event or on such other terms as the Committee otherwise deems appropriate.

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ARTICLE III.
ADMINISTRATION OF THE PLAN

3.1Administration.  The Plan shall be administered and interpreted by a compensation committee (the “Committee”).  The Committee shall consist of two or more members of the Board who are “outside directors” as defined under Section 162(m) of the Code and “non-employee directors” as defined under Rule 16b-3 under the Exchange Act.

3.2Authority of Committee.  The Committee has the sole authority, subject to the provisions of the Plan, to (i) select the employees and other individuals to receive Awards under the Plan, (ii) determine the type, size and terms of the Awards to be made to each individual selected, (iii) determine the Fair Market Value, (iv) determine the time when the Awards will be granted and the duration of any applicable exercise and vesting period, including the criteria for exercisability and vesting and the acceleration of exercisability and vesting with respect to each individual selected, (v) make such adjustments or modifications to Awards to Participants who are foreign nationals or employed outside of the United States in order to recognize differences in local law, tax policies or customs and (vi) deal with any other matter arising under the Plan.  The Committee is authorized to interpret the Plan and the Awards granted under the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determination that it deems necessary or desirable for the administration of the Plan.  The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent the Committee deems necessary or desirable.  Any decision of the Committee in the interpretation and administration of the Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned.  All powers of the Committee shall be executed in its sole discretion and need not be uniform as to similarly situated individuals.

3.3Committee Manner of Action.  Unless otherwise provided in the bylaws of the Company or the charter of the Committee: (i) a majority of the members of a Committee shall constitute a quorum, and (ii) the vote of a majority of the members present who are qualified to act on a question assuming the presence of a quorum or the unanimous written consent of the members of the Committee shall constitute action by the Committee.  The Committee may delegate the performance of ministerial functions in connection with the Plan to such person or persons as the Committee may select.

3.4Responsibility of Committee.  No member of the Board, no member of the Committee and no employee of the Company shall be liable for any act or failure to act hereunder, except in circumstances involving his or her bad faith, gross negligence or willful misconduct, or for any act or failure to act hereunder by any other member of the Committee or employee of the Company.  The Company shall indemnify members of the Committee and any employee of the Company against any and all liabilities or expenses to which they may be subjected by reason of any act or failure to act with respect to their duties under the Plan, except in circumstances involving his or her bad faith, gross negligence or willful misconduct.

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ARTICLE IV.
PARTICIPATION

4.1Participants.  All Service Providers are eligible to participate in the Plan; provided, however, that no Reporting Person may receive an Award unless such person is employed by or serves as a consultant to the Company.  Incentive Stock Options may be granted only to Employees.  Consistent with the purposes of the Plan, the Committee shall have exclusive power to select the Service Providers who may participate in the Plan (“Participants”).  Eligible individuals may be selected individually or by groups or categories, as determined by the Committee in its discretion, and designation as a person to receive Awards in any year shall not require the Committee to designate such a person as eligible to receive Awards in any other year.

ARTICLE V.
VESTING AND PERFORMANCE OBJECTIVES

5.1General.  The vesting schedule or Period of Restriction for any Award shall be specified in the Award Agreement.  The criteria for vesting and for removing restrictions on any Award may include (i) performance of substantial services for the Company for a specified period; (ii) achievement of one or more Performance Objectives; or (iii) a combination of clauses (i) and (ii), as determined by the Committee.

5.2Period of Absence from Providing Substantial Services.  To the extent that vesting or removal of restrictions is contingent on performance of substantial services for a specified period, a leave of absence (whether paid or unpaid) shall not count toward the required period of service unless the Award Agreement provides otherwise.

5.3Performance Objectives.

(a)Possible Performance Objectives.  Any Performance Objective shall relate to the Participant’s performance for the Company or the Company’s business activities or organizational goals, and shall be sufficiently specific that a third party having knowledge of the relevant facts could determine whether the Performance Objective is achieved.  The Performance Objectives with respect to any Award may be one or more of the following objectives, as established by the Committee in its sole discretion:

•Achieving a target level of revenue and/or revenue, net of subcontractor costs;

•Achieving a target level of income from operations;

•Achieving a target level of net income;

•Achieving a target return on the Company’s capital, assets or stockholders’ equity;

•Maintaining or achieving a target level of appreciation in the price of the Shares;

•Achieving or maintaining a Share price that meets or exceeds the performance of specified stock market indices or other benchmarks over a specified period;

•Achieving a level of Share price, earnings or income performance that meets or exceeds performance in comparable areas of peer companies over a specified period;

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•Achieving specified reductions in costs;

•Achieving specified improvements in collection of outstanding accounts receivable or specified reductions in write-offs;

•Achieving a target days sales in receivables (DSR) level; and

•Achieving a target level of cash flow from operations.

(b)Stockholder Approval of Performance Objectives.  The list of possible Performance Objectives set forth in Section 5.3(a), above, and the other material terms of Awards of Restricted Stock or Restricted Stock Units that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code, shall be subject to reapproval by the Company’s stockholders at the first stockholder meeting that occurs in 2011.  No Award of Restricted Stock or Restricted Stock Units that is intended to qualify as “performance-based compensation” under Section 162(m) of the Code shall be made after that meeting unless stockholders have reapproved the list of Performance Objectives and other material terms of such Awards, or unless the vesting of the Award is made contingent on stockholder approval of the Performance Objectives and other material terms of such Awards.

(c)Documentation of Performance Objectives.  With respect to any Award, the Performance Objectives shall be set forth in writing no later than 90 days after commencement of the period to which the Performance Objective(s) relate(s) (or, in the case of performance periods of less than one year, in no event after 25% of such period has elapsed) and at a time when achievement of the Performance Objectives is substantially uncertain.  Such writing shall also include the period for measuring achievement of the Performance Objectives, which shall be no less than three consecutive months or greater than five consecutive years, as established by the Committee.  Once established by the Committee, the Performance Objective(s) may not be changed to accelerate the settlement of an Award or to accelerate the lapse or removal of restrictions on Restricted Stock that otherwise would be due upon the attainment of the Performance Objective(s).

(d)Committee Certification.  Prior to settlement of any Award that is contingent on achievement of one or more Performance Objectives, the Committee shall certify in writing that the applicable Performance Objective(s) and any other material terms of the Award were in fact satisfied.  For purposes of this Section 5.3(d), approved minutes of the Committee shall be adequate written certification.

