10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2005

Commission File Number 0-30911

THE PBSJ CORPORATION

(Exact name of Registrant as specified in its charter)

Florida	59-1494168
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)

5300 West Cypress Street, Suite 200

Tampa, Florida 33607

(Address of principal executive offices)

(813) 282-7275

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock ($.00067 Par Value)

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    ¨  Yes    x  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    ¨   Yes     x   No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filings for the past 90 days.    ¨  Yes    x  No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K.    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

¨  Large accelerated filer    ¨  Accelerated filer    x  Non-accelerated filer

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

The number of shares of Common Stock outstanding as of December 31, 2006 was 6,812,200. The aggregate value of the voting stock held by non-affiliates of the registrant based on the $28.00 price for the registrant’s Common Stock on March 31, 2005 was approximately $82,444,008. Directors, executive officers and 10% or greater shareholders are considered affiliates for purposes of this calculation but should not necessarily be deemed affiliates for any other purpose. There is no public trading market for the registrant’s common stock.

Form 10-K

For the Year Ended September 30, 2005

Table of Contents

Item Number	CAPTION	PAGE
PART 1:
Item 1.	Business	3
Item 1A.	Risk Factors	18
Item 1B.	Unresolved Staff Comments	24
Item 2.	Properties	24
Item 3.	Legal Proceedings	25
Item 4.	Submission of Matters to a Vote of Security Holders	27
PART II:
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
Item 6.	Selected Financial Data	29
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	54
Item 8.	Financial Statements and Supplementary Data	55
Item 9.	Changes in and Disagreements With Accountants on Accounting Financial Disclosure	97
Item 9A.	Controls and Procedures	97
Item 9B.	Other Information	100
PART III:
Item 10.	Directors and Executive Officers of the Registrant	101
Item 11.	Executive Compensation	106
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	109
Item 13.	Certain Relationships and Related Transactions	110
Item 14.	Principal Accountant Fees and Services	110
PART IV:
Item 15.	Exhibits and Financial Statement Schedules	112
	Signatures	113
	Exhibit Index	114

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report and the information incorporated by reference in it include and are based on “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in these sections. These statements can sometimes be identified by the fact that they do not relate strictly to historical or current facts and they frequently are accompanied by words such as “may,” “will,” “anticipate,” “estimate,” “expect,” or “intend” and similar terms and expressions. All statements regarding our expected financial position and operating results, our business strategy, our financing plans and forecasted demographic and economic trends relating to our industry, and statements relating to our ability to be awarded government contracts, the adoption of certain laws by Congress, our ability to compete effectively with other firms that provide similar services, our ability to attract and retain clients, our ability to achieve future growth and success, our expectations for the public and private sector economic growth, the outcome of our internal investigation and the various on-going government investigations, are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. We cannot promise you that our expectations in such forward-looking statements will turn out to be correct. Factors that may impact such forward-looking statements include, among others, our ability to attract additional business, the timing of projects and the potential for contract cancellation by our customers, our ability to attract and retain skilled employees, our ability to comply with new laws and regulations, our insurance coverage covering certain events, the timing and amount of the spending bills adopted by the federal government and the states, our ability to complete our internal investigation in a timely matter, the outcome of the investigations by the Department of Justice, the United States Attorney’s Office, the Securities and Exchange Commission, the Federal Bureau of Investigation, possible changes in collections of accounts receivable, risks of competition, changes in general economic conditions and interest rates, the risk that the Internal Revenue Service or the courts may not accept the amount or nature of one or more items of deduction, loss, income or gain we report for tax purposes and the possible outcome of pending litigation, legal proceedings and governmental investigations and our actions in connection with such litigation, proceedings and investigations, as well as certain other risks including those set forth under the heading “Risk Factors” and elsewhere in this Annual Report and in other reports filed by the Company with the Securities and Exchange Commission. All forward-looking statements included herein are only made as of the date such statements are made, and we do not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Subsequent written and oral forward-looking statements attributable to the Company or to persons acting on its behalf are qualified in their entirety to the cautionary statements set forth above and elsewhere in this Annual Report and in other reports filed by the Company with the Securities and Exchange Commission.

PART I

ITEM 1. Business

General

The PBSJ Corporation (the “Company”), together with its subsidiaries, is an employee-owned professional services organization that provides a broad range of planning, design and construction services to a variety of public and private sector clients. Our four major business segments are transportation services, environmental services, civil engineering and construction management, representing 39%, 22%, 22%, and 17%, respectively, of our fiscal year ended September 30, 2005 revenues. We utilize our expertise in engineering, planning, management, environmental, architectural and surveying disciplines to address complex problems in each of these basic service areas. We provide these services through our staff of approximately 3,800 professional, technical and support personnel. We believe our multi-disciplinary approach to problems facilitates our ability to effectively meet the needs of our clients.

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Since our founding in 1960, we have grown from a small civil engineering practice with operations only in South Florida to a national design firm offering a full range of engineering, construction management, architectural and planning services throughout the United States. Evidencing this, in 2005, Engineering News-Record ranked Post, Buckley, Schuh & Jernigan, Inc., a subsidiary of the Company, third on its list of the top 100 pure design firms (traditional design firms with no construction capability) in the United States, based on design revenue. During fiscal 2005, we provided services to approximately 3,000 clients in the public and private sectors. Approximately 90% of our clients had previously used our services. In fiscal 2005, 77% of our net earned revenues (“NER”) were derived from the public sector and 23% from the private sector.

We have built an organization composed of highly skilled professionals and top-level technical and administrative personnel with a wide variety of scientific, engineering, architectural and management resources. These resources enable us to develop and implement innovative long-term solutions to the complex problems of our clients, many of which are the subject of public concern and extensive governmental regulation. We assist our clients in responding to these concerns, in obtaining governmental permits and approvals and in complying with applicable laws and regulations.

We began operations on February 29, 1960. Our holding company, The PBSJ Corporation, was incorporated in 1973. We engage in business primarily through two wholly-owned subsidiaries: Post, Buckley, Schuh & Jernigan, Inc., a Florida corporation (through which we provide the majority of our engineering, architectural and planning services) and PBS&J Construction Services, Inc., a Florida corporation (through which we have certain large contracts for our construction management services). In addition, we have three other active subsidiaries: Seminole Development Corporation and Seminole Development II, Inc. (through which we hold title to certain of our real property); and PBS&J Caribe Engineering, C.S.P. (through which we perform certain work in Puerto Rico). In this Form 10-K, all references to “PBSJ”, the “Company”, “us”, “we” or “our” operations refer to The PBSJ Corporation and its wholly-owned subsidiaries and the activities of these entities on a consolidated basis. Our executive offices are located at 5300 West Cypress Street, Suite 200, Tampa, Florida.

Restatement of Financial Statements

In March 2005, subsequent to the issuance of the Company’s 2004 financial statements, we discovered misappropriations of Company funds by our former Chief Financial Officer and two former employees who worked in our information systems and treasury departments, collectively, (“the participants”). The participants colluded and circumvented controls to misappropriate funds and conceal the misappropriations possibly beginning as early as 1993 until the misappropriations were discovered.

Shortly after this discovery, an investigation sub-committee was formed comprised of the three outside members of our Corporate Audit Committee. These three outside members were subsequently appointed to the Board of Directors and became the three members of the Audit Committee of the Board of Directors. The Audit Committee retained independent counsel to conduct an investigation and advise the Audit Committee in connection with the investigation. The independent counsel retained forensic accountants, including accountants experienced in conducting forensic audits for companies that perform contracts for federal, state and local governments to assist with the investigation.

The investigation team discovered that at least $36.6 million was misappropriated between January 1, 1998 and the discovery of the misappropriations in March 2005. The amount misappropriated prior to January 1, 1998 could not be determined because certain data for the period prior to January 1, 1998 was unavailable. The participants in the embezzlement scheme used several methods to misappropriate the funds while engaging in conduct to conceal the misappropriated amounts. This conduct included among other things, recording and changing normal recurring journal entries and overstating accruals in prior periods to facilitate improper write-offs of misappropriated funds.

The Company determined that the misappropriation scheme led to the overstatement of overhead rates that the Company used to determine billings in connection with certain of our government contracts. As a result,

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some of our government clients were overcharged for the Company’s services. During the review of the overhead rate calculations, the Company identified certain instances of costs erroneously included in our overhead cost pool which were unallowable under applicable regulations and an error in our calculation of our overhead rate, which related to certain general and administrative costs. The Company determined that the unallowable costs and general and administrative errors also led to the overstatement of overhead rates which the Company used in connection with certain government contracts.

The Audit Committee, at the direction of the Corporate Board, disclosed the overstatement of our overhead rate to our clients and other appropriate government agencies, including the Department of Justice (“DOJ”). We have been cooperating with our clients and such agencies to determine the amount of our reimbursement obligations and any other amounts we may be obligated to pay in order to resolve these issues. The DOJ and the United States Security and Exchange Commission have been investigating the misappropriations and the overstatement of overhead rates.

The Company determined corrected overhead rates considering the impact of the misappropriations and considering the impact of additional errors identified. The Company has also recorded a related reduction in revenue, an increase in interest expense and a corresponding liability in each relevant year in its restated financial statements.

In July 2006, we entered into a settlement agreement with the State of Texas, Department of Transportation which resolves all claims that the State of Texas may have had against us for overpayments related to the restatement of overhead rates on billings on or before April 30, 2006 under contracts with that agency based on our payment of approximately $5.4 million and provides for the determination of the appropriate overhead rate for billings after April 30, 2006. In November 2006, we entered into a settlement agreement with the Florida Department of Transportation which resolves all claims that agency may have had against us for the overstatement of rates on billings through September 30, 2005 (and with respect to cost contracts through September 30, 2006) under our contracts with them based on our payment of approximately $12.5 million. This settlement agreement also provides for the determination of the appropriate overhead rate for fiscal year 2006 billings under fixed price contracts.

In January 2007, we reached a settlement agreement with the Department of Justice, Civil Division on behalf of it and all other federal agencies with which we have contracts to resolve all federal claims including claims under the Federal Civil False Claims Act, related to the overstatements of overhead rates on our contracts with federal agencies. The agreement requires approximately $6.5 million of reimbursement payments for all contract amounts through September 30, 2005.

The settlements described above are included in the accrued reimbursement liability in the Company’s consolidated financial statements. We are in discussions with our remaining government clients to enter into settlement agreements in order to satisfy any refund obligations, which are in various stages of settlement. We currently expect that these payments will not exceed our accrued reimbursement liability.

In this Annual Report, we have restated our previously issued consolidated financial statements as of September 30, 2004 and for the years ended September 30, 2004 and 2003, as well as selected financial data as of September 30, 2003, 2002 and 2001, and for the years ended September 30, 2002 and 2001, primarily to reflect adjustments relating to the effects of the misappropriations and related concealment accounting and the correction of revenue amounts charged to certain of our government clients due to the errors in our overhead rates discussed above, in addition to certain other adjustments more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 2 to our restated consolidated financial statements included elsewhere in this Annual Report.

We have not amended and will not be amending our previously filed Annual Reports on Form 10-K for the restatement, and accordingly the consolidated financial statements and related financial statement information contained in those reports should no longer be relied upon, as previously reported on Form 8-K dated March 28, 2005. Throughout this Annual Report, all amounts presented from prior periods and prior period comparisons are labeled as “Restated” and reflect the balances and amounts on a restated basis.

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Acquisitions

Throughout our history, we have made strategic acquisitions. Once we acquire a firm, it is integrated and consolidated into our existing operations and ceases to exist as a separate operating entity. We completed the following acquisitions during the last three fiscal years. The results of operations are included in the consolidated financial statements from the date of acquisition.

• We acquired all of the outstanding stock of Durham Technologies, Inc. (“DTI”) on December 1, 2002 for $1.5 million, net of cash acquired. DTI’s practice included risk modeling, risk assessment and risk management for public sector clients, primarily federal agencies. DTI’s expertise combined with PBSJ’s network of offices greatly enhanced our ability to provide emergency response and emergency management services to our clients and has resulted in substantial growth of these services. The purchase price was allocated to the respective assets and liabilities based upon their estimated fair values as of the acquisition date. The allocation of the purchase price resulted in assets of $1.7 million, including approximately $687,000 of goodwill, $484,000 of identifiable intangible assets and liabilities of $247,000.

• On March 19, 2003, we acquired all of the outstanding stock of Welker & Associates, Inc. (“Welker”) for $4.4 million, comprised of $4.0 million in cash and 20,000 shares of our common stock valued at approximately $400,000. The purchase price was allocated to the respective assets and liabilities based upon their estimated fair values as of the acquisition date. The allocation of the purchase price resulted in assets of $5.1 million, including approximately $2.2 million of goodwill, $1.2 million of identifiable intangible assets and liabilities of $703,000. During 2005 and 2004, we recorded approximately $1.7 million and $1.9 million of additional goodwill in connection with performance earn-out payments. Welker’s expertise includes water, wastewater and storm water system design and management for municipal government. The Welker acquisition enhances our presence and technical capabilities in the growing Atlanta water market.

• On June 1, 2004, we acquired all of the outstanding stock of TriLine Associates, Inc. (“TriLine”) for $3.7 million in cash. The purchase price was allocated to the respective assets and liabilities based upon their estimated fair values as of the acquisition date. The allocation of the purchase price resulted in assets of $4.3 million, including approximately $960,000 of intangible assets and $2.1 million of goodwill and liabilities of $625,000. During 2005, we recorded $10,000 of additional goodwill in connection with a purchase accounting true-up payment. TriLine’s expertise includes transportation, geotechnical, and environmental services. The TriLine acquisition enhances our presence in the transportation market in the greater Pittsburgh area and the State of Pennsylvania.