(e)Negative Discretion.  The Committee may reduce, but may not increase, the number of Shares deliverable or the amount payable under any Award after the applicable Performance Objectives are satisfied.

ARTICLE VI.
STOCK OPTIONS

6.1Terms of Option. Subject to the provisions of the Plan, the type of Option, term, exercise price, vesting schedule and other conditions and limitations applicable to each Option shall be as determined by the Committee and shall be stated in the Award Agreement.

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6.2Type of Option.

(a)Each Option shall be designated in the Award Agreement as either an Incentive Stock Option or a Nonqualified Stock Option.

(b)Neither the Company nor the Committee shall have liability to a Participant or any other party if an Option (or any part thereof) which is intended to be an Incentive Stock Option does not qualify as an Incentive Stock Option.  In addition, the Committee may make an adjustment or substitution described in Section 2.3 that causes the Option to cease to qualify as an Incentive Stock Option without the consent of the affected Participant or any other party.

6.3Limitations.

(a)Maximum Term.  No Option shall have a term in excess of eight (8) years measured from the date the Option is granted.  In the case of any Incentive Stock Option granted to a 10% Stockholder (as defined in Section 6.3(e)), the term of such Incentive Stock Option shall not exceed five years measured from the date the Option is granted.

(b)Minimum Exercise Price.  Subject to Section 2.3(b), the exercise price per share of an Option shall not be less than 100% of the Fair Market Value per Share on the date the Option is granted.  In the case of any Incentive Stock Option granted to a 10% Stockholder (as defined in Section 6.3(e)), subject to Section 2.3(b), the exercise price per share of such Incentive Stock Option shall not be less than 110% of the Fair Market Value per Share on the date the Option is granted.

(c)Repricing Prohibited.  Except as provided in Section 2.3, the Committee shall not amend any outstanding Option to reduce its exercise price.  Further, the Committee shall not, without the approval of the stockholders, cancel any Option and grant a new Option with a lower exercise price such that the effect would be the same as reducing the exercise price.

(d)$100,000 Limit for Incentive Stock Options.  Notwithstanding an Option’s designation, to the extent that Incentive Stock Options are exercisable for the first time by the Participant during any calendar year with respect to Shares whose aggregate Fair Market Value exceeds $100,000 (regardless of whether such Incentive Stock Options were granted under this Plan, the 2002 Plan, or any other plan of the Company), such Options shall be treated as Nonqualified Stock Options.  For purposes of this Section 6.3(d), Fair Market Value shall be measured as of the date the Option was granted and Incentive Stock Options shall be taken into account in the order in which they were granted.

(e)10% Stockholder.  For purposes of this Section 6.3, a “10% Stockholder” is an individual who, immediately before the date an Award is granted, owns (or is treated as owning) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, determined under Section 424(d) of the Code.

6.4Form of Consideration.  The Committee shall determine the acceptable form of consideration for exercising an Option, including the method of payment.  In the case of an Incentive Stock Option, the Committee shall determine the acceptable form of consideration at the time of grant.  To the extent approved by the Committee, the consideration for exercise of an Option may be paid in any one, or any combination, of the forms of consideration set forth in subsections (a), (b) and (c) below.

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(a)Cash Equivalent.  Consideration may be paid by cash, check or other cash equivalent approved by the Committee.

(b)Tender or Attestation of Shares.  Consideration may be paid by the tendering of other Shares to the Company or the attestation to the ownership of the Shares that otherwise would be tendered to the Company in exchange for the Company’s reducing the number of Shares issuable upon the exercise of the Option.  Shares tendered or attested to in exchange for Shares issued under the Plan must be held by the Participant for at least six months prior to their tender or their attestation to the Company and may not be shares of Restricted Stock at the time they are tendered or attested to.  The Committee shall determine acceptable methods for tendering or attesting to Shares to exercise an Option under the Plan and may impose such limitations and prohibitions on the use of Shares to exercise Options as it deems appropriate.  For purposes of determining the amount of the Option price satisfied by tendering or attesting to Shares, such Shares shall be valued at their Fair Market Value on the date of tender or attestation, as applicable.

(c)Other Methods.  Consideration may be paid using such other methods of payment as the Committee, at its discretion, deems appropriate from time to time.

6.5Exercise of Option.

(a)Procedure for Exercise.  Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as set forth in the Award Agreement.  Each Option shall become exercisable in four equal annual installments commencing on the first anniversary of the date of grant, or in such other installments and at such other intervals as the Committee may in any specific case otherwise determine.  An Option shall be deemed exercised when the Committee receives: (i) written or electronic notice of exercise (in accordance with the Award Agreement) from the person entitled to exercise the Option and (ii) full payment for the Shares (in a form permitted under Section 6.4) with respect to which the Option is exercised.

(b)Termination of Relationship as a Service Provider.  Following a Participant’s Termination of Service, the Participant (or the Participant’s Beneficiary, in the case of Termination of Service due to death) may exercise his or her Option within such period of time as is specified in the Award Agreement, subject to the following conditions:

(i)An Option may be exercised after the Participant’s Termination of Service only to the extent that the Option was vested as of the Termination of Service;

(ii)An Option may not be exercised after the expiration of the term of such Option as set forth in the Award Agreement;

(iii)Unless a Participant’s Termination of Service is the result of the Participant’s Disability, the Participant may not exercise an Incentive Stock Option more than three months after such Termination of Service;

(iv)If a Participant’s Termination of Service is the result of the Participant’s Disability, the Participant may exercise an Incentive Stock Option up to 12 months after Termination of Service; and

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(v)After the Participant’s death, his Beneficiary may exercise an Incentive Stock Option only to the extent that that the deceased Participant was entitled to exercise such Incentive Stock Option as of the date of his death.

In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for three months after the Participant’s Termination of Service for any reason other than Disability or death, and for 12 months after the Participant’s Termination of Service on account of Disability or death.

(c)Rights as a Stockholder.  Shares subject to an Option shall be deemed issued, and the Participant shall be deemed the record holder of such Shares, on the Option exercise date.  Until such Option exercise date, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares subject to the Option.  In the event that the Company effects a split of the Shares by means of a stock dividend and the exercise price of, and number of shares subject to, an Option are adjusted as of the date of distribution of the dividend (rather than as of the record date for such dividend), then a Participant who exercises such Option between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the Shares subject to the Option.  No other adjustment shall be made for a dividend or other right for which the record date is prior to the date the Shares are issued.