• On July 1, 2004, the Company acquired 100% of the stock of W. Koo and Associates Structural Engineers, Inc. (“WKA”) for $2.5 million, net of cash acquired of $678,000, comprised of $413,000 in cash, $250,000 in accrued additional purchase price and 71,429 shares of the Company’s common stock valued at approximately $1.9 million. The purchase agreement calls for an adjustment of the number of shares issued based on the valuation of the Company’s stock price at September 30, 2004 so that the total number of shares issued is valued at approximately $1.9 million.

The purchase agreement also called for an additional purchase amount of $500,000, contingent upon the satisfaction of certain conditions, to be paid in two installments of $250,000 on July 1, 2005 and July 1, 2006. The purchase price was allocated to the respective assets and liabilities based on their estimated fair values as of the acquisition date. The allocation of the purchase price resulted in assets of $4.0 million, including approximately $850,000 of intangible assets and $913,000 of goodwill and liabilities of $795,000.

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During 2005, we issued an additional 1,021 shares in connection with the purchase agreement adjustment and we recorded an additional $6,000 of goodwill in connection with the July 1, 2005 installment payment. In 2006, the Company recorded additional goodwill of $389,000 in connection with the July 1, 2006 installment payment. WKA’s expertise includes infrastructure improvements for public, municipal, transit, port authorities and private sector projects with a primary focus on transportation structures in California. The WKA acquisition strengthens our technical capabilities in bridge design and structural project management, particularly in the West.

• On October 1, 2004, we acquired 100% of the stock of Croslin Associates, Inc. (“Croslin”) for a purchase price of $786,000, net of cash acquired of $153,000, comprised of $457,000 in cash, $30,000 held in escrow and 11,111 shares of our common stock valued at approximately $300,000. The purchase price was allocated to the respective assets and liabilities based upon their estimated fair values as of the acquisition date. The allocation of the purchase price resulted in assets of $1.2 million, including approximately $40,000 of intangibles and $454,000 of goodwill and liabilities of $330,000. Croslin is an architectural services firm. The Croslin acquisition contributes to the Company’s goal of developing technical and production resources to extend its successful architectural practice into additional markets in the Central and Western U.S.

• On February 1, 2005, we acquired 100% of the stock of Land and Water Consulting, Inc. (“LWC”) for a purchase price of $1.3 million, net of cash acquired of $13,000, comprised of $323,000 in cash, $100,000 held in escrow and 33,862 shares of our common stock valued at approximately $914,000. The purchase price was allocated to the respective assets and liabilities based upon their estimated fair values as of the acquisition date. The allocation of the purchase price resulted in assets of $2.5 million, including approximately $63,000 of intangibles and $1.1 million of goodwill and liabilities of $1.2 million. LWC is an environmental consulting firm in Montana. The LWC acquisition enhances our technical capabilities in the environmental services market in the Northwest and West.

• On April 30, 2006, we acquired 100% of the stock of EIP Associates (“EIP”) for a purchase price of $5.5 million in cash, net of $200,000 held in escrow. EIP specializes in environmental, urban planning, water resource planning and natural resources services in California. The EIP acquisition greatly enhances our technical strength in the California environmental, water and planning markets, and enhances our general presence in California.

Business Segments

The following table sets forth our revenues, in thousands, from each of our four business segments for each of the three years ended September 30, 2005, 2004, and 2003, and the approximate percentage of our total revenues attributable to each business segment:

(Dollars in thousands)	2005			2004			2003
	Revenues		%	Revenues		%	Revenues		%
Transportation Services	$	199,490	39	$	179,743	40	$	156,453	41
Environmental Services		113,821	22		109,198	25		105,304	27
Civil Engineering		111,312	22		81,841	18		64,188	17
Construction Management		87,314	17		77,465	17		57,764	15
Totals	$	511,937		$	448,247		$	383,709

Additional information concerning segment results of operations and financial information is set forth in Item 7 under the caption entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Item 8, Note 15 of “Notes to Consolidated Financial Statements” which are included herein.

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Transportation Services

Industry Overview

During fiscal year 2005, many factors throughout the country altered upgrading the United States’ transportation infrastructure. A sluggish economy in numerous states and municipalities prevented recently executed transportation design contracts from receiving notices to proceed. Heightened airport security measures negatively impacted business travel causing large legacy passenger carriers to file bankruptcy and, consequently, fewer design and construction projects.

Our Services

Our consulting services in this area include planning, traffic engineering, intelligent transportation systems (“ITS”), corridor planning, highway design, structural design, alternate project delivery program management, toll facility design, aviation services, multi-modal/transit systems and right-of-way. We currently serve transportation departments in 17 states (Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Mississippi, Montana, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah and Virginia.)

During fiscal 2005, projects in Transportation included:

• A planning services contract for the Texas Department of Transportation (“TxDOT”), primarily to determine toll feasibility for potential roadway improvements throughout the State. All disciplines (highway design, drainage, construction, environmental services, ITS, traffic engineering, and structure design) were necessary to perform the work.

• Multi-year contracts for both North Carolina Department of Transportation and Virginia Department of Transportation included the design, implementation, operation and maintenance of a statewide telephone-based travel information services accessible by dialing “511.” North Carolina’s 511 service was launched in August 2004 and assisted the State and its travelers during several hurricane evacuations during the fall of 2005.

• The Florida Department of Transportation’s (“FDOT”) statewide intelligent transportation systems general consultant six-year contract, pursuant to which we are providing services related to the planning, architecture, standards development, and integration of ITS.

• A general engineering five year consulting agreement with The Dayton International Airport in Ohio including runway rehabilitations projects, parking structure design, and terminal gate enhancements.

• The I-70 project from downtown Denver, Colorado to the Denver International Airport is a full environmental impact study with respect to the corridor. The urban corridor includes multi-modal considerations (i.e. light rail, park and ride facilities, HOV lanes, etc.). The project includes freeway and rail design, structural components and a major public outreach effort.

• Providing General Engineering Consulting Services to a number of Toll-road agencies including:

• Florida’s Turnpike Enterprise

• Orlando Orange County Expressway Authority

• Miami-Dade County Expressway Authority

• Texas Turnpike Authority

• Transportation Corridor Agencies

• As a significant sub-consultant to Parsons Brinckerhoff Quade and Douglas, a seven year program management contract with Miami-Dade Transit providing project management services in support of the implementation of the People’s Transportation Plan (PTP) for Miami-Dade County. Specific services include but are not limited to transit design, corridor planning, and project and cost control.

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• Multi-year full service Indefinite Deliver/Indefinite Quantity contracts for engineering services for the Federal Highway Administration Western and Central Federal Lands. The contracts provide for the engineering, design, and development of roads and bridges located on federal or locally owned roads on or leading to federal lands in the western United States.

• San Diego Association of Governments (“SANDAG”) On Call: TransNet program planning, management, and technical support for SANDAG. We serve as an extension of SANDAG staff providing on-call engineering services as well as design for the next five years for the TransNet program in San Diego, California. This program is a large scale, long term transportation improvement program funded by a  ¹/2 cent county sales tax for a total of approximately $40 billion over 40 years. SANDAG identified some early action highway and transit transportation improvement projects on Routes 5, 15, 52, 76, 805 including Mid-Coast Light Rail with a 10-year completion timeline.

• State Route 22 Design Build: 36 Bridges either new, widened, or replaced on CA SR22. We, as part of the GMR Design/Build team, were selected by the Orange County Transportation Authority in California for Design/Build Phase I of the SR-22 HOV Improvement project. The completed project will include 34 new or widened bridges, four travel lanes, an additional mainline HOV lane in both directions, auxiliary lanes between most of the interchanges, and new flyover connectors between SR-57/I-5 to WB SR-22 as well as numerous retaining walls, sound walls and MSE walls.

• On-call Bridge Engineering Services: Caltrans Districts 11 and 12. We are providing bridge engineering on-call services for Caltrans Districts 11 (San Diego County) and 12 (Orange County) as a sub-consultant.

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Environmental Services

Industry Overview

Over the past thirty years, significant environmental laws at the federal, state and local levels have been enacted in response to public concern over the health of the nation’s air, water, and natural resources. Those laws and their implementation through regulation affect numerous industrial and governmental actions and form a key market driver for the services of our Environmental engineering and science business segment.

Two significant federal environmental laws, The Safe Drinking Water Act of 1974 and the Clean Water Act of 1972, continue to drive this segment of our business. Pursuant to these laws, Congress has allocated monies to assist state and local governments. According to the Environmental Protection Agency, as much as $23 billion a year will be needed for construction and upgrade of water and wastewater treatment facilities over the next 20 years.

Our Services

Our Environmental business segment focuses on the delivery of planning, design and construction management services for private and public sector clients related to:

Air Quality Management	Flood Insurance Studies
Energy Planning	Hazardous and Solid Waste Management
Cultural Resources Assessments	Information Solutions
Ecological Studies	Wastewater Treatment
Environmental Toxicology Analysis	Water Resources
Aquatic Treatment Systems	Water Supply
Biosolids Management	Water Treatment: Distribution

During fiscal 2005, some significant projects in our Environmental business segment included:

• A five-year assignment with the Washington Suburban Sanitary Commission to improve and expand the 288 million gallon per day Potomac Water Filtration Plant that provides drinking water for more than 1 million people in Montgomery and Prince Georges Counties, Maryland. We have been retained to design the improvements necessary to enhance water quality, increase process reliability, and expand plant capacity. Included in these improvements are: ultraviolet disinfection, pump stations, improved rapid mix and flow split facilities, flocculation equipment upgrades, hydraulic improvements and various electrical system enhancements. Completion of the design is expected in January 2006. Construction is expected to be completed in 2009.

• A multi-year joint venture to the U.S. Army Corps of Engineers with respect to program management support activities on the federal portion of the Comprehensive Everglades Restoration Project (“CERP”). The joint venture contract is budgeted for up to $6 million per year and the contract is for 3 years with provisions for up to 5 renewal periods. The CERP is budgeted to cost over $8 billion and the cost is to be shared equally between the federal government and state and local agencies.

• A significant project for the City of San Diego, California to provide policy and master planning services for recycled water. The City directed that the study evaluate all aspects of a viable increased water reuse program, including but not limited to groundwater storage, expansion of the distribution system, reservoirs for reclaimed water, live stream discharge, wetlands development, and reservoir augmentation.

• An innovative project with the TxDOT to develop advanced research and planning tools for streamlining archaeological and historical assessments of road construction projects within a six-county area

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surrounding Houston, Texas. A GIS product was customized to perform specialized geographic registration providing higher levels of geographic translational accuracy than previously available using conventional map overlay and rubber-sheeting techniques. The successful development of the HHO/GIS product resulted in PBSJ expanding the geographic and temporal coverage of the six-county project area to include geo-referenced imagery of almost 300 historic period maps.

• A comprehensive contract with the San Antonio River Authority to provide system design, development and deployment for the creation of the Regional Watershed Modeling System (“RWMS”). The RWMS development is the result of a historic agreement between three government entities, the San Antonio River Authority, the City of San Antonio and Bexar County to form the Bexar Regional Watershed Management partnership. The inter-local agreement that formed this partnership has subsequently been expanded to include several of the suburban San Antonio municipalities and may eventually include many of the other cities and counties within the river basin. The RWMS provides a comprehensive regional watershed management system that will act as a single repository of spatial and modeling data to be used by all partners.

• A five-year contract with the Federal Emergency Management Agency Region V, to perform all aspects of the federal government’s Map Modernization Program. This assignment includes engineering modeling and floodplain mapping for the States of Michigan, Minnesota, Wisconsin, Illinois, Ohio, and Indiana, which represent some of the most active and sophisticated floodplain managers in the United States. Efforts will also include assisting states in working with local floodplain administrators to understand the impacts of flood maps, and communicating these to residents impacted by the updated information.

• A three year assignment with the California Department of Water Resources to provide floodplain mapping support services. Activities under this contract include a host of actions designed to improve or create floodplain management throughout California. Specific task orders include:

• Levee Database: location and ownership of more than 8,000 miles of levees within the State. This task includes GIS map development, database, and application development, and extensive contact with levee districts to update information.

• Statewide Mapping Plan: detailed and approximate floodplain mapping throughout the state. Stage one is to identify the costs and products necessary to map the Central Valley in 2-5 years, followed, by a full statewide plan.

• Post Disaster Mitigation Grant Application: preparing and submitting a Post Disaster Mitigation Grant request.

• Awareness Mapping: reprioritizing the planned production of Awareness Mapping statewide and performing mapping for approximately 1,000 miles of stream.

• Executive Order: updating the Governor’s floodplain management task order.

• Levee Certification (Procedure Memo #34) Outreach: aiding in the development of an outreach program to inform levee districts of the requirement relating to levee certification.

• Design services for the expansion of the Cherokee County Water and Sewerage Authority’s Etowah River Water Treatment Facility to double the daily processing capacity. The work involved in the Etowah River WTF Expansion includes new raw water intake screens, two new raw water pumps, a new rapid mix basin, eight new flocculation basins, eight new sedimentation basins, fourteen new filters, two new clear wells, and a new high service pump station.

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Civil Engineering

Industry Overview

During fiscal 2005 the U.S Economy sustained its 2004 gains despite increasing interest rates by the Federal Reserve and some inflationary pressure primarily related to energy price increases. Federal spending remained strong, especially in the area of national defense, which increased opportunity and fortified our strategy for greater balance between the public and private sectors. Military planning increased substantially due to requirements in anticipation of Base Realignment and Closure (“BRAC”) and U.S. Army Modularity objectives. State and local government markets improved while the occurrence of natural disasters in the form of tropical storms and hurricanes increased demand for our disaster response related services to these sectors. Private investment in residential development remained very strong allowing greater selectivity in project selection and pursuit.

Near term expectations are for our markets of focus to remain strong. The Federal Department of Defense will continue to be fueled by BRAC implementation and the advancement of U.S. Army transformation. Although the private sector residential market growth can be anticipated to stabilize, government privatization and expansion of existing military installations will create new opportunities. Also the closure of many installations will provide new markets for private sector development. The recent frequency and intensity of natural disaster events is greatly increasing the national, state and local awareness of the need for planning, strong and effective response activities, and effective event management.

Our Services

Our civil engineering business provides architectural engineering and general civil engineering as well as specialized services to public and private clients. Included in these services are: site engineering and surveys, infrastructure engineering, master planning, disaster mitigation planning and response, infrastructure protection, asset management, emergency management and architectural and landscape architecture design.

Our civil engineering business will continue to focus its portfolio strategy to balance the public and private sectors with emphasis on specialized Federal National Defense markets and disaster mitigation, response and emergency management markets for state and local governments. We will continue our commitment to customers in the private sector corporate real estate development, leisure time and residential housing markets. We will rely on advanced technologies for competitive advantages and to distinguish us from our competition. These technologies include Geodata/Geographic Information Systems, database design and development, Global Positioning Systems (GPS), High Definition Survey technology and advanced data collection systems including Laser based imaging and measurement, 3D imaging, and application of web collaboration tools.

During fiscal 2005 our projects included:

• Administration and debris removal for major hurricanes for FDOT, several Florida counties and communities as well as significant storm related engineering subcontract activities in Mississippi, Alabama, Texas and Florida for the Federal Emergency Management Agency (“FEMA”).

• Site/Civil engineering for Ft. Bliss Design/Build Temporary Facilities project as a member of the Design and Construction team. We were also awarded First Phase Land Development Engineering (“LDE”) Task Order for permanent facilities.

• Charrette multidiscipline planning services for U.S Army facilities at various locations including Ft. Gordon, Ft. Benning, Ft. McPherson and Ft. Belvoir. Architectural and Engineering studies to support project justification as required by DD Form 1391. Facility examples include Law Enforcement, Emergency Services, Operations Centers, Security and Barracks. Most Charrette planning studies were done under contract with the Savannah District Corp of Engineers.

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• Numerous facility planning studies including Comprehensive Installation Master Planning, performed for Fort Belvoir, Virginia; Area Development Planning (“ADP’s”), including projects located at Fort Eustis, Redstone Arsenal and Fort Rucker; and Requirements Analysis, performed at various other Department of Defense (“DoD”) installations.

• Asset Management related Real Property Inventory (“RPI”) and Asset Verification/Asset Validation studies. Notable projects include the National Guard installations of Camp McCain and Camp Shelby, located in the State of Mississippi.

• Providing conceptual planning and urban design for the City of Clearwater, Florida for a six-block section of Gulfview Boulevard for Clearwater Beach, a world-class beach destination, located in Pinellas County.

• Continued development, testing, and integration of the HAZUS-MH software models and GIS data for the National Institute of Building Services and FEMA. The model is designed to quantify the consequences of natural disaster events, hurricanes, floods, and earthquakes.

• Designing a utility building in a campus setting for the Bridgeway Acres Redevelopment project in Pinellas County, Florida. The project transforms a waste to energy facility into five state-of-the-art campus buildings around a central green space designed to be both energy efficient and environmentally sensitive.

• On-site beach replenishment permitting staff support, survey staff support, storm impact assessment, annual aerial oblique photography, aerial photography following hurricane landfall and other miscellaneous tasks as needed for Florida Bureau of Beaches and Coastal Systems GEC.

• Architectural design services related to a series of planned resort communities for a prime developer with extensive projects planned in various locations throughout Florida and Nevada.

• Design of a new 3-Story, 10,000 SF building to house the Institute for Geophysics and the Texas Advanced Computing Center, University of Texas at Austin.

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Construction Management

Industry Overview

The demand for our construction management services has also been fueled by the legislation and industry trends that are driving the growth in our Transportation and Environmental business segments. These trends have created a large number of infrastructure projects throughout the United States, which are subject to increasingly complex governmental regulations. The market should continue to grow as a result of the new Federal Transportation Act (TEA-Lu) that was passed in 2005. However due to the restraints placed on Federal consultants as a result of Hurricanes Katrina and Rita it remains unclear as to whether the Federal Government will fully fund its Transportation Commitment. Domestic military spending should also see a significant increase beginning in 2006 through 2008. This is a result of BRAC (Base Realigning and Closing) activity.

The role of the construction manager has become increasingly important to the success of these projects, requiring a new level of versatility and a wide range of skills. Both public and private sector entities are under pressure to complete these projects at accelerated schedules, resulting in a myriad of project delivery systems. With limited in-house staff, these entities must rely on experienced construction managers to complete projects on time and within budget.

Our Services

In the area of construction management, we provide a wide range of services as an agent for our clients, including contract administration, inspection, field-testing, scheduling/estimating, instituting project controls and quality assessment. Although we do not construct or build any projects, we may act as the program director of a project whereby on behalf of the owner of the project, we provide scheduling, cost estimating and construction observation services for the project, or our services may be limited to providing construction consulting.

During fiscal 2005, projects in our Construction Management Division included:

• Providing construction engineering and inspection services to the Departments of Transportation in Alabama, Arkansas, Colorado, Nevada, Texas, Florida, Georgia, North Carolina and Mississippi as well as to various municipalities such as Cobb County Water & Sewer Department, Georgia; Collier County, Florida; Commerce City, Colorado; Douglas County, Colorado; and Fulton County, Georgia .

• Providing construction management services to Phoenix Valley Metro Rail, light rail transit project in Phoenix, Arizona.

• Providing construction administration to the Clark County, Nevada, Department of Public Works, as well as the City of Oceanside, California, and the City of Dana Pointe, California.

• Performing Structural Inspection Services for hurricane shelters for the State of Florida, Department of Community Affairs.

• Performing Vertical Code Compliance for Miami-Dade College in Florida.

• Providing comprehensive services, including cost estimating, scheduling and construction claims reviews, to the school boards of Miami-Dade County and Broward County, Florida; York County, SC; Cobb County DOT in Georgia and the TxDOT.

• Providing construction-related services to BellSouth throughout Florida and Georgia, including quality assurance inspections, verification of contractors’ invoices, damage inspections and responding to natural disasters.

• Providing construction inspection services nationally to the National Park Service and Federal Highway Administration’s Central and Western Lands Division.

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Clients

Through our four national business segments, we provide our services to a broad range of clients, including state, local and municipal agencies, the federal government and private sector businesses. Our state and local government clients include approximately 22 state departments of transportation, water utilities, local power generators, waste water treatment agencies, environmental protection agencies, schools and colleges, law enforcement agencies, judiciary, hospitals and other healthcare providers. During fiscal year 2005, we provided services to federal agencies, including the Army Corps of Engineers, EPA, Navy, Air Force, Coast Guard, United States Postal Service, FEMA, National Parks Service, and Department of Energy, and local entities. Our contracts with federal, state and local entities are subject to various methods of determining fees and costs. See “Contract Pricing and Terms of Engagement” for further discussion of our pricing arrangements with governmental clients.

Our private sector clients include retail and commercial, entertainment, railroad, petro-chemical, food, telecommunications, oil and gas, power, semi-conductor, transportation, technology, public utility, mining and forest products entities. The table below indicates the revenue generated, by client type, for each of the three years ended September 30, 2005, 2004 and 2003.

(Dollars in thousands)	Fiscal 2005			Fiscal 2004			Fiscal 2003
	Revenues		%	Revenues		%	Revenues		%
Domestic
State and local agencies	$	363,475	71	$	318,255	71	$	272,433	71
Federal agencies		30,716	6		35,860	8		30,697	8
Private businesses		117,746	23		94,132	21		80,579	21
Total	$	511,937		$	448,247		$	383,709

In fiscal 2005, we derived approximately 27% of our engineering fees from various districts and departments of the FDOT (approximately 19% of total engineering fees) and the TxDOT (approximately 8% of total engineering fees) under numerous contracts. While we believe the loss of any individual contract would not have a material adverse effect on our results of operations and would not adversely impact our ability to continue work under our other contracts with these clients, the loss of all the FDOT or the TxDOT contracts would have a material adverse effect on our results of operations by causing a material decrease in our revenues and profits. We do not believe that the impact of the misappropriations and the related accrued reimbursement liability will have a material adverse effect on our existing client relationships.

International Business

During fiscal 2005, 2004, and 2003 we did not have any revenues from international operations. Prior to fiscal 2003, these revenues had been declining because we discontinued entering into new international contracts. We do not currently have any plans to expand or grow our international operations.

Marketing

Marketing activities are conducted by key operating and executive personnel, including specifically assigned business development personnel, as well as through professional personnel who develop and maintain new and existing client relationships. Our continued ability to compete successfully in the areas in which we do business is largely dependent upon aggressive marketing, the development of information regarding client requirements, the submission of responsive cost-effective proposals and the successful completion of contracts. Information concerning private and governmental requirements is obtained, during the course of contract performance, from formal and informal briefings, from participation in activities of professional organizations, and from literature published by the government and other organizations.

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Contract Pricing and Terms of Engagement

We earn our revenues for the various types of services we provide through cost-plus, time-and-materials, fixed price contracts, and contracts which combine any of these methods.

Cost-Plus Contracts. Under our cost-plus contracts, we charge clients negotiated indirect rates based on direct and indirect costs in addition to a profit component. We recognize engineering fees at the time services are performed. The amount of revenue is based on our actual labor costs incurred plus a recovery of indirect costs and a profit component. In negotiating cost-plus contracts, we estimate direct labor costs and indirect costs and then add a profit component, which is a percentage of total recoverable costs, to arrive at a total dollar value for the contract. Indirect expenses are recorded as incurred and are allocated to contracts. If the actual labor costs incurred are less than estimated, the revenues from a project will be less than estimated. If the actual labor costs incurred plus a recovery of indirect costs and profit exceed the initial negotiated total contract amount, we must obtain a contract modification to receive payment for such overage. If a contract modification or change order is not approved by our client, we may be able to pursue a claim to receive payment. Engineering fees from claims are recognized when collected. For each of fiscal 2005 and 2004, approximately 20% and 22%, respectively, of our contracts were cost-plus contracts, primarily with state and local government agencies.

Our contracts with governmental entities, once executed, are not subject to renegotiation of profits at the election of the government; however, the governmental entity may elect to discontinue funding. If a governmental client elects to discontinue funding a project, our fees for work completed are generally protected because our contracts often provide that we receive periodic payments throughout the course of the project.

Time-and-Materials Contracts. Under our time-and-materials contracts, we negotiate hourly billing rates and charge our clients based on actual time expended. In addition, clients reimburse us for our actual out-of-pocket costs of materials and other direct incidental expenditures incurred in connection with performing the contract. Our profit margins on time-and-materials contracts fluctuate based on actual labor and overhead costs directly charged or allocated to contracts compared with negotiated billing rates. During each of fiscal 2005 and 2004, approximately 54% and 53%, respectively, of our contracts were time-and-materials contracts, primarily with federal, state and local agencies, as well as some private sector clients.

Fixed-Price Contracts. Under our fixed-price contracts, clients pay us an agreed sum negotiated in advance for the specified scope of work. Under fixed-price contracts, there are no payment adjustments if we over-estimate or under-estimate the number of labor hours required to complete the project, unless there is a change of scope in the work to be performed. Accordingly, our profit margin will increase to the extent the labor hours and other costs are below the contracted amounts. The profit margin will decrease and we may realize a loss on a project if the number of labor hours required or other costs exceed the estimate. During fiscal 2005 and 2004, approximately 26% and 25%, respectively, of our contracts were fixed-price contracts, primarily with private sector clients.

Competition

We face active competition in all areas of our business. As we provide a wide array of engineering, architectural, planning and construction management services to companies in various industries throughout the United States, we encounter a different group of competitors in each of our markets. Our competitors include (1) national and regional design firms like us that provide a wide range of design services to clients in all industries, including CH2M Hill and Parsons Brickerhoff (2) industry specific firms that provide design as well as other services to customers in a specific industry or disciplines, including Montgomery Watson, Camp Dresser and McKee, Inc., and (3) local firms that provide some or all of our services in one of our markets. Some of our competitors are larger, more diversified firms having substantially greater financial resources and larger professional and technical staffs than ours. Competition for major contracts is frequently intense and may entail public submittals and multiple presentations by numerous firms seeking to be awarded the contract. The extent of competition we will encounter in the future will vary depending on changing customer requirements in terms of types of projects and technological developments. It has been our experience that the principal competitive

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factors for the type of service business in which we engage are a firm’s demonstrated ability to perform certain types of projects, the client’s own previous experience with competing firms, the firm’s size and financial condition and the cost of the particular proposal.

No firm dominates a significant portion of the sectors in which we compete. Given the expanding demand for some of the services we provide, it is likely that additional competitors will emerge. At the same time, consolidation continues to occur in certain of the sub-segments of the industry in the United States, including the environmental-focused firms.

We believe that we will retain the ability to compete effectively with other firms that provide similar services by continuing to offer a broad range of high-quality consulting and environmental, transportation, and engineering and construction management services through our network of offices. Among other things, the wide range of expertise, which we possess, permits us to remain competitive in obtaining government contracts despite shifts in governmental spending emphasis. Our multi-disciplinary capabilities enable us to compete more effectively for clients whose projects require that the expertise of professionals in a number of different disciplines be utilized in the problem solving effort. We believe that our ability to offer our services over a large part of the United States is a positive factor in enabling us to attract and retain clients who have a need for our services in different parts of the country.

Backlog

Our backlog for services was estimated to be approximately $466.4 million and $400.4 million as of September 30, 2005 and 2004, respectively. We define backlog as contracted task orders less previously recognized revenue on such task orders. U.S. government agencies, and many state and local governmental agencies, operate under annual fiscal appropriations and fund various contracts only on an incremental basis. Our ability to realize revenues from our backlog depends on the availability of funding for various federal, state and local government agencies.