6.6Repurchase Rights.  The Committee shall have the discretion to grant Options which are exercisable for unvested Shares.  If the Participant ceases to be a Service Provider while holding such unvested Shares, the Company shall have the right to repurchase any or all of those unvested Shares at a price per share equal to the lower of (i) the exercise price paid per Share, or (ii) the Fair Market Value per Share at the time of repurchase.  The terms upon which such repurchase right shall be exercisable by the Committee (including the period and procedure for exercise and the appropriate vesting schedule for the purchased Shares) shall be established by the Committee and set forth in the document evidencing such repurchase right.

ARTICLE VII.
STOCK APPRECIATION RIGHTS

7.1Terms of Stock Appreciation Right.  The term, base amount, vesting schedule, and other conditions and limitations applicable to each Stock Appreciation Right, except the medium of settlement, shall be as determined by the Committee and shall be stated in the Award Agreement. All Awards of Stock Appreciation Rights shall be settled in Shares issuable upon the exercise of the Stock Appreciation Right.

7.2Exercise of Stock Appreciation Right.

(a)Procedure for Exercise.  Any Stock Appreciation Right granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as set forth in the Award Agreement.  A Stock Appreciation Right shall be deemed exercised when the Committee receives written or electronic notice of exercise (in accordance with the Award Agreement) from the person entitled to exercise the Stock Appreciation Right.

(b)Termination of Relationship as a Service Provider.  Following a Participant’s Termination of Service, the Participant (or the Participant’s Beneficiary, in the case

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of Termination of Service due to death) may exercise his or her Stock Appreciation Right within such period of time as is specified in the Award Agreement to the extent that the Stock Appreciation right is vested as of the Termination of Service.  In the absence of a specified time in the Award Agreement, the Stock Appreciation Right shall remain exercisable for three months following the Participant’s Termination of Service for any reason other than Disability or death, and for 12 months after the Participant’s Termination of Service on account of Disability or death.

(c)Rights as a Stockholder.  Shares subject to a Stock Appreciation Right shall be deemed issued, and the Participant shall be deemed the record holder of such Shares, on the date the Stock Appreciation Right is exercised.  Until such date, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares subject to the Stock Appreciation Right.  If the Company effects a split of the Shares by means of a stock dividend and the exercise price of, and number of shares subject to, a Stock Appreciation Right are adjusted as of the date of distribution of the dividend (rather than as of the record date for such dividend), then a Participant who exercises such Stock Appreciation Right between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the Shares subject to the Stock Appreciation Right.  No other adjustment shall be made for a dividend or other right for which the record date is prior to the date the Shares are issued.

ARTICLE VIII.
RESTRICTED STOCK

8.1Terms of Restricted Stock.  Subject to the provisions of the Plan, the Period of Restriction, the number of Shares granted, and other conditions and limitations applicable to each Award of Restricted Stock shall be as determined by the Committee and shall be stated in the Award Agreement; provided, however, that the Period of Restriction, (i) if time-based, shall be not less than three (3) years and (ii) if based on Performance Objectives, shall be not less than one (1) year.  Unless the Committee determines otherwise, Shares of Restricted Stock shall be held by the Company as escrow agent until the restrictions on such Shares have lapsed.

8.2Transferability.  Except as provided in this Article VIII, Shares of Restricted Stock may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

8.3Other Restrictions.  The Committee, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

8.4Removal of Restrictions.  Except as otherwise provided in this Article VIII, and subject to Section 10.6, Shares of Restricted Stock covered by an Award of Restricted Stock made under the Plan shall be released from escrow, and shall become fully transferable, as soon as practicable after the Period of Restriction ends, and in any event no later than 2½ months after the end of the Tax Year in which the Period of Restriction ends.

8.5Voting Rights.  During the Period of Restriction, Participants holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless otherwise provided in the Award Agreement.

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8.6Dividends and Other Distributions.  During the Period of Restriction, Participants holding Shares of Restricted Stock shall be entitled to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement.

(a)If any such dividends or distributions are paid in Shares, the Shares shall be subject to the same restrictions (and shall therefore be forfeitable to the same extent) as the Shares of Restricted Stock with respect to which they were paid.

(b)If any such dividends or distributions are paid in cash, the Award Agreement may specify that the cash payments shall be subject to the same restrictions as the related Restricted Stock, in which case they shall be accumulated during the Period of Restriction and paid or forfeited when the related Shares of Restricted Stock vest or are forfeited.  Alternatively, the Award Agreement may specify that the dividend equivalents or other payments shall be unrestricted, in which case they shall be paid as soon as practicable after the dividend or distribution date.  In no event shall any cash dividend or distribution be paid later than 2½ months after the Tax Year in which the dividend or distribution becomes nonforfeitable.

8.7Right of Repurchase of Restricted Stock.  If, with respect to any Award, (i) a Participant’s Termination of Service occurs before the end of the Period of Restriction or (ii) any Performance Objectives are not achieved by the end of the period for measuring such Performance Objectives, then the Company shall have the right to repurchase forfeitable Shares of Restricted Stock from the Participant at their original issuance price or other stated or formula price (or to require forfeiture of such Shares if issued at no cost).

ARTICLE IX.
RESTRICTED STOCK UNITS

9.1Terms of Restricted Stock Units.  Subject to the provisions of the Plan, the Period of Restriction, number of underlying Shares, and other conditions and limitations applicable to each Award of Restricted Stock Units shall be as determined by the Committee and shall be stated in the Award Agreement.

9.2Settlement of Restricted Stock Units.  Subject to Section 10.5, the number of Shares specified in the Award Agreement, or cash equal to the Fair Market Value of the underlying Shares specified in the Award Agreement, shall be delivered to the Participant as soon as practicable after the end of the applicable Period of Restriction, and in any event no later than 2½ months after the end of the Tax Year in which the Period of Restriction ends.

9.3Dividend and Other Distribution Equivalents.  The Committee is authorized to grant to holders of Restricted Stock Units the right to receive payments equivalent to dividends or other distributions with respect to Shares underlying Awards of Restricted Stock Units.  The Award Agreement may specify that the dividend equivalents or other distributions shall be subject to the same restrictions as the related Restricted Stock Units, in which case they shall be accumulated during the Period of Restriction and paid or forfeited when the related Restricted Stock Units are paid or forfeited.  Alternatively, the Award Agreement may specify that the dividend equivalents or other distributions shall be unrestricted, in which case they shall be paid on the dividend or distribution payment date for the underlying Shares, or as soon as practicable thereafter.  In no event shall any unrestricted dividend equivalent or other distribution

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be paid later than 2½ months after the Tax Year in which the record date for the dividend or distribution occurs.