A majority of our customer orders or contract awards and additions to contracts previously awarded are received or occur at random during the year and may have varying periods of performance. The comparison of backlog amounts on the same date in successive years is not necessarily indicative of trends in our business or future revenues.

The major components of our operating costs are payroll and payroll-related costs. Because our business is dependent upon the reputation and experience of our personnel and adequate staffing, a reasonable backlog is important for the scheduling of operations and for the maintenance of a fully-staffed level of operations.

The following table presents the total backlog for services by reporting segment:

	September 30,
(Dollars in thousands)	2005		2004
Transportation Services	$	196,025	$	175,037
Environmental Services		93,004		89,291
Civil Engineering		65,237		46,359
Construction Management		112,152		89,731
Totals	$	466,418	$	400,418

Regulation

Compliance with federal, state and local regulations, which have been enacted or adopted relating to the protection of the environment, is not expected to have any material effect upon our capital expenditures, earnings and competitive position.

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Personnel

We employed approximately 3,800 employees as of September 30, 2005 and 2004. Most of our employees are professional or technical personnel having specialized training and skills, including engineers, architects, analysts, scientists, management specialists, technical writers and skilled technicians. Although many of our personnel are highly specialized in certain areas and while there is a nationwide shortage of certain qualified technical personnel, we are not currently experiencing any significant difficulty in obtaining the personnel we require to perform under our contracts. We believe that our future growth and success will depend, in large part, upon our continued ability to attract and retain highly qualified personnel.

Liabilities and Insurance

When we perform services for our clients, we can become liable for breach of contract, personal injury, property damage and negligence. Such claims could include improper or negligent performance or design, failure to meet specifications and breaches of express or implied warranties. Our clients often require us to contractually assume liabilities for damage or personal injury to the client, third parties and their property and for fines and penalties. Because our projects are typically large enough to affect the lives of many people, the potential damages to a client or third parties are potentially large and could include punitive and consequential damages. For example, our transportation projects involve services that affect not only our client, but also many end users of those services.

We seek protection from potential liabilities by obtaining indemnification, where possible, from our public and private sector clients. However, even when we obtain such indemnification, it is generally not available if we fail to satisfy specified standards of care in performing our services or if the indemnifying person has insufficient assets to cover the liability. Therefore, we also maintain a full range of insurance coverage, including workers’ compensation, general and professional liability (including pollution liability) and property coverage. Our professional liability coverage is on a claims made basis (which means that the policy provides liability coverage for all claims made during the policy period, regardless of when the action occurred), while the rest of our insurance coverage is on an occurrence basis (which means that the policy provides liability coverage only for injury or damage arising from an action that occurs during the policy period, regardless of when the claim is actually made). Our professional liability insurance provides for annual coverage of up to $40.0 million with a per claim deductible of $125,000 and annual deductible of $3.0 million. Based upon our previous experience with such claims and lawsuits, we believe our insurance coverage is adequate for all of our present operational activities, although such coverage may not prove to be adequate in all cases. A successful claim or claims in excess of our insurance coverage could have a material adverse effect on our financial position and results of operation.

Available Information

This Annual Report, quarterly reports on Form 10-Q and From 10-Q/A, current reports on Form 8-K and amendments to those reports are available without charge on the Security and Exchange Commission’s (“SEC”) web site, www.sec.gov, as soon as reasonably practicable after they are filed electronically. We are providing the address to the SEC’s website solely for the information of investors.

ITEM 1A. Risk Factors

In addition to the factors discussed elsewhere in Item 1 and the notes to the consolidated financial statements, the following risks and uncertainties could materially adversely affect our business, financial condition, and results of operations. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations and financial condition.

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Certain Risks Related to Our Marketplace and Our Operations

We are involved in litigation, legal proceedings and governmental investigations, which could have a material adverse effect on our profitability and financial position.

We are involved in litigation, legal proceedings and governmental investigations that are significant and described in more detail in Item 3 “Legal Proceedings”. Such litigation, proceedings and investigations could have a material adverse effect on our profitability and financial position if decided adversely.

Unpredictable downturns in the financial markets, and reduced federal, state and local government budget spending could cause our revenues to fluctuate and adversely affect our revenue and operating results.

Downturns in the financial markets can impact the capital expenditures of our clients. In particular, our private sector clients, and the markets in which we provide services, may from time to time experience periods of economic decline. Any prolonged downturn in the financial markets could negatively impact our ability to determine demand for our services. We cannot be certain that economic or political conditions will be generally favorable or that there will not be significant fluctuations adversely affecting our industry as a whole or key markets we target.

The demand for our government related services is contingent upon the level of government funding for new and existing infrastructure projects. As such, government funding is dependent upon policy objectives being in line with infrastructure needs. Any shift in policy away from these initiatives can impact our ability to secure current funding for projects and obtain new projects.

We operate in a highly competitive market. If we are unable to offer competitive services, our business may be adversely affected.

We have numerous competitors in the various marketplaces in which we operate. Our competitors range from large diversified firms having substantially greater financial resources and a larger technical staff than us, to smaller more specialized, low cost structure niche firms. It is not possible to estimate the extent of competition which our present or future activities will encounter because of changing competitive conditions, customer requirements, technological developments, political environments and other factors.

We continue to see significant price competition and customer demand for higher service completion levels. There is also significant price competition in the marketplace for federal, state and local government contracts as a result of budget issues, political pressure and other factors beyond our control. Our operating results could be negatively impacted should we be unable to achieve the necessary revenue growth to sustain profitable operating margins within our service lines.

Pending or future governmental audits could result in findings which require downward adjustments of our revenue; and, under certain circumstances, could cause us to incur significant liabilities or restrict our business activities.

We are party to numerous contracts with federal, state and other government agencies, which require strict compliance with applicable laws, regulations, standards and contractual requirements. Federal and many state agencies routinely conduct various types of audits of their contracts. In some cases, the agencies conducting these audits review and report instances of fraud, internal control deficiencies, and violations of regulations or provisions of the contract.

If these audits identify costs which have been incorrectly charged or billed, either directly or indirectly, to government contracts, the government agencies may not reimburse us for these costs, or if we have already been reimbursed, we may be required to refund these reimbursements.

Our internal controls may not prevent or detect specific isolated or deceitful violations of applicable laws, regulations, standards or contractual requirements. If these agencies determine that we or one of our subcontractors has engaged in illegal conduct, we may be subject to civil or criminal penalties, and this may impair our ability to obtain new work.

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We derive a significant portion of our engineering fees from a few clients, and the loss of these clients could have a material adverse impact on our financial performance.

In fiscal 2005, we derived approximately 27% of our engineering fees from various districts and departments of the FDOT and the TxDOT under numerous contracts. While we believe the loss of any individual contract would not have a material adverse effect on our results of operations and would not adversely impact our ability to continue work under our other contracts with these clients, the loss of all the FDOT or the TxDOT contracts would have a material adverse effect on our results of operations by causing a material decrease in our engineering fees and profits.

Our backlog is subject to cancellation and unexpected adjustments, which could have a negative impact on future earnings.

Backlog represents the revenues associated with contracted task orders which are scheduled to commence in future periods, less previously recognized revenue on such task orders. Projects may remain in our backlog for prolonged periods of time prior to commencement, and our ability to realize revenues from our backlog is contingent on the availability of funding from federal, state and local government agencies. Most government agency contracts contain cancellation clauses, which if exercised, would cause a reduction in our backlog, and adversely affect future revenues. Future project cancellations and scope adjustments could further reduce the dollar amount of our backlog and the revenues and profits that we actually earn.

If we are unable to accurately estimate the revenues, costs, time and resources on our contractual commitments, we may incur a lower profit or loss on the contract.

We generally earn revenue for the services we provide through three principal types of contracts; cost-plus, time-and-materials, and fixed price contracts. Cost-plus contracts are usually subject to negotiated ceiling amounts, and limit the recovery of certain specified indirect costs. If we underestimate our costs, and our costs exceed the contract ceiling amount, we may not be reimbursed for such costs. Under time-and-materials contracts, we negotiate hourly billing rates and charge our clients based on actual time expended. If we underestimate our total contract costs, we may not recover these costs from our client, and the project may not be profitable for us. Under fixed price contracts, we receive a fixed sum negotiated in advance, regardless of actual costs incurred. If we underestimate our revenue and costs for the specified scope of work, we may experience significant over-runs and negatively impact profit margin or realize a loss on the contract. Under these types of contracts, we bear the inherent risk that actual performance cost may exceed the contract price.

If we are unable to retain and recruit highly qualified personnel to fulfill our contractual obligations, our business may be adversely affected.

Our employees are our most valuable resource. Many of our technical personnel are highly specialized in their respective disciplines. Since we derive substantially all of our engineering fees from services performed by our professional staff, our failure to retain and attract professional staff could negatively impact our ability complete our projects and secure new contracts.

Failure to meet the covenants of our existing revolving credit facility could result in the loss of use of our available line of credit.

Failure to meet any of the covenant terms of our existing revolving credit facility could result in an event of default. If an event of default occurs, and we are unable to receive a waiver of default, our lender may increase our borrowing costs, restrict our ability to obtain additional borrowings, accelerate all amounts outstanding or enforce their interest against all collateral pledged. In the past, we have obtained written waivers of default from

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our lender, but we may not be able to obtain any necessary waivers in the future. In addition, we can not declare dividends or incur additional debt without written approval from our lender, which could significantly restrict our ability to raise additional capital. Our inability to raise additional capital could lead to working capital deficits that could have a materially adverse effect on our operations in future periods.

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If the material weaknesses in our internal control over financial reporting identified below are not remediated or we otherwise fail to maintain effective internal control over financial reporting, future material misstatements in our financial statements could result, which would result in additional restatements, impact our ability to timely file our financial statements, or cause us to improperly calculate our overhead rate for our government contracts.

In this report we have restated our previously issued consolidated financial statements to reflect certain accounting adjustments. The restatements related to (i) overstatement of engineering fees resulting from incorrect overhead rates (ii) adjusting entries needed to correct concealing entries made in connection with the misappropriations, (iii) recognition of rent expenses, (iv) classification of leases as operating instead of capital leases and the timing of expense recognition in connection therewith, (v) the recognition of expenses in the appropriate accounting period, (vi) the accounting for post-employment benefit plans, (vii) accrued wages, (viii) billings in excess of cost correction and (ix) classification errors.

In connection with the restatements, management concluded that as of September 30, 2005, there remained significant material weaknesses in our internal control over financial reporting. We are implementing measures to ensure the accuracy of our financial statements and to attempt to remediate these material weaknesses. If the material weaknesses are not remediated or new material weaknesses arise, they could result in material misstatements in our financial statements in the future, which would result in additional restatements, impact our ability to timely file our financial statements or cause us to improperly calculate our overhead rate for our government contracts. As a result, our business and financial condition could be materially and adversely affected.

We may be negatively impacted as a result of litigation or other proceedings relating to past political contributions by us and certain of our employees.

In the course of our investigation of the accounting irregularities and misappropriations, it was determined that there were possible violations relating to past political contributions by us and certain of our employees. The United States Attorney’s Office for the Southern District of Florida and the Federal Bureau of Investigation are now conducting an investigation into this matter. An unfavorable resolution or outcome resulting from this investigation may cause irreparable damage to our reputation and negatively impact our ability to secure new contracts with existing governmental clients.

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Certain Risks Related to Owning Our Stock

Because no public market exists for our stock, the ability of our shareholders to sell their common stock is limited.

There is no public market for our common stock. In order to provide some liquidity to our shareholders, we have historically maintained a limited annual stock offering period, which we call the stock window. The stock window has permitted existing shareholders to offer their shares for sale back to us during a predetermined period at a price determined by an appraisal. Although the stock window is intended to provide some liquidity to shareholders, the aggregate number of shares offered for sale during the stock window may be greater than the aggregate number of shares sought to be purchased by authorized buyers. As a result, sell orders may be prorated, and shareholders may not be able to sell all of the shares they desire to sell during the stock window. We did not open the stock window in fiscal 2006, and as such, there is no guarantee the stock window will be open or will not be delayed in future periods. Shareholders who desire to sell their shares in the future will only be able to do so if there are authorized buyers willing to purchase such shares during an open stock window.

The ability of shareholders to sell or transfer their common stock is restricted.

Only our employees, directors, and The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust (“ESOP”) may own our common stock. We have incorporated significant restrictions on the transfer of our common stock which limit our shareholders’ ability to sell their stock. All shares must be initially offered for sale back to us at the price determined by an appraisal. If we decline to purchase the shares, the ESOP Plan may purchase such shares. Should the ESOP Plan decline to purchase the shares, the shareholders may offer their shares for sale to other shareholders. The other shareholders have the right to purchase such shares based on each shareholder’s proportionate ownership of all issued shares. Because our shares are subject to transfer restrictions, shareholders who desire to sell all their shares may not be able to do so.

Pursuant to the Company’s by-laws, the Company is permitted to repurchase stock by delivery of a promissory note to the employee. Because the principal payable pursuant to any such promissory note may be paid at any time prior to the five year anniversary of the date of issuance, a shareholder may not receive a cash payment for his shares until such five year anniversary.

Because we do not intend to pay dividends, our shareholders will benefit from an investment in our common stock only if our stock price appreciates.

We have never declared or paid dividends to holders of our common stock. We expect to retain all future earnings for investment in our business, and do not expect to pay any cash dividends in the near future. As a result, the positive return of an investment in our common stock is solely dependable on future appreciation in value of our common stock and future earnings. There is no guarantee that our stock will appreciate in value or even maintain the original price at which it was purchased.

The value of our stock may be negatively impacted by current and future governmental agency investigations.

An unfavorable resolution or outcome resulting from working with various government agencies to resolve the amount of reimbursement obligations may result in a material adverse impact to our enterprise value, and may adversely impact the future value of our share price. In addition we are currently under investigation by the United States Attorney’s office for the Southern District of Florida and the Federal Bureau of Investigation for possible irregularities relating to past political contributions made by us and certain of our employees. In the event that criminal charges are filed against the Company, the future value of our share price may be impacted.

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ITEM 1B. Unresolved Staff Comments

None.

ITEM 2. Properties

We lease and maintain our executive offices located at 5300 W. Cypress Street, Suite 200 Tampa, FL 33607. We own our Miami office located at 2001 N.W. 107th Avenue, Miami, Florida 33172, which consists of approximately 100,000 square feet of office space. We own our Orlando office located at 482 South Keller Road, Orlando, Florida 32810, which consists of approximately 90,000 square feet of office space. The Orlando office building is pledged as collateral under a mortgage note.

We lease an additional 77 offices in 23 states in the United States and Puerto Rico, all of which are used for our four major business segments. Aggregate lease payments during fiscal year 2005 were approximately $14.3 million.

We also have title to certain properties recovered during the investigation which we have classified as held for sale in the accompanying consolidated balance sheet at September 30, 2005. These properties include:

• 6,500 square foot residence located in Aventura, Florida, which is pledged as collateral under a mortgage note,

• a 5,400 square foot residence located in Key Largo, Florida, which is pledged as collateral under a mortgage note,

• a 2,000 square foot condominium located in Hollywood, Florida,

• and a 19,000 square foot parcel of land located in Key Largo, Florida, which is pledged as collateral under a mortgage note.

We believe that substantially all of our property and equipment are, in general, well maintained and in good operating condition. They are considered adequate for present needs, and as supplemented by planned construction, are expected to remain adequate for the near future.

We believe that we, or our subsidiaries, have clear title to the properties owned and used in our business, subject to liens for current taxes and easements, restrictions and other liens, which do not materially detract from the value of the properties or our interest in the properties or the use of those properties in our business.

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ITEM 3. Legal Proceedings

We are party to several pending legal proceedings arising from our operations. We believe that we have sufficient professional liability insurance such that the outcome of any of these proceedings, individually and in the aggregate, will not have a material adverse effect on our financial position or results of operations. However, if our insurance company were to deny coverage for a significant judgment or if a judgment were entered against us in an amount greater than our coverage, it could adversely affect our results of operations and financial position.

We maintain a full range of insurance coverages, including workers’ compensation, commercial general liability (which includes property coverage), commercial automobile, and professional liability (which includes pollution coverage). Our professional liability coverage is on a “claims-made basis” meaning the coverage applies to claims made during a policy year regardless of when the causative action took place. All other coverages are “occurrence-basis” meaning that the policy in place when the injury or damage occurred is the policy that responds regardless of when the claim is made. Our professional liability limits per policy year are $40 million with a per claim deductible of $125,000 and an annual aggregate of $3 million. Based on our experience with claims and lawsuits we believe that the current levels of coverage are adequate for all of our present operational activities although such coverages may not prove to be adequate in all cases. A successful catastrophic claim or aggregate of several large claims in amounts in excess of our insurance coverages in any policy year could have a material adverse effect on our financial position and results of operation.

Misappropriation Loss

In March 2005, subsequent to the issuance of the Company’s 2004 financial statements, we discovered misappropriations of Company funds by our former Chief Financial Officer and two former employees who worked in our information systems and treasury departments, collectively, (“the participants”). The participants colluded and circumvented controls to misappropriate funds and conceal the misappropriations possibly beginning as early as 1993 until the misappropriations were discovered.

Shortly after this discovery, an investigation sub-committee was formed comprised of the three outside members of our Corporate Audit Committee. These three outside members were subsequently appointed to the Board of Directors and became the three members of the Audit Committee of the Board of Directors. The Audit Committee retained independent counsel to conduct an investigation and advise the Audit Committee in connection with the investigation. The independent counsel retained forensic accountants, including accountants experienced in conducting forensic audits for companies that perform contracts for federal, state and local governments to assist with the investigation.

The investigation team discovered that at least $36.6 million was misappropriated between January 1, 1998 and the discovery of the misappropriations in March 2005. The amount misappropriated prior to January 1, 1998 could not be determined because certain data for the period prior to January 1, 1998 was unavailable. The participants in the embezzlement scheme used several methods to misappropriate the funds while engaging in conduct to conceal the misappropriated amounts. This conduct included among other things, recording and changing normal recurring journal entries and overstating accruals in prior periods to facilitate improper write-offs of misappropriated funds.

The Company determined that the misappropriation scheme led to the overstatement of overhead rates that the Company used to determine billings in connection with certain of our government contracts. As a result, some of our government clients were overcharged for the Company’s services. During the review of the overhead rate calculations, the Company identified certain instances of costs erroneously included in our overhead cost pool which were unallowable under applicable regulations and an error in our calculation of our overhead rate, which related to certain general and administrative costs. The Company determined that the unallowable costs and general and administrative errors also led to the overstatement of overhead rates which the Company used in connection with certain government contracts.

The Audit Committee, at the direction of the Corporate Board, disclosed the overstatement of our overhead rate to our clients and other appropriate government agencies, including the Department of Justice (“DOJ”). We have

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been cooperating with our clients and such agencies to determine the amount of our reimbursement obligations and any other amounts we may be obligated to pay in order to resolve these issues. The DOJ and certain other governmental entities have been investigating the misappropriations and the overstatement of overhead rates.

The Company determined corrected overhead rates considering the impact of the misappropriations and considering the impact of additional errors identified. The Company has also recorded a related reduction in revenue, an increase in interest expense and a corresponding liability in each relevant year in its restated financial statements.

In July 2006, we entered into a settlement agreement with the State of Texas, Department of Transportation which resolves all claims that the State of Texas may have had against us for overpayments related to the restatement of overhead rates on billings on or before April 30, 2006 under contracts with that agency based on our payment of approximately $5.4 million and provides for the determination of the appropriate overhead rate for billings after April 30, 2006. In November 2006, we entered into a settlement agreement with the Florida Department of Transportation which resolves all claims that agency may have had against us for the overstatement of rates on billings through September 30, 2005 (and with respect to cost contracts through September 30, 2006) under our contracts with them based on our payment of approximately $12.5 million. This settlement agreement also provides for the determination of the appropriate overhead rate for fiscal year 2006 billings under fixed price contracts.

In January 2007, we reached a settlement agreement with the Department of Justice, Civil Division on behalf of it and all other federal agencies with which we have contracts to resolve all federal claims including claims under the Federal Civil False Claims Act, related to the overstatements of overhead rates on our contracts with federal agencies. The agreement requires approximately $6.5 million of reimbursement payments for all contract amounts through September 30, 2005.

The settlements described above are included in the accrued reimbursement liability in the Company’s consolidated financial statements. We are in discussions with our remaining government clients to enter into settlement agreements in order to satisfy any refund obligations, which are in various stages of settlement. We currently expect that these payments will not exceed our accrued reimbursement liability.

Our Board of Directors, with the assistance of the CAC and the Audit Committee, instituted immediate corrective actions and began implementing long-term measures to implement new financial controls and establish procedures to safeguard assets and to establish more accurate accounting and financial reporting practices. These long-term measures are included within our new Ethics and Compliance Program.

In an effort to recover assets that were misappropriated, the Company has instituted lawsuits against certain persons who received money from one or more of the participants in the embezzlement scheme. The Company continues to incur costs associated with such lawsuits, and the Company may not prevail in these lawsuits. In the event that the Company does prevail, the Company may not actually recover assets from the persons who were sued by the Company.

In the course of our investigation of the accounting irregularities and misappropriations, it was determined that there were possible violations relating to past political contributions by us and certain of our employees. The United States Attorney’s Office for the Southern District of Florida (Miami) and the Federal Bureau of Investigation are now conducting an investigation relating to improper campaign contributions including improper use of political action committees. We have produced documents and other information to the government and are fully cooperating with the investigation. At the present time, we believe it unlikely that criminal charges will be filed against us in this matter, but the authorities are not precluded from bringing charges and circumstances may change.

The United States Securities & Exchange Commission is also conducting an investigation of the accounting irregularities and misappropriations of funds described above. We are fully cooperating with the investigation and have produced documents and other information to the commission. At the present time, we are unable to predict the likely outcome of this investigation.

Pursuant to the Company’s by-laws, the Company is permitted to repurchase stock by delivery of a promissory note to the employee. On February 23, 2006 the Company repurchased 46,000 shares and 3,400 shares,

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respectively, of the Company’s stock from Richard A. Wickett, our former Chairman of the Board from 2002 to February 2005 and former Chief Financial Officer from 1993 to 2004, and Kathryn J. Wilson in the original principal amounts of $1.2 million and $92,000, respectively. The notes currently bear interest at the rate of 7.5% per annum and such rate is adjusted to the then current prime rate of Bank of America on December 31^st of each year. Accrued interest and $1 of principal is due monthly on the notes with all remaining principal and accrued interest due and payable on the five year anniversary of the date of issuance. The notes are subject to the Company’s right of set off, which permits the Company to set off all claims it may have against the payee against amounts due and owing under the notes.

ITEM 4. Submission of Matters to a Vote of Security Holders

No items were submitted to a vote to security holders during the fiscal year ended September 30, 2005.

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PART II

ITEM 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

There is no established public trading market for our common stock. As of September 30, 2005 there were no shares of common stock that were subject to outstanding warrants or options to purchase, or securities convertible into, our common stock, and no shares of our common stock could be sold pursuant to Rule 144 under the Securities Act. No shares of our common stock are being, or have been, publicly offered.

As of December 31, 2006, there were 6,812,200 shares of common stock outstanding and held of record by 1,581 shareholders.

Our by-laws require that common stock held by shareholders who terminate employment with us be offered for sale at fair market value to us pursuant to a right of first refusal. Should we decline to purchase the shares, the shares must next be offered to our ESOP plan at fair market value, and then ultimately to our full-time employees. Our by-laws provide that the fair market value be determined by an appraisal. Other than agreements with certain retired Directors, as of September 30, 2005 and 2004, there was no outstanding common stock held by individuals no longer employed by us.

Dividends

Each share of our common stock is entitled to share equally in any dividends declared by our Board of Directors. Pursuant to the terms of our credit agreement, we cannot declare or pay dividends in excess of 50% of our net income. We have not paid cash dividends on our common stock in the past and have no present intention of paying cash dividends on our common stock in the foreseeable future. All earnings are retained for investment in our business.

Issuer Purchases of Equity Securities by Issuer and Affiliated Purchasers

The following table provides information about repurchases of common stock during the year ended September 30, 2005:

	Total Number of Shares Repurchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Be Purchased Under the Plans or Programs
October 1 to June 30	476,616	$	26.91	—	—
July 1 to July 31	34,698		27.00	—	—
August 1 to 31	15,734		27.00	—	—
September 1 to September 30	11,517		27.00	—	—
Total	538,565	$	26.92	—	—

⁽¹⁾ During fiscal 2005, stock repurchases totaling more than $300,000 were paid to employees at 90% of the total value in cash, and 10% of total value by delivery of a promissory note.

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ITEM 6. Selected Financial Data

Subsequent to the issuance of the September 30, 2004 consolidated financial statements, the Company determined that it was necessary to restate its consolidated financial statements as of September 30, 2004 and for the years ended September 30, 2004 and 2003 (see also Note 2 to our consolidated financial statements). The financial data as of September 30, 2005 and 2004 and for the years ended September 30, 2005, 2004 and 2003 have been derived from our audited financial statements. The consolidated financial statements for the years ended September 30, 2002 and 2001 have not been re-issued. We have restated selected financial data as of September 30, 2003, 2002 and 2001 and for the fiscal years ended September 30, 2002 and 2001, respectively. However, because the financial statements for those years and related restatement adjustments have not been reissued, the selected financial data is presented as unaudited. You should read the information set forth below in conjunction with our consolidated financial statements, including the notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Annual Report.

	Years Ended September 30,
	2005		2004		2003		2002		2001
			(Restated)		(Restated)		(Restated)		(Restated)
(Dollars in thousands, except per share amounts)							(Unaudited)		(Unaudited)
Operating Data:
Engineering fees	$	511,937	$	448,247	$	383,709	$	338,236	$	311,552
Net earned revenues		389,951		351,875		302,016		262,668		233,292
Net income		21,075		14,690		12,721		6,703		6,739
Balance Sheet Data (at end of period):					(Unaudited)		(Unaudited)		(Unaudited)
Working capital		30,506		20,293		19,800		15,795		12,833
Total assets		251,647		204,365		168,501		149,010		141,536
Accrued reimbursement liability (1)		34,772		24,119		16,248		10,425		4,956
Long-term debt, less current portion		7,425		7,828		17,350		20,997		9,929
Capital leases obligations		853		684		505		206		—
Total stockholders’ equity		77,832		62,703		50,061		43,658		51,371
Net income per share:
Basic	$	2.92	$	2.03	$	1.71	$	0.83	$	0.83
Diluted	$	2.74	$	1.91	$	1.61	$	0.79	$	0.80

(1) Over-billings to our government clients resulting from the overstatement of our overhead rates resulting from the misappropriation loss and concealment entries and certain additional errors identified.

We have not paid dividends for the five years ended December 31, 2005.

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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Restatement

In March 2005, subsequent to the issuance of the Company’s 2004 financial statements, we discovered misappropriations of Company funds by our former Chief Financial Officer and two former employees who worked in our information systems and treasury departments, collectively, (“the participants”). The participants colluded and circumvented controls to misappropriate funds and conceal the misappropriations possibly beginning as early as 1993 until the misappropriations were discovered. The investigation discovered that at least $36.6 million was misappropriated between January 1, 1998 and the discovery of the misappropriations in March 2005. The amount misappropriated prior to January 1, 1998 could not be determined because certain data for the period prior to January 1, 1998 was unavailable (See Note 2 for further discussion).