9.4Forfeiture.  If, with respect to any Award, (i) a Participant’s Termination of Service occurs before the end of the Period of Restriction, or (ii) any Performance Objectives are not achieved by the end of the period for measuring such Performance Objectives, then the Restricted Stock Units granted pursuant to such Award shall be forfeited and the Company shall have no further obligation thereunder.

ARTICLE X.
ADDITIONAL TERMS OF AWARDS

10.1Change in Control.

(a)Effect.  Upon the occurrence of a Change in Control (as defined below), each outstanding Award shall immediately become exercisable or payable in full (if applicable, and whether or not then exercisable), and any forfeiture and vesting restrictions thereon shall lapse.  Notwithstanding the foregoing, prior to a Change in Control, the Committee may determine that, upon the occurrence of a Change in Control, there shall be no acceleration of benefits under Awards or determine that only certain or limited benefits under Awards shall be accelerated and the extent to which they shall be accelerated, and/or establish a different time in respect of such event for such acceleration.  In that event, the Committee will make provision in connection with such transaction for the continuance of the Plan and the assumption of Options and Awards theretofore granted, or the substitution for such Options and Awards with new options and awards covering the stock of a successor employer corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices.  In addition, the Committee may override the limitations on acceleration in this Section 10.1(a) by express provision in the Award Agreement and may accord any Participant the right to refuse any acceleration, whether pursuant to the Award Agreement or otherwise, in such circumstances as the Committee may approve.  Any acceleration of Awards shall comply with applicable regulatory requirements, including without limitation Section 422 of the Code.

(b)Defined.  For purposes of this Plan, a “Change in Control” shall be deemed to have occurred if:

(i)any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates) representing 30% or more of the combined voting power of the Company’s then outstanding securities;

(ii)the date when Continuing Directors cease to be a majority of the members of the Board then in office;

(iii)the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, which merger or consolidation is consummated, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in combination with newly acquired ownership acquired in such

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transaction by any trustee or other fiduciary holding securities under an employee benefit plan of the Company or an Affiliate, at least 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquires more than 50% of the combined voting power of the Company’s then outstanding securities; or

(iv)the stockholders of the Company approve a complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, which liquidation, sale or disposition is consummated.

(c)Other Terms.  For purposes of Section 10.1(b), the following terms shall have the following meanings:

(i)“Affiliate” shall mean any entity that directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Company as determined by the Board in its discretion.

(ii)“Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act.

(iii)“Continuing Directors” shall mean the persons who constitute the Board on the date hereof together with their successors whose nominations were approved by a majority of Continuing Directors.

(iv)“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(v)“Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company or any of its Affiliates, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, and (iv) any corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportion as their ownership of stock of the Company.

10.2Transferability of Awards.  Except as provided below, a Participant’s rights under an Award may not be transferred or encumbered, except by will or by the laws of descent and distribution or, in the case of Awards other than Incentive Stock Options, pursuant to a qualified domestic relations order (as defined under Section 414(p) the Code).  The Committee may provide, in an Agreement for a Nonqualified Stock Option or Restricted Stock Award, for its transferability as a gift to family members, one or more trusts for the benefit of family members, or one or more partnerships of which family members are the only partners, according to such terms as the Committee may determine; provided that the Participant receives no consideration for the transfer and the transferred Nonqualified Stock Option or Restricted Stock Award shall continue to be subject to the same terms and conditions as were applicable to the Nonqualified Stock Option or Restricted Stock Award immediately before the transfer.

10.3Effect of Termination of Employment.  The Committee shall establish in respect of each Award Granted to an Employee the effect of a termination of employment on the

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rights and benefits thereunder and in so doing may make distinctions based upon the cause of termination, e.g. retirement, early retirement, termination for cause, disability or death.  Notwithstanding any terms to the contrary in an Award Agreement or this Plan, the Committee may decide in its complete discretion to extend the exercise period of an Award (although not beyond the period described in Section 6.3(a)) and the number of Shares covered by the Award with respect to which the Award is exercisable or vested.

10.4No Fractional Shares.  No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Award.  The Committee shall determine whether cash shall be paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

10.5No Effect on Employment or Service.  Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company; nor shall they interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws and any enforceable agreement between the Service Provider and the Company.

10.6Conditions On Delivery of Shares and Lapsing of Restrictions.  The Company shall not be obligated to deliver any Shares pursuant to the Plan or to remove restrictions from Shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Committee, (ii) subject to approval of the Company’s counsel, all other legal matters (including any Applicable Laws) in connection with the issuance and delivery of such Shares have been satisfied, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Committee may consider appropriate to satisfy the requirements of Applicable Laws.

10.7Inability to Obtain Authority.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

10.8Withholding.  All distributions or payments made with respect to an Award shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements.  The Company may require a Participant to remit to it or to the subsidiary that employs a Participant an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for Common Stock.  In lieu thereof, the Company or the employing corporation shall have the right to withhold the amount of such taxes from any other sums due or to become due to the Participant as the Company shall prescribe.  The Committee may, in its discretion and subject to such rules as it may adopt, permit a Participant to pay all or a portion of the federal, state and local withholding taxes arising in connection with any Award by electing to have the Company withhold shares of Common Stock deliverable thereunder having a Fair Market Value that is not in excess of the amount of tax to be withheld.

10.9Other Provisions.  In addition to the provisions described in the Plan, any Award Agreement may include such other provisions (whether or not applicable to the Award of

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any other Participant) as the Committee determines appropriate, including restrictions on resale or other disposition and provisions to comply with Applicable Laws.

10.10Section 16 of the Exchange Act.  It is the intent of the Company that Awards and transactions permitted by Awards be interpreted in a manner that, in the case of Participants who are or may be subject to Section 16 of the Exchange Act, qualify, to the maximum extent compatible with the express terms of the Awards, for exemption from matching liability under Rule 16b-3 promulgated under the Exchange Act.  The Company shall have no liability to any Participant or other person for Section 16 consequences of Awards or events in connection with Awards if an Award or related event does not so qualify.

10.11Not Benefit Plan Compensation.  Payments and other benefits received by a Participant under an Award made pursuant to the Plan shall not be deemed a part of a Participant’s compensation for purposes of determining the Participant’s benefits under any other employee benefit plans or arrangements provided by the Company, except where the Committee expressly provides otherwise in writing.