The Company determined that the misappropriation scheme led to the overstatement of overhead rates that the Company used to determine billings in connection with certain of our government contracts. As a result, some of our government clients were overcharged for the Company’s services. During the review of the overhead rate calculations, the Company identified certain instances of costs erroneously included in our overhead cost pool which were unallowable under applicable regulations and an error in our calculation of our overhead rate, which related to certain general and administrative costs. The Company determined that the unallowable costs and general and administrative errors also led to the overstatement of overhead rates which the Company used in connection with certain government contracts.

We have restated our previously issued consolidated financial statements as of September 30, 2004 and for the years ended September 30, 2004 and 2003, as well as selected financial data as of September 30, 2002 and 2001, and for the years ended September 30, 2003, 2002 and 2001, primarily to reflect adjustments relating to the effects of the misappropriations and related concealment accounting and the correction of revenue amounts charged to certain of our government clients due to the errors in our overhead rates discussed above, in addition to certain other adjustments more fully described in Note 2 to our restated consolidated financial statements.

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A summary of our fiscal 2005 and restated 2004 and 2003 operating results is as follows:

	Years ended September 30,
(Dollars in thousands, except per share amounts)	2005			2004			2003
Engineering fees	$	511,937		$	448,247		$	383,709
Direct expenses		121,986			96,372			81,693
Net earned revenues		389,951			351,875			302,016
Costs and expenses:
Direct salaries and direct costs		146,299			131,521			111,991
General and administrative expenses, including indirect salaries		210,551			186,068			165,761
Misappropriation loss (recoveries), net		(10,725	)		4,854			5,075
Investigation and related costs		5,446			—			—
Operating income		38,380			29,432			19,189
Interest expense		(1,824	)		(1,625	)		(1,518	)
Other, net		260			617			1,561
Income before income taxes		36,816			28,424			19,232
Provision for income taxes		15,741			13,734			6,511
Net income	$	21,075		$	14,690		$	12,721
Net income per share:
Basic	$	2.92		$	2.03		$	1.71
Diluted	$	2.74		$	1.91		$	1.61

The following table sets forth the percentage of net earned revenue represented by the items in our consolidated statements of operations and sets forth the effect of the restatement for fiscal 2004 and 2003:

	Years ended September 30,
	2005		2004		2003
Engineering fees	131.3	%	127.4	%	127.0	%
Direct reimbursable expenses	31.3		27.4		27.0
Net earned revenues	100.0		100.0		100.0
Costs and expenses:
Direct salaries and direct costs	37.5		37.4		37.1
General and administrative expenses, including indirect salaries	54.0		52.9		54.9
Misappropriation loss (recoveries), net	(2.8	)	1.4		1.7
Investigation and related costs	1.4		—		—
Operating income	9.9		8.3		6.3
Interest expense	(0.5	)	(0.5	)	(0.5	)
Other, net	0.1		0.2		0.5
Income before income taxes	9.5		8.0		6.3
Provision for income taxes	4.0		3.9		2.2
Net income	5.5	%	4.1	%	4.1	%

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Overview

Management’s Discussion and Analysis of Financial Condition and Results of Operations for prior periods has been revised for the effects of the restatement described above.

Business Overview

We provide services to both private and public sector clients, with the public sector comprising approximately 77% of our revenues. Our business has four segments: Transportation Services, Civil Engineering, Construction Management and Environmental Services. During fiscal 2005, the Transportation Services, Civil Engineering and Construction Management segments experienced significant growth. The growth in the Civil Engineering segment was fueled by large disaster response projects as a result of the hurricanes that hit Florida in August and September 2004, in addition to wild fires in southern California and growth in the segment’s homeland security program. The growth in the construction management segment was due primarily to several large projects with existing clients, including several state departments of transportation. All four segments of our business experienced increased volumes in backlog at September 30, 2005, as compared to September 30, 2004.

We earn revenue for time spent on projects, in addition to certain direct costs of our projects, such as blueprints and sub-contractor expenses. The fluctuation in direct costs, specifically sub-contractor costs, will influence the fluctuation of our net earned revenue. For instance, our environmental segment experienced a decrease in direct costs in fiscal 2005, as compared to 2004, as a result of a reduced need for a sub-consultant with a special skill for a project in California. As a result, our Environmental Services segment’s net earned revenue grew at a greater rate than its engineering fees, because more work was being performed by our in-house technical professionals. During fiscal 2005, there was an increase in the number of our employees who were primarily technical professionals, whose billable labor gets charged back to our clients, thereby increasing the amount of fees we earned. As chargeability of our technical professionals’ time increases, direct labor costs increase along with it, while indirect labor costs decrease, as more of the technical staff’s time worked is being charged back to our clients.

Business Environment

The need to modernize and upgrade the transportation infrastructure in the United States has been a source of continued business for us through the last ten years. Fueling the initial growth in this market was the Intermodal Surface Transportation Efficiency Act of 1991 (“ISTEA”). In 1998, ISTEA was reauthorized as the Transportation Equity Act for the 21st Century (“TEA-21”), earmarking $218 billion for highway and transit projects through 2003. Prior to the expiration of TEA-21 on September 30, 2003, the U.S. Congress and President Bush signed a five-month extension of the program. Since then, a series of additional extensions have been granted, the most recent of which occurred on July 30, 2005 and was set to expire on August 14, 2005, however, on August 10, 2005, the President signed into law the Safe, Accountable, Flexible, Efficient Transportation Act: A Legacy for Users (“SAFETEA-LU”). The SAFETEA-LU guarantees funding for highways, highway safety, and public transportation totaling $244.1 billion. SAFETEA-LU ensures that state agencies that depend largely on federal transportation funding, will continue to make investments needed to maintain and grow the vital transportation infrastructure.

The demand for our construction management services has also been fueled by the legislation and industry trends that are driving the growth in our Transportation and Environmental business segments, including ISTEA and TEA-21. These trends have created a large number of infrastructure projects throughout the United States, which are subject to increasingly complex governmental regulations. The market could level out or shrink slightly until a new Federal transportation funding bill is passed. The potential impact is currently minimal, but increases as time passes until the bill is passed. Projects/programs that depend on the Federal gas tax funding are being delayed, which may eventually lead to a temporary reduction in demand for the services we provide.

During the last quarter of fiscal 2004 and the first quarter of fiscal 2005, the economy entered a period of slow recovery with improving private sector corporate profitability, while investment in residential housing development continued at high rates. Federal spending remained strong especially in the area of national defense, which increased opportunity and fortified our strategy for greater balance between the public and private sectors. The state and local government markets remained weak but the market for our specialized services in the area of risk and

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emergency management strengthened due in part to hurricanes and wild fires. Near term expectations are for the Federal Department of Defense and Homeland Security sectors to remain strong. As the economy expands its recovery, we expect the private sector to strengthen. We expect that state and local government markets will remain weak but will improve as increased tax revenue from private sector recovery trickles into the government sector.

In recent years, significant environmental laws at the federal, state and local levels have been enacted in response to public concern over the health of the nation’s air, water, and natural resources. Those laws and their implementation through regulation affect numerous industrial and governmental actions and form a key market driver for the services of our Environmental Services segment. Two federal environmental laws, The Safe Drinking Water Act of 1974 and the Clean Water Act of 1972, continue to drive this segment of our business. Pursuant to these laws, Congress has authorized significant monies to assist state and local governments. According to the EPA, as much as $23 billion a year will be needed for construction and upgrade of water and wastewater treatment facilities over the next 20 years.

Segment Results of Operations

Our businesses are reported as four segments, reflecting our management methodology and structure:

Activities in the Transportation Services business segment generally involve planning, design, right of way acquisition, development and design of intelligent transportation services and program construction management services for multiple transportation modes, including interstate and primary highways, toll roads, arterials, bridges, transit systems, airports and port facilities. The Program Management group of our Transportation segment provides many of its governmental clients the necessary resources to manage large infrastructure programs from concept through construction. Services include planning, programming, and contract support.

The Construction Management segment provides a wide range of services as an agent for the Company’s clients, including contract administration, inspection, field-testing, scheduling/estimating, instituting project controls and quality assessment. The Company provides scheduling, cost estimating and construction observation services for the project, or its services may be limited to providing construction consulting.

The Civil Engineering segment provides general civil engineering as well as specialized services to public and private clients. Included in these services are: site engineering and surveys, infrastructure engineering, master planning, disaster mitigation planning and response, asset assessment and management, emergency management and architectural and landscape design.

The Environmental Services business segment focuses on the delivery of planning, design and construction management services for private and public sector clients related to air quality management, flood insurance studies, energy planning, hazardous and solid waste management, ecological studies, wastewater treatment, water resources, environmental toxicology analysis, aquatic treatment systems and water supply and treatment.

The accounting policies of the segments are the same as those described in the footnotes to the accompanying consolidated financial statements. We evaluate performance based on operating income (loss) of the respective segments. The discussion that follows is a summary analysis of the primary changes in operating results by segment for fiscal 2005 as compared to fiscal 2004 and fiscal 2004 as compared to fiscal 2003.

Net earned revenue represents the net effect of gross revenues less direct reimbursable expenses. Direct reimbursable expenses is primarily comprised of subcontractor costs and other direct non-payroll reimbursable charges including travel and travel related costs, blueprints and equipment where the Company is responsible for procurement and management of such cost components on behalf of the Company’s clients. These direct reimbursable expenses are principally passed through to our clients with minimal or no mark-up. Indirect salaries represent wages earned by technical personnel not assigned to client billable projects and administrative and support personnel wages as well.

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	Years Ended September 30,
	2005			% of NER		2004		% of NER		2003			% of NER
(Dollars in thousands)
Transportation Services
Engineering fees	$	199,490		133.0	%	$	179,743	133.0	%	$	156,453		129.0	%
Direct reimbursable expenses		49,469		33.0			44,632	33.0			35,149		29.0
Net earned revenues (NER)		150,021		100.0			135,111	100.0			121,304		100.0
Direct salaries and direct costs		56,420		37.6			50,714	37.6			45,629		37.6
Indirect salaries		28,924		19.3			26,706	19.8			22,033		18.2
General and administrative costs		48,974		32.6			45,051	33.3			39,610		32.7
Misappropriation loss (recoveries), net		(3,932	)	(2.6	)		1,819	1.3			1,882		1.6
Investigation and related costs		1,997		1.3			—	0.0			—		0.0
Total costs and expenses		132,383		88.2			124,290	92.0			109,154		90.0
Operating income	$	17,638		11.8	%	$	10,821	8.0	%	$	12,150		10.0	%
Construction Management
Engineering fees	$	87,314		129.0	%	$	77,465	132.9	%	$	57,764		134.8	%
Direct reimbursable expenses		19,635		29.0			19,187	32.9			14,898		34.8
Net earned revenues (NER)		67,679		100.0			58,278	100.0			42,866		100.0
Direct salaries and direct costs		28,032		41.4			24,518	42.1			17,650		41.2
Indirect salaries		11,193		16.6			8,084	13.9			6,982		16.3
General and administrative costs		22,078		32.6			18,755	32.2			14,760		34.4
Misappropriation loss (recoveries), net		(1,774	)	(2.6	)		757	1.3			701		1.6
Investigation and related costs		900		1.3			—	0.0			—		0.0
Total costs and expenses		60,429		89.3			52,114	89.5			40,093		93.5
Operating income	$	7,250		10.7	%	$	6,164	10.5	%	$	2,773		6.5	%
Civil Engineering
Engineering fees	$	111,312		139.4	%	$	81,841	117.1	%	$	64,188		116.6	%
Direct reimbursable expenses		31,446		39.4			11,924	17.1			9,156		16.6
Net earned revenues (NER)		79,866		100.0			69,917	100.0			55,032		100.0
Direct salaries and direct costs		29,725		37.2			25,850	37.0			20,454		37.2
Indirect salaries		16,107		20.2			12,086	17.3			11,628		21.1
General and administrative costs		29,509		37.0			25,423	36.4			22,085		40.1
Misappropriation loss (recoveries), net		(2,369	)	(3.0	)		1,027	1.5			1,049		1.9
Investigation and related costs		1,203		1.5			—	0.0			—		0.0
Total costs and expenses		74,175		92.9			64,386	92.2			55,216		100.3
Operating income	$	5,691		7.1	%	$	5,531	7.8	%	$	(184	)	-0.3	%
Environmental Services
Engineering fees	$	113,821		123.2	%	$	109,198	123.3	%	$	105,304		127.2	%
Direct reimbursable expenses		21,436		23.2			20,629	23.3			22,490		27.2
Net earned revenues (NER)		92,385		100.0			88,569	100.0			82,814		100.0
Direct salaries and direct costs		32,122		34.8			30,439	34.4			28,258		34.1
Indirect salaries		20,763		22.5			18,998	21.4			18,289		22.1
General and administrative costs		33,003		35.7			30,965	35.0			30,374		36.7
Misappropriation loss (recoveries), net		(2,650	)	(2.9	)		1,251	1.4			1,443		1.7
Investigation and related costs		1,346		1.5			—	0.0			—		0.0
Total costs and expenses		84,584		91.6			81,653	92.2			78,364		94.6
Operating income	$	7,801		8.4	%	$	6,916	7.8	%	$	4,450		5.4	%

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Year Ended September 30, 2005 Compared to Year Ended September 30, 2004

Engineering Fees

	Years Ended September 30,
(Dollars in thousands)	2005		2004		$ Change		% Change
Transportation Services	$	199,490	$	179,743	$	19,747	11.0	%
Construction Management		87,314		77,465		9,849	12.7	%
Civil Engineering		111,312		81,841		29,471	36.0	%
Environmental Services		113,821		109,198		4,623	4.2	%
Total Engineering Fees	$	511,937	$	448,247	$	63,690	14.2	%

Engineering fees for the year ended September 30, 2005, were $511.9 million compared to $448.2 million in 2004, representing a 14.2% increase. Substantially all of the increase was in the Civil Engineering, Construction Management and Transportation Services segments.

Engineering fees from Civil Engineering services increased 36.0% to $111.3 million in fiscal 2005 from $81.8 million in fiscal 2004. This segment greatly benefited from large response projects related to the calendar year 2004 hurricanes in Florida, and to a lesser extent, from hurricane Katrina in late August of 2005. Engineering fees in the Civil Engineering segment also increased due to the Croslin acquisition on October 1, 2004. Engineering fees from Croslin, following the acquisition were approximately $2.7 million for the fiscal year ended September 30, 2005. This segment also experienced modest growth from our homeland security program and Southern California economic growth.

Our Construction Management engineering fees increased 12.7% to $87.3 million in fiscal 2005, from $77.5 million in fiscal 2004. The increase relates primarily to several large projects with existing clients including several state departments of transportation. The biggest growth arose out of an acceleration of Texas Turnpike Authority (“TTA”) projects and projects with Arkansas Department of Transportation (“DOT”). The later stages of construction management work typically require a full technical staff, plus temporary technical help, as well as a significant amount of overtime. This resulted in a continued growth in the year over year engineering fees for this segment’s operations in Arkansas and Texas. Lastly, our construction management segment benefited from the disaster response projects that resulted from the hurricanes that hit Florida in the third quarter of 2004 and to a lesser extent to hurricane Katrina which hit the Gulf States in late August 2005.

In the Transportation Services segment, engineering fees increased 11.0% to $199.5 million in fiscal 2005 from $179.7 million in fiscal 2004. The increase was primarily due to increase in new projects awarded by the Texas DOT (“TxDOT”) and to the TriLine and WKA acquisitions. Engineering fees from TriLine and WKA, following the acquisitions, were $5.2 million and $6.7 million, respectively, for the fiscal year ended September 30, 2005.

Engineering fees have remained relatively stable in our Environmental Services segment with engineering fees increasing 4.2% to $113.8 million in fiscal 2005 from $109.2 million in fiscal 2004. The increase is primarily attributable to the acquisition of LWC, acquired in March 2005. Engineering fees from the LWC acquisition were approximately $3.5 million in fiscal 2005. In addition, our Environmental Services’ engineering fees were negatively impacted by the winding down of a large FEMA project, offset by increased organic growth to replace these engineering fees. This organic growth was primarily driven by the segment’s increased focus on marketing and business development.

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Net Earned Revenues

	Years Ended September 30,
(Dollars in thousands)	2005		2004		$ Change		% Change
Transportation Services	$	150,021	$	135,111	$	14,910	11.0	%
Construction Management		67,679		58,278		9,401	16.1	%
Civil Engineering		79,866		69,917		9,949	14.2	%
Environmental Services		92,385		88,569		3,816	4.3	%
Total Net Earned Revenues	$	389,951	$	351,875	$	38,076	10.8	%

Net earned revenues (“NER”) was $390.0 million during the year ended September 30, 2005 as compared to $351.9 million in the same period in 2004, representing an increase of 10.8%. This increase was directly related to the increase in engineering fees, as previously explained.

	Years Ended September 30,
(Dollars in thousands)	2005		% of NER		2004		% of NER
Transportation Services	$	49,469	33.0	%	$	44,632	33.0	%
Construction Management		19,635	29.0	%		19,187	32.9	%
Civil Engineering		31,446	39.4	%		11,924	17.1	%
Environmental Services		21,436	23.2	%		20,629	23.3	%
Total Direct Reimbursable Expenses	$	121,986	31.3	%	$	96,372	27.4	%

In addition, the change in our NER is affected by the fluctuation in our direct reimbursable expenses. Direct reimbursable expenses consist of out-of-pocket expenses related to the delivery of services such as blueprints, reproductions, CADD/computer charges, travel and sub-consultant expenses. As a percentage of NER, direct reimbursable expenses increased 3.9% to 31.3% in fiscal 2005 from 27.4% in fiscal 2004. The increase was driven by the Civil Engineering segment.

Direct reimbursable expenses in the Civil Engineering segment increased as a percentage of NER by 22.3% to 39.4% in fiscal 2005 from 17.1% in fiscal 2004. The increase was due to the disaster response projects related to the Florida hurricanes in the third quarter of 2004 and the Southern California fires and to a lesser extent, to hurricane Katrina which hit the Gulf States in late August of 2005. These disasters required significant travel and lodging costs for the hundreds of employees overseeing debris removal in the areas affected by the disasters. In addition, sub-consultants were hired to perform some of the work, adding to the direct reimbursable expenses.

In our Construction Management segment, direct reimbursable expenses as a percentage of NER decreased by 3.9% to 29.0% in fiscal 2005 from 32.9% in fiscal 2004. This decrease was primarily due to several projects shifting from direct reimbursable projects to cost plus projects, reducing the total direct reimbursable expenses. Also, an increase in lump sum contracts in the Southeast region has reduced direct reimbursable expenses.

Our Environmental Services segment showed a slight decrease of 0.1% in direct reimbursable expenses as a percentage of NER to 23.2% in fiscal 2005 from 23.3% in fiscal 2004. The decrease was due primarily to a return to normal direct reimbursable expense spending in fiscal 2005, as compared to 2004. In 2004, direct reimbursable expenses were larger than normal due to a video inspection sub-consultant that we utilized to assist us with the beginning stages of a job in California. Since then, the volume of video work has decreased, thereby reducing our direct reimbursable expenses in this segment.

Direct reimbursable expenses for the Transportation Services segment as a percentage of NER remained constant at 33.0% in fiscal 2005 and fiscal 2004.

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Operating Income

	Years Ended September 30,
(Dollars in thousands)	2005			% of NER		2004		% of NER
Transportation Services	$	17,638		11.8	%	$	10,821	8.0	%
Construction Management		7,250		10.7	%		6,164	10.6	%
Civil Engineering		5,691		7.1	%		5,531	7.9	%
Environmental Services		7,801		8.4	%		6,916	7.8	%
Total Operating Income	$	38,380		9.8	%	$	29,432	8.4	%
Misappropriation Loss (Recoveries) and Investigation and Related Costs, net		(5,279	)	-1.4	%		4,854	1.4	%
Total Operating Income before Misappropriation Loss and Investigation and Related Costs, net	$	33,101		8.5	%	$	34,286	9.7	%

Operating income was $38.4 million in fiscal 2005 as compared to $29.4 million in fiscal 2004, representing an increase of 30.4%. The increase in total operating income is primarily the result of a $14.3 million gain from recovered assets, offset by $3.6 million misappropriation loss and $5.4 million in investigation related costs. All segments had increases in fiscal 2005 operating income from the prior fiscal year. Operating income, as a percentage of NER, increased by 1.4% to 9.8% in fiscal 2005 from 8.4% in fiscal 2004. All the segments, except Civil Engineering, experienced increases in fiscal 2005 operating income as a percentage of NER as compared to fiscal 2004.

We believe that operating income before misappropriation loss and investigation and related costs is a useful measure in evaluating our results of operations because the misappropriation loss, recoveries and investigation and related costs are unusual items which do not reflect the costs or revenues of our provision of services in the given year. While the misappropriations occurred over a long period, the recoveries and investigation costs are realized when recovered or incurred and not in relation to the period when the misappropriations occurred. We believe this measure is helpful for us and for our investors to evaluate the results of our operations and make comparisons between periods.

Operating income before misappropriation loss and investigation and related costs, net was $33.1 million for fiscal 2005 as compared to $34.3 million for fiscal 2004, representing a decrease of 3.5%. Operating income before misappropriation loss and related costs, net, as a percentage of NER, decreased by 1.2% to 8.5% in fiscal year 2005 from 9.7% in fiscal year 2004. Misappropriation loss and investigation and related costs, net are treated as corporate overhead costs, and as such, are allocated to each respective segment. The allocation is based on the segments’ proportionate share of general and administrative (“G&A”) costs to total Company G&A costs.

As a percentage of NER, the Transportation Services segment’s operating income before misappropriation loss and investigation and related costs, net increased by 1.2% to 10.5% in fiscal 2005 from 9.3% in fiscal 2004. This increase experienced by the Transportation Services segment was driven by improvements in engineering fees and chargeability, due largely to the large disaster response projects and significant increases in work volume with DOTs as a result of increased funding sources available to the states. As explained previously, as chargeability improves or increases, we are able to bill more of our labor costs to clients, thereby improving our profit margin. The other three segments experienced decreases in operating income before misappropriation loss and related costs, net, as a percentage of NER. These decreases were primarily due to decreased chargeability. When we experience a decrease in chargeability, we are billing less to our customers, thereby reducing our profit margin.

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Costs

Costs consist principally of direct salaries and direct costs that are chargeable to clients and overhead and general and administrative expenses.

Direct Salaries and Direct Costs

	Years Ended September 30,
(Dollars in thousands)	2005		% of NER		2004		% of NER
Transportation Services	$	56,420	37.6	%	$	50,714	37.5	%
Construction Management		28,032	41.4	%		24,518	42.1	%
Civil Engineering		29,725	37.2	%		25,850	37.0	%
Environmental Services		32,122	34.8	%		30,439	34.4	%
Direct Salaries and Direct Costs	$	146,299	37.5	%	$	131,521	37.4	%

Direct salaries and direct costs primarily includes direct salaries and to a lesser extent unreimburseable direct costs. Direct costs totaled $881,000 and $1.6 million in fiscal 2005 and 2004, respectively.

Direct salaries and direct costs were $146.3 million in fiscal 2005, as compared to $131.5 million in fiscal 2004, representing an increase of 11.2%. This increase is directly related to the increase in engineering fees and chargeability. As a percentage of NER, all segments except Construction Management experienced an increase from a year ago. On a Company basis, direct salaries and direct costs as a percentage of NER increased slightly to 37.5% in fiscal 2005 from 37.4% in fiscal 2004.

For the Civil Engineering segment, direct salaries and direct costs increased by 15.0% to $29.7 million in fiscal 2005 versus $25.9 million in fiscal 2004. Direct salaries and direct costs as a percentage of NER increased slightly to 37.2% in fiscal 2005 from 37.0% in fiscal 2004.

Direct salaries and direct costs in the Construction Management segment increased to $28.0 million in fiscal 2005, or a 14.3% increase from $24.5 million in fiscal 2004. As a percentage of NER, direct salaries and direct costs decreased 0.7% to 41.4% in fiscal 2005 from 42.1% in fiscal 2004. This decrease is due to increased chargeability and increased profitability from an acceleration of TxDOT projects and various transportation projects in Florida. The latter stages of these projects required full technical staff, plus temporary technical help as well as significant amounts of overtime.

The Transportation Services segment experienced an increase in direct salaries and direct costs of 11.3% to $56.4 million in fiscal 2005 compared to $50.7 million in fiscal 2004. As a percentage of NER, direct salaries and direct costs increased slightly to 37.6% in fiscal 2005 from 37.5% in fiscal 2004.

For our Environmental Services segment, direct salaries and direct costs increased to $32.1 million in fiscal 2005 from $30.4 million in fiscal 2004, a 5.5% increase. As a percentage of NER, direct salaries and direct costs increased by 0.4% from 34.4% in fiscal 2004 to 34.8% in fiscal 2005. The slight increase in direct salaries and direct costs as a percentage of NER is due primarily to a larger proportional increase in direct salaries and direct costs of 5.5% in relation to the increase in NER of 4.2%.

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Indirect Salaries and General and Administrative Costs

The other component of costs is indirect costs, which include indirect salaries, and general and administrative costs.

	Years Ended September 30,
(Dollars in thousands)	2005		% of NER		2004		% of NER
Transportation Services	$	28,924	19.3	%	$	26,706	19.8	%
Construction Management		11,193	16.5	%		8,084	13.9	%
Civil Engineering		16,107	20.2	%		12,086	17.3	%
Environmental Services		20,763	22.5	%		18,998	21.4	%
Total Indirect Salaries	$	76,987	19.7	%	$	65,874	18.7	%

Indirect salaries increased 16.9%, to $77.0 million in fiscal 2005 from $65.9 million in fiscal 2004. Indirect salaries as a percentage of NER increased 1.0% to 19.7% in fiscal 2005 compared to 18.7% in fiscal 2004.

Transportation Services experienced a decrease in indirect salaries as a percentage of NER of 0.5% from 19.8% in fiscal 2004 to 19.3% in fiscal 2005 resulting from an increase in chargeability from new projects with the TxDOT and acquisitions, as previously explained. As chargeability increases, and as more of the technical staff’s time worked is being charged back to clients, direct salaries increases and indirect salaries decreases.

Civil Engineering and Environmental Services experienced an increase in indirect salaries as a percentage of NER of 2.9% and 1.1%, respectively, as a result of the focus on marketing and business development and an increased use of sub-consultants on certain projects.

Indirect salaries in our Construction Management segment increased 38.5% to $11.2 million in fiscal 2005 from $8.1 million in fiscal 2004. As a percentage of NER, indirect salaries increased by 2.6% to 16.5% in fiscal 2005 from 13.9% in fiscal 2004. The primary result of this increase is attributable to delays in the commencement of certain projects and the opening of new offices to support new business initiatives in the East region.