ARTICLE XI.
TERM, AMENDMENT AND TERMINATION OF PLAN

11.1Term of Plan.  The Plan shall become effective on the Effective Date.

11.2Termination of the Plan.  The Plan shall terminate upon the earliest to occur of (i) the date that is 10 years after the Plan is approved by the Company’s stockholders; (ii) the date on which all Shares available for issuance under the Plan have been issued as fully vested Shares; or (iii) the date determined by the Board pursuant to its authority under Section 11.3.

11.3Amendment of the Plan.  The Board or the Committee may at any time amend, alter, suspend or terminate the Plan, without the consent of the Participants or Beneficiaries.  The Company shall obtain stockholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.

11.4Effect of Amendment or Termination.  Except as provided in Section 11.5 of the Plan, no amendment, alteration, suspension or termination of the Plan shall impair the rights of any Participant or Beneficiary under an outstanding Award, unless required to comply with an Applicable Law or mutually agreed otherwise between the Participant and the Committee; any such agreement must be in writing and signed by the Participant and the Company.  Termination of the Plan shall not affect the Committee’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

11.5Adjustments of Awards Upon the Occurrence of Unusual or Nonrecurring Events.  The Committee may, in its sole discretion (but subject to the limitations and conditions expressly stated in the Plan, such as the limitations on adjustment of Performance Objectives), adjust the terms and conditions of Awards during the pendency or in recognition of (i) unusual or nonrecurring events affecting the Company (such as a capital adjustment, reorganization or merger) or the financial statements of the Company, or (ii) any changes in Applicable Laws or accounting principles.  By way of example, the power to adjust Awards shall include the power to suspend the exercise of any Option or Stock Appreciation Right.

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ARTICLE XII.
MISCELLANEOUS

12.1Governing Law.  This Plan, Awards granted hereunder and actions taken in connection with the Plan shall be governed by the laws of the State of Delaware regardless of the law that might otherwise apply under applicable principles of conflicts of laws.

12.2Authorization of Sub-Plans.  The Committee may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities and/or tax laws of various jurisdictions.  The Committee shall establish such sub-plans by adopting supplements to this Plan containing (i) such limitations as the Committee deems necessary or desirable, and (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Committee shall deem necessary or desirable.  All sub-plans adopted by the Committee shall be deemed to be part of the Plan, but each sub-plan shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any sub-plans to Participants in any jurisdiction which is not the subject of such sub-plan.

12.3Expenses.  The costs of administering the Plan shall be paid by the Company.

12.4Severability.  If any provision of the Plan or any Award Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any jurisdiction, or as to any person or Award, such provision shall be construed or deemed to be amended to resolve the applicable infirmity, unless the Committee determines that it cannot be so construed or deemed amended without materially altering the Plan or the Award, in which case such provision shall be stricken as to such jurisdiction, person, or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

12.5Construction.  Unless the contrary is clearly indicated by the context, (i) the use of the masculine gender shall also include within its meaning the feminine and vice versa; (ii) the use of the singular shall also include within its meaning the plural and vice versa; and (iii) the word “include” shall mean to include, but not to be limited to.

12.6No Trust or Fund Created.  Neither the Plan nor any Award Agreement shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person.  To the extent that any person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no more secure than the right of any unsecured general creditor of the Company.

12.7Headings.  Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

12.8Complete Statement of Plan.  This document is a complete statement of the Plan.

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APPENDIX

As used in the Plan, the following terms shall have the following meanings:

“10% Stockholder” has the meaning set forth in Section 6.3(e).

“2002 Plan” has the meaning set forth in Section 1.1.

“Acquired Company” has the meaning set forth in Section 2.1(e).

“Applicable Laws” means the requirements relating to, connected with, or otherwise implicated by the administration of long-term incentive plans under applicable state corporation laws, United States federal and state securities laws, the Code, any stock exchange or quotation system on which the Shares are listed or quoted, and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.

“Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, or other equity-based awards.

“Award Agreement” means a written agreement setting forth the terms and provisions applicable to an Award granted under the Plan.  Each Award Agreement shall be subject to the terms and conditions of the Plan.

“Beneficiary” means the personal representative of the Participant’s estate or the person(s) to whom an Award is transferred pursuant to the Participant’s will or in accordance with the laws of descent or distribution.

“Board” means the board of directors of the Company.

“Code” means the Internal Revenue Code of 1986, as amended.  Any reference to a section of the Code herein shall be a reference to any regulations or other guidance of general applicability promulgated under such section, and shall further be a reference to any successor or amended section of such section of the Code that is so referred to and any regulations thereunder.

“Committee” means the Compensation Committee of the Board, which has been constituted by the Board to comply with the requirements of Rule 16b-3 promulgated under the Exchange Act, Section 162(m) of the Code, and/or other Applicable Laws.

“Company” means Tetra Tech, Inc., a Delaware corporation, or any successor thereto.

“Consultant” means any natural person, including an advisor, engaged by the Company to render services to the Company.

“Director” means a member of the Board.

“Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.

“Effective Date” means November 14, 2005; provided that the Plan and any Awards granted hereunder shall be null and void if the Plan is not approved by the Company’s stockholders before any compensation under the Plan is paid.

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“Employee” means any person who is an employee, as defined in Section 3401(c) of the Code, of the Company or any other entity the employees of which are permitted to receive Incentive Stock Options under the Code.  Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Executive Officer” means an individual who is an “executive officer” of the Company (as defined by Rule 3b-7 under the Exchange Act) or a “covered employee” under Section 162(m) of the Code.

“Fair Market Value” means, with respect to Shares as of any date the closing sale price per share of such Shares (or the closing bid, if no sales were reported) as reported in The Wall Street Journal (Northeast edition) or, if not reported therein, such other source as the Committee deems reliable.

“Full-Value Awards” has the meaning set forth in Section 2.1(d).

“Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

“Nonqualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

“Option” means an option to purchase Shares that is granted pursuant to Article VI of the Plan.  An Option may be an Incentive Stock Option or a Nonqualified Stock Option.

“Participant” has the meaning set forth in Section 4.1.

“Performance Objective” means a performance objective or goal that must be achieved before an Award, or a feature of an Award, becomes nonforfeitable, as described in Section 5.3 of the Plan.

“Period of Restriction” means the period during which Restricted Stock, the remuneration underlying Restricted Stock Units or any other feature of an Award is subject to a substantial risk of forfeiture.  A Period of Restriction shall be deemed to end when the applicable Award ceases to be subject to a substantial risk of forfeiture.

“Plan” has the meaning set forth in Section 1.1.

“Reporting Person” means an officer or director of the Company or greater than ten percent stockholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange Act.

“Restricted Stock” means Shares that, during a Period of Restriction, are subject to restrictions as described in Article VIII of the Plan.

“Restricted Stock Unit” means an Award that entitles the recipient to receive Shares or cash after a Period of Restriction, as described in Article IX of the Plan.

“Service Provider” means an Employee, Director or Consultant.

“Share” means a share of the Company’s common stock.

“Stock Appreciation Right” means an Award that entitles the recipient to receive, upon exercise, the excess of (i) the Fair Market Value of a Share on the date the Award is

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exercised, over (ii) a base amount specified by the Committee which shall not be less than the Fair Market Value of a Share on the date the Award is granted, as described in Article VII of the Plan.

“Tax Year” means the Company’s taxable year.

“Termination of Service” means the date an individual ceases to be a Service Provider.  Unless the Committee or a Company policy provides otherwise, a leave of absence authorized by the Company or the Committee (including sick leave or military leave) from which return to service is not guaranteed by statute or contract shall be characterized as a Termination of Service if the individual does not return to service within three months; such Termination of Service shall be effective as of the first day that is more than three months after the beginning of the period of leave.  If the ability to return to service upon the expiration of such leave is guaranteed by statute or contract, but the individual does not return, the leave shall be characterized as a Termination of Service as of a date established by the Committee or Company policy.

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EX-99.1

Exhibit 99.1

Tetra Tech Reports Fourth Quarter Results

Pasadena, California.  Tetra Tech, Inc. (NASDAQ: TTEK) today announced results for the fourth quarter ended October 2, 2005.  In the quarter, diluted earnings per share was $0.16.  In the fourth quarter, the Company accounted for the divesture of three non-core business units.  The effect of these divestitures is shown as discontinued operations.  In the fourth quarter, diluted earnings per share from continuing operations was $0.22.  Revenue from continuing operations was $351.2 million, and revenue, net of subcontractor costs was $230.4 million in the quarter.  Cash generated from operations was approximately $30 million in the fourth quarter.

Fourth Quarter Results

Revenue for the fourth quarter was $351.2 million, down 7.4% from $379.3 million for the same quarter last year, primarily due to the exit from wireless communications and reductions in non-core business during fiscal 2005.  Revenue, net of subcontractor costs, for the quarter was $230.4 million, down 10.3% from $257.0 million for the same quarter last year.  Income from operations for the fourth quarter was $18.2 million compared to a loss of $11.7 million for the same period last year.  Loss from discontinued operations, net of tax, was $3.4 million versus $2.4 million for the same period last year.  Net income for the fourth quarter was $9.1 million compared to a net loss of $11.3 million for the same period last year.  Diluted earnings per share from continuing operations was $0.22 compared to a loss of $0.16 for the same period last year.  Diluted loss per share from discontinued operations was $0.06 versus $0.04 last year.  Overall, diluted earnings per share was $0.16 compared to a loss of $0.20 last year.  Of the three discontinued operations, one divestiture was completed during the fourth quarter, and the others are expected to be completed in the first half of fiscal 2006.

Twelve-Month Results

Revenue for the fiscal year ended October 2, 2005 was $1.3 billion, down 6.5% from $1.4 billion for the same period last year, primarily due to the exit from wireless communications and reductions in non-core business during fiscal 2005.  Revenue, net of subcontractor costs, for fiscal 2005 was $899.2 million, a decrease of 7.8%, from $975.2 million for fiscal 2004.  Including the non-cash impairment charge of $105.6 million, loss from operations for fiscal 2005 was $113.7 million compared to income of $49.6 million for the same period last year.  Loss from discontinued operations, net of tax, was $0.8 million versus income of $0.3 million for the same period last year.  Net loss for fiscal 2005 was $99.5 million compared to net income of $23.7 million for the same period last year.  Diluted loss per share from continuing operations was $1.74 compared to earnings of $0.41 per share for fiscal 2004.  Diluted loss per share from discontinued operations was $0.01 versus $0.0 last year.  Overall, diluted loss per share was $1.75 versus net diluted earnings per share of $0.41 last year.

In thousands, except EPS (preliminary)

	Three Months Ended						Twelve Months Ended
	Oct. 2, 2005			Oct. 3, 2004			Oct. 2, 2005*			Oct. 3, 2004
Revenue	$	351,184		$	379,252		$	1,286,031		$	1,376,159
Revenue, Net of Subcontractor Costs	230,424			257,004			899,179			975,209
Income/(Loss) from Operations	18,246			(11,707		)	(113,667		)	49,647
Income/(Loss) from Continuing Operations	12,469			(8,879		)	(98,678		)	23,469
Income/(Loss) from Discontinued Operations, Net of Tax	(3,413		)	(2,382		)	(791		)	272
Net Income/(Loss)	9,056			(11,260		)	(99,469		)	23,742
Basic Earnings (Loss) Per Share:
Income (Loss) from Continuing Operations	$	0.22		$	(0.16	)	$	(1.74	)	$	0.42
Income (Loss) from Discontinued Operations	(0.06		)	(0.04		)	(0.01		)	—
Net Income (Loss)	$	0.16		$	(0.20	)	$	(1.75	)	$	0.42
Diluted Earnings (Loss) Per Share:
Income (Loss) from Continuing Operations	$	0.22		$	(0.16	)	$	(1.74	)	$	0.41
Income (loss) from Discontinued Operations	(0.06		)	(0.04		)	(0.01		)	—
Net Income (Loss)	$	0.16		$	(0.20	)	$	(1.75	)	$	0.41
Weighted Average Common Shares Outstanding:
Basic	57,026			56,382			56,736			55,969
Diluted	57,546			56,382			56,736			57,288

*Results include a non-cash impairment charge in the second quarter of fiscal 2005 of $105.6 million for goodwill and other identifiable intangible assets.

Business Outlook

The following projections are based on current expectations.  These projections are forward-looking and the actual results could differ materially.  These projections do not include the potential impact of acquisitions or other similar transactions that may be completed after the date of this release.  As previously disclosed, theCompany continues to exit from its non-core

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construction-related business and is continuing its investigation of certain possible irregular activities at one of its operating units.  Although absolute assurance cannot be given at this time, the Company does not believe that the completion of this investigation will require material changes to its financial statements.  The Business Outlook section should be read in conjunction with the information on forward-looking statements at the end of this release.

The divestiture of non-core business will reduce fiscal 2006 revenue, net of subcontractor costs, by approximately 15%.  Tetra Tech expects diluted earnings per share for the first quarter of fiscal 2006 to be in the range of $0.14 to $0.16 before the effect of FASB 123R.  Revenue, net of subcontractor costs, for the first quarter is expected to range from $215 million to $225 million.  For fiscal 2006, Tetra Tech expects diluted earnings per share to be in the range of $0.68 to $0.75 before the effect of FASB 123R.  Revenue, net of subcontractor costs, for fiscal 2006 is expected to range from $850 million to $950 million.

The Company continues to examine the effect of FASB 123R, which is expected to be approximately $0.09 to $0.10 diluted earnings per share during fiscal 2006.

Webcast

Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the third quarter results through a link posted on the Company’s web site at www.tetratech.com on November 17, 2005 at 8:00 a.m. (PDT).

About Tetra Tech (www.tetratech.com)

Tetra Tech is a leading provider of consulting, engineering and technical services.  With over 7,000 associates located in the United States and internationally, the Company supports commercial and government clients in the areas of resource management and infrastructure.  Tetra Tech’s services include research and development, applied science and technology, engineering design, program management, construction management, and operations and maintenance.

CONTACT: Mike Bieber at (626) 351-4664

Forward-Looking Statements

This news release contains forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include information concerning future events and the future financial performance of Tetra Tech that involve risks and uncertainties.  Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results.  Readers are urged to read the documents filed by Tetra Tech with the SEC, specifically the most recent reports on Form 10-K, 10-Q and 8-K, each as it may be amended from time to time, which identify risk factors that could cause actual results to differ materially from the forward-looking statements.  Among the important factors or risks that could cause actual results or events to differ materially from those in the forward-looking statements in this release are: fluctuations in quarterly operating results; the impact of downturns in the financial markets and reductions in government budgets; volatility of common stock value; concentration of revenues from government agencies and funding disruptions by these agencies; failure to properly manage projects; acquisition strategy risks; management of growth strategy; use of the percentage-of-completion method of accounting; adverse resolution of an IRS examination; loss of key

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personnel or the inability to attract and retain qualified personnel; implementation of the enterprise resource planning system; international operations risks; credit risks associated with commercial clients; violations of government contractor regulations; competitive bidding for government contracts; the affect of a negative government audit; the inability to accurately estimate contract risks, revenue and costs; backlog cancellation and adjustments; client base consolidation; failure of partners to perform on joint projects; inability to find qualified subcontractors; changes in existing environmental laws, regulations or programs; competition; restrictive covenants in debt agreements; risks of professional and other liabilities; adverse resolution of litigation; conflict of interest issues; changes in accounting for equity-related compensation; expenses associated with corporate governance; and disruption of operations due to computer viruses or terrorism.  Any projections in this release are based on limited information currently available to Tetra Tech, which is subject to change.  Although any such projections and the factors influencing them will likely change, Tetra Tech will not necessarily update the information, since Tetra Tech will only provide guidance at certain points during the year.  Readers should not place undue reliance on forward-looking statements since such information speaks only as of the date of this release.

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TETRA TECH, INC.

Condensed Consolidated Statements of Operations

(Unaudited - in thousands, except per share data)

	Three Months Ended							Twelve Months Ended
	October 2, 2005			October 3, 2004			% Change	October 2, 2005			October 3, 2004			% Change
Revenue	$	351,184		$	379,252		-7.4	$	1,286,031		$	1,376,159		-6.5
Subcontractor costs	120,760			122,248			-1.2	386,852			400,950			-3.5
Revenue, net of subcontractor costs	230,424			257,004			-10.3	899,179			975,209			-7.8
Other contract costs	183,919			238,187			-22.8	791,788			823,950			-3.9
Gross profit	46,505			18,817			147.1	107,391			151,259			-29.0
Selling, general and administrative expenses	28,259			30,524			-7.4	115,446			101,612			13.6
Impairment of goodwill and other intangible assets	—			—			—	105,612			—			—
Income (loss) from operations	18,246			(11,707		)	255.9	(113,667		)	49,647			-329.0
Interest expense - net	2,338			2,691			-13.1	11,163			9,675			15.4
Income (loss) from continuing operations before income tax expense	15,908			(14,398		)	210.5	(124,830		)	39,972			-412.3
Income tax expense (benefit)	3,439			(5,519		)	162.3	(26,152		)	16,503			-258.5
Income (loss) from continuing operations	12,469			(8,879		)	240.4	(98,678		)	23,469			-520.5
Income (loss) from discontinued operations, net of tax (1)	(3,413		)	(2,381		)	43.3	(791		)	273			-389.7
Net income (loss)	$	9,056		$	(11,260	)	180.4	$	(99,469	)	$	23,742		-519.0
Basic earnings (loss) per share:
Income (loss) from continuing operations	$	0.22		$	(0.16	)	237.5	$	(1.74	)	$	0.42		(514.3	)
Income (loss) from discontinued operations, net of tax	(0.06		)	(0.04		)	41.7	(0.01		)	0.00			(385.8	)
Net income (loss)	$	0.16		$	(0.20	)	180.0	$	(1.75	)	$	0.42		(516.7	)
Diluted earnings (loss) per share:
Income (loss) from continuing operations	$	0.22		$	(0.16	)	237.5	$	(1.74	)	$	0.41		(524.4	)
Income (loss) from discontinued operations, net of tax	(0.06		)	(0.04		)	40.4	(0.01		)	0.00			(392.6	)
Net income (loss)	$	0.16		$	(0.20	)	180.0	$	(1.75	)	$	0.41		(526.8	)
Weighted average common shares outstanding:
Basic	57,026			56,382			1.1	56,736			55,969			1.4
Diluted	57,546			56,382			2.1	56,736			57,288			-1.0
Percentage of revenue, net of subcontractor costs:
Revenue, net of subcontractor costs	100.0		%	100.0		%		100.0		%	100.0		%
Other contract costs	79.8		%	92.7		%		88.1		%	84.5		%
Gross profit	20.2		%	7.3		%		11.9		%	15.5		%
Selling, general and administrative expenses	12.3		%	11.9		%		12.8		%	10.4		%
Impairment of goodwill and other intangible assets	0.0		%	0.0		%		11.7		%	0.0		%
Income (loss) from operations	7.9		%	-4.6		%		-12.6		%	5.1		%
Interest expense - net	1.0		%	1.0		%		1.2		%	1.0		%
Income (loss) from continuing operations before income tax expense	6.9		%	-5.6		%		-13.8		%	4.1		%
Income tax expense (benefit)	1.5		%	-2.1		%		-2.9		%	1.7		%
Income (loss) from continuing operations	5.4		%	-3.5		%		-10.9		%	2.4		%

(1) Net of tax of $2.2 million and tax of $0.5 million for the three months and twelve months ended October 2, 2005.  Net of tax benefit of $1.1 million and tax expense of $0.2 million for the three months and twelve months ended October 3, 2004.  Fiscal 2005 includes $0.9 million pre-tax or $2.4 million after-tax for the gain on disposal of discontinued operations for the three and twelve month periods.

TETRA TECH, INC.

Condensed Consolidated Balance Sheets

(in thousands, except par value)

	October 2, 2005			October 3, 2004
Assets
Current Assets:
Cash and cash equivalents	$	26,174		$	43,212
Accounts receivable - net	315,364			357,181
Prepaid expenses and other current assets	21,139			22,134
Income tax receivable	14,141			6,774
Current assets of discontinued operations	14,037			23,367
Total current assets	390,855			452,668
Property and equipment:
Equipment, furniture, and fixtures	73,260			79,900
Leasehold improvements	9,021			9,266
Total	82,281			89,166
Accumulated depreciation and amortization	(50,498		)	(51,374		)
Property and equipment - net	31,783			37,792
Deferred income taxes	7,431			—
Income tax receivable	33,800			33,800
Goodwill	159,175			254,553
Intangible and other assets - net	18,832			25,400
Noncurrent assets of discontinued operations	6,167			4,295
Total assets	$	648,043		$	808,508
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts Payable	$	91,750		$	103,511
Accrued compensation	51,306			54,812
Billing in excess of costs	48,611			28,941
Deferred income taxes	5,125			4,891
Current portion of long-term obligations	17,800			58,868
Other current liabilites	47,391			47,436
Current liabilities of discontinued operations	7,260			9,381
Total current liabilities	269,243			307,840
Deferred income taxes	—			10,823
Long-term obligations	74,138			92,062
Noncurrent liabilities of discontinued operations	47			283
Commitments and contingencies
Stockholders’ Equity:
Preferred stock - authorized, 2,000 shares of $0.01 par value; no shares issued and outstanding as of October 2, 2005 and October 3, 2004	—			—
Exchangeable Stock of subsidiary	—			1,426
Common stock - authorized, 85,000 shares of $0.01 par value; issued and outstanding 57,048 and 56,305 shares as of October 2, 2005 and October 3, 2004, respectively	570			563
Additional Paid in Capital	251,112			243,490
Accumulated other comprehensive income	757			375
Retained earnings	52,176			151,646
Total stockholders’ equity	304,615			397,500
Total liabilities and stockholders’ equity	$	648,043		$	808,508

EX-99.2

Exhibit 99.2

November 16, 2005

Tetra Tech Selects Dan Batrack

to Succeed Li-San Hwang as CEO

Pasadena, California.  Tetra Tech, Inc.’s (NASDAQ:  TTEK) Chairman, Li-San Hwang, announced today that he will retire as Chief Executive Officer (CEO), effective immediately, and remain Chairman of the Board until the 2006 Annual Meeting of Stockholders.  The Board of Directors has unanimously elected Dan Batrack, the Company’s Executive Vice President and Chief Operating Officer (COO), to succeed Dr. Hwang as CEO.  Mr. Batrack will also maintain the position of COO and has been elected to the Board of Directors.

“After a thorough and professional selection process, comparing both internal and external candidates against our criteria for CEO, I am pleased to announce the selection of Dan Batrack as the Company’s next CEO,” said Dr. Hwang.  “Tetra Tech is fortunate to have among its executives an individual of Dan Batrack’s caliber — someone who has proven business acumen and a deep knowledge of Tetra Tech’s business and strategy, and who embodies the Company’s values.  Dan’s 25 years at Tetra Tech and outstanding performance as COO make him an ideal candidate and logical successor.  I am pleased with the management team’s progress and teamwork this past year, and I feel that I can now retire with the confidence that Tetra Tech will continue to reach new levels of financial and technical success.”

To facilitate a smooth transition, Dr. Hwang will remain Chairman of the Board until the Annual Meeting of Stockholders on March 6, 2006.  Al Smith will continue as the Company’s Vice Chairman, Sam Box will continue as President, David King will continue as Chief Financial Officer, and the rest of the management team will continue in their current roles.

Commenting on his appointment and the leadership transition, Mr. Batrack said, “Li-San has been my life and business mentor throughout my entire career.  My deep respect for the lessons he taught me will guide my vision for Tetra Tech’s future.  I look forward to continuing my work with Sam and the rest of the management team, and I will lead the short-term focus on margin improvement and long-term focus on growth.  We are on track to complete our exit from higher risk businesses and contracts before January and have all of the makings for a solid FY’06.”

Dr. Hwang has led a distinguished career of nearly 40 years at Tetra Tech.  After coming to the United States from China, he received his PhD from the California Institute of Technology, and soon became one of the world’s leading experts in tsunamis and large wave science.  He founded the Water Management Group within Tetra Tech and then led its buyback from Honeywell in 1988, taking Tetra Tech public in 1991.  Since then, the Company has grown by more than 25 times, and now employs more than 7,000 people.

About Tetra Tech (www.tetratech.com)

Tetra Tech is a leading provider of consulting, engineering and technical services.  With more than 7,000 associates located in the United States and internationally, the Company supports commercial and government clients in the areas of resource management and infrastructure.  Tetra Tech’s services include research and development, applied science and technology, engineering design, program management, construction management, and operations and maintenance.

CONTACT: Mike Bieber, (626) 351-4664

Any statements made in this release that are not based on historical fact are forward-looking statements.  Any forward-looking statements made in this release represent management’s best judgment as to what may occur in the future.  However, Tetra Tech’s actual outcome and results are not guaranteed and are subject to certain risks, uncertainties and assumptions (“Future Factors”), and may differ materially from what is expressed.  For a description of Future Factors that could cause actual results to differ materially from such forward-looking statements, see the discussion under the section “Risk Factors” included in the Company’s Form 10-K and 10-Q filings with the Securities and Exchange Commission.

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