	Years Ended September 30,
(Dollars in thousands)	2005		% of NER		2004		% of NER
Transportation Services	$	48,974	32.6	%	$	45,051	33.3	%
Construction Management		22,078	32.6	%		18,755	32.2	%
Civil Engineering		29,509	37.0	%		25,423	36.4	%
Environmental Services		33,003	35.7	%		30,965	35.0	%
Total General & Administrative Costs	$	133,564	34.3	%	$	120,194	34.2	%

General and administrative (“G&A”) costs increased 11.1%, to $133.6 million in fiscal 2005 from $120.2 million in fiscal 2004. The majority of the increase is primarily related to increased medical insurance premiums ($3.8 million), payroll taxes ($2.1 million), professional fees ($1.7 million), incentive compensation ($1.0 million) and rent expense ($1.6 million). We also incurred additional fees for information technology system upgrades and Sarbanes-Oxley readiness and documentation. These costs are generally considered corporate costs which benefit all segments and are allocated to the respective segments based on the individual segments’ proportionate share of G&A costs as compared to total Company G&A costs.

Misappropriation loss (recoveries) and Investigation and Related Costs

As described elsewhere in this Annual Report, we have recorded $3.6 million and $4.9 million in adjustments to disclose the effect of the misappropriations of Company assets (previously concealed and included in G&A for fiscal year 2004) during 2005 and 2004, respectively. During fiscal 2005, we also recorded a gain from recovered assets totaling $14.3 million, resulting in a net misappropriation gain of $10.7 million for fiscal 2005.

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Additionally, in fiscal 2005, we incurred $5.4 million in costs to investigate and quantify the impact of the embezzlement, and in costs related to the recovery and maintenance of certain assets. The recorded gain from recovered assets and the investigation and related costs have been allocated to our segments based on the individual segments’ proportionate share of G&A costs to total Company G&A costs.

The following table sets forth the components of the misappropriation loss for the years ended September 30, 2005, 2004, 2003 and prior and related investigation expenses:

				Years Ended September 30,
(Dollars in thousands)	Cumulative Total			2005			2004		2003		2002 and Prior
Misappropriation loss	$	36,600		$	3,636		$	4,854	$	5,075	$	23,035
Less: gain from recovered assets		(14,361	)		(14,361	)		—		—		—
Legal fees related to the investigation		2,344			2,344			—		—		—
Forensic accounting fees and related costs		2,849			2,849			—		—		—
Other		253			253			—		—		—
Total	$	27,685		$	(5,279	)	$	4,854	$	5,075	$	23,035

During fiscal 2006, we expect to incur additional costs in connection with the investigation and with the restatement of our previously issued consolidated financial statements. We expect to incur an additional $11.1 million in investigation related and legal related expenses and $2.7 million in overhead rate and financial statement audit related expenses during fiscal 2006.

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Year Ended September 30, 2004 Compared to Year Ended September 30, 2003

Engineering Fees

	Years Ended September 30,
(Dollars in thousands)	2004		2003		$ Change		% Change
Transportation Services	$	179,743	$	156,453	$	23,290	14.9	%
Construction Management		77,465		57,764		19,701	34.1	%
Civil Engineering		81,841		64,188		17,653	27.5	%
Environmental Services		109,198		105,304		3,894	3.7	%
Total Engineering Fees	$	448,247	$	383,709	$	64,538	16.8	%

Engineering fees for the year ended September 30, 2004, were $448.2 million compared to $383.7 million in fiscal 2003, representing a 16.8% increase. All four segments experienced increases in engineering fees, driven by double digit percentage growth in the Construction Management, Civil Engineering and Transportation Services segments.

Our Construction Management engineering fees increased 34.1% to $77.5 million in fiscal 2004 from $57.8 million in fiscal 2003. The increase in our construction management fees relates primarily to several large projects with existing clients including several state departments of transportation. The biggest growth arose out of an acceleration of the TTA projects and projects with Arkansas DOT. TTA work required the addition of more than 100 full time technical employees. The program to manage $800 million in turnpike construction management was won by us in 2001 and began six months earlier than scheduled, resulting in the construction management staff growth over previous years. At the same time, our Construction Management segment was at its staffing peak on a project with the Arkansas DOT. This project was also won in 2001, but did not achieve full staffing until 2002, and was nearing its end in 2004. The later stages of construction management work typically require a full technical staff, plus temporary technical help, as well as a significant amount of overtime. This resulted in a continued growth in the year over year engineering fees for this segment’s operations in Arkansas and Texas. This project is essentially complete and will demobilize in 2005. Lastly, our construction management segment benefited from the disaster response projects that resulted from the hurricanes that hit Florida in 2004.

Engineering fees from our Civil Engineering segment increased 27.5% to $81.9 million in fiscal 2004 from $64.2 million in fiscal 2003. The increase in engineering fees is primarily due to large disaster response projects related to the 2004 hurricanes in Florida and wild fires in Southern California. In addition, growth in our homeland security program also contributed to the increase year over year.

In the Transportation Services segment, engineering fees increased 14.9% to $179.7 million in fiscal 2004 from $156.4 million in fiscal 2003 due to higher volumes from new and existing projects with several state departments of transportation and aviation projects around the country. Growth was greatest in Texas, Arizona, Nevada, Colorado and California. The growth in Texas was due to increased funding as a result of the passage of the HB 3588 bill by the Texas legislature. In addition, more money is being generated through bonding and new tax initiatives. Transportation Services’ growth in the western states was due to increased marketing efforts and the WKA acquisition. Our aviation programs grew due to natural escalation of salaries, as well as, new military clients.

In our Environmental Services segment, engineering fees have remained stable increasing 3.7% to $109.2 million in fiscal 2004 from $105.3 million in fiscal 2003. The growth is primarily related to a large FEMA project, which began to wind down in early fiscal 2004. In addition, more time was spent during fiscal 2004 on marketing and business development for future projects, which negatively impacts our engineering fees in the short-term.

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Net Earned Revenues

	Years Ended September 30,
(Dollars in thousands)	2004		2003		$ Change		% Change
Transportation Services	$	135,111	$	121,304	$	13,807	11.4	%
Construction Management		58,278		42,866		15,412	36.0	%
Civil Engineering		69,917		55,032		14,885	27.0	%
Environmental Services		88,569		82,814		5,755	6.9	%
Total Net Earned Revenues	$	351,875	$	302,016	$	49,859	16.5	%

NER was $351.9 million in fiscal, 2004 as compared to $302.0 million in fiscal 2003, representing an increase of 16.5%. This increase was directly related to the increase in engineering fees.

	Year Ended September 30,
(Dollars in thousands)	2004		% of NER		2003		% of NER
Transportation Services	$	44,632	33.0	%	$	35,149	29.0	%
Construction Management		19,187	32.9	%		14,898	34.8	%
Civil Engineering		11,924	17.1	%		9,156	16.6	%
Environmental Services		20,629	23.3	%		22,490	27.2	%
Total Direct Reimbursable Expenses	$	96,372	27.4	%	$	81,693	27.0	%

In addition, the change in our NER is affected by the fluctuation in our direct reimbursable expenses. Direct reimbursable expenses consist of out-of-pocket expenses related to the delivery of services such as blueprints, reproductions, CADD/computer charges, and travel and sub-consultant expenses. As a percentage of NER, direct reimbursable expenses increased 0.4% to 27.4% in fiscal 2004 from 27.0% in fiscal 2003. The increase was driven primarily by the Transportation Services and Civil Engineering segments.

Direct reimbursable expenses for our Transportation Services segment increased in fiscal 2004 by 27.0% to $44.6 million from $35.1 million in fiscal 2003. As a percentage of NER, direct reimbursable expenses increased 4.0% to 33.0% in fiscal 2004 from 29.0% in fiscal 2003. The increase primarily resulted from increased use of sub consultants due to contract requirements.

Direct reimbursable expenses in the Civil Engineering segment increased during fiscal 2004 by 30.2% to $11.9 million versus $9.2 million in fiscal 2003. As a percentage of NER, direct reimbursable expenses increased 0.5% to 17.1% in fiscal 2004 from 16.6% in fiscal 2003. The increase was due to the disaster response projects related to the Florida hurricanes in 2004 and the Southern California wild fires. These disasters required significant travel and lodging costs for the hundreds of employees overseeing debris removal in the areas affected by the disasters. In addition, sub-consultants were hired to perform some of the work, adding to the direct reimbursable expenses.

In our Construction Management segment, direct reimbursable expenses increased to $19.2 million in fiscal 2004 versus $14.9 million in fiscal 2003, for a year to year increase of 28.8%. As a percentage of NER, direct reimbursable expenses decreased 1.9% to 32.9% in fiscal 2004 from 34.8% in fiscal 2003 due to decreased use of sub-consultants on several projects and changes in our reimbursement structure for a large project.

Our Environmental Services segment experienced a decrease in direct reimbursable expenses of 8.3% to $20.6 million in fiscal 2004 compared to $22.5 million in fiscal 2003. As a percentage of NER, direct reimbursable expenses decreased by 3.9% to 23.3% in fiscal 2004 versus 27.2% in fiscal 2003. The decrease was due primarily to a return to normal direct reimbursable expense spending in fiscal 2004, as compared to 2003. In 2003, direct reimbursable expenses were larger than normal due to a video inspection sub-consultant that we utilized to assist us with the beginning stages of a job in California. Since then, the volume of video work has decreased, thereby reducing direct our expenses in this segment.

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Operating Income

	Years Ended September 30,
(Dollars in thousands)	2004		% of NER		2003			% of NER
Transportation Services	$	10,821	8.0	%	$	12,150		10.0	%
Construction Management		6,164	10.6	%		2,773		6.5	%
Civil Engineering		5,531	7.9	%		(184	)	-0.3	%
Environmental Services		6,916	7.8	%		4,450		5.4	%
Total Operating Income	$	29,432	8.4	%	$	19,189		6.4	%
Misappropriation Loss		4,854	1.4	%		5,075		1.7	%
Total Operating Income before Misappropriation Loss	$	34,286	9.7	%	$	24,264		8.0	%

Operating income was $29.4 million for fiscal 2004 as compared to $19.2 million for fiscal 2003, representing an increase of 53.4%. Operating income, as a percentage of NER, increased by 2.0% to 8.4% in fiscal 2004 from 6.4% in fiscal 2003. All the segments except Transportation Services experienced an increase in operating income compared to the prior year and increases in operating income as a percentage of NER.

We believe that operating income before misappropriation loss is a useful measure in evaluating our results of operations because the misappropriation loss is an unusual item which does not reflect the costs or revenues of our provision of services in the given year. We believe this measure is helpful for us and for our investors to evaluate the results of our operations and make comparisons between periods.

Operating income before misappropriation loss was $34.3 million for fiscal 2004 as compared to $24.3 million for fiscal 2003, representing an increase of 41.3%. Misappropriation loss is treated as a corporate overhead cost, and as such, it is allocated to each respective segment. The allocation is based on the segments’ proportionate share of general and administrative (“G&A”) costs to total Company G&A costs.

Operating income before misappropriation loss, as a percentage of NER, increased by 1.7% to 9.7% in fiscal 2004 from 8.0% in fiscal 2003. All the segments except Transportation Services experienced an increase in operating income before misappropriation loss compared to the prior year and increases in operating income before misappropriation loss as a percentage of NER. These were driven by improvements in engineering fees and chargeability, due largely to the large disaster response projects and significant increases in work volume with DOTs as a result of increased funding sources available to the states. In addition, all three segments had a reduction in costs and expenses, as a percentage of NER, as a result of the improvements in chargeability, which allowed for less growth in the indirect labor costs. As explained previously, as chargeability improves or increases, we are able to bill more of our labor costs to clients thereby improving our profit margin. These increases were partially offset by decreases in operating income before misappropriation loss as a percentage of NER experienced by the Transportation Services segment due to decreased chargeability and increases in other costs and expenses, primarily indirect labor, as a percentage of NER.

Costs

Costs consist principally of direct salaries and direct costs that are chargeable to clients and overhead and general and administrative expenses.

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Direct Salaries and Direct Costs

	Years Ended September 30,
(Dollars in thousands)	2004		% of NER		2003		% of NER
Transportation Services	$	50,714	37.5	%	$	45,629	37.6	%
Construction Management		24,518	42.1	%		17,650	41.2	%
Civil Engineering		25,850	37.0	%		20,454	37.2	%
Environmental Services		30,439	34.4	%		28,258	34.1	%
Direct Salaries and Direct Costs	$	131,521	37.4	%	$	111,991	37.1	%

Direct salaries and direct costs primarily includes direct salaries and to a lesser extent unreimburseable direct costs. Direct costs totaled $1.6 million and $1.3 million in fiscal 2004 and 2003, respectively.

Direct salaries and direct costs were $131.5 million in fiscal 2004, as compared to $112.0 million in fiscal 2003, representing an increase of 17.4%. This increase is directly related to the increase in engineering fees and chargeability previously explained. As a percentage of NER, direct salaries and direct costs increased slightly, to 37.4% in fiscal 2004 from 37.1% in fiscal 2003.

Direct salaries and direct costs in the Construction Management segment increased in fiscal 2004 by 38.9% to $24.5 million versus $17.7 million in fiscal 2003. As a percentage of NER, direct salaries and direct costs increased 0.9% to 42.1% in fiscal 2004 from 41.2% in fiscal 2003. This increase is due to significant growth in Texas and Arkansas as a result of new projects with existing clients, such as TTA and Arkansas DOT.

The Civil Engineering segment decreased slightly as a percentage of NER to 37.0% in fiscal 2004 from 37.2% in fiscal 2003.

Direct salaries and direct costs for the Transportation Services segment increased to $50.7 million in fiscal 2004 from $45.6 million in fiscal 2003, an 11.1% increase year-to-year. As a percentage of NER, direct salaries and direct costs decreased slightly by 0.1% to 37.5% in fiscal 2004 as compared to 37.6% in fiscal 2003.

For our Environmental Services segment, direct salaries and direct costs increased by 7.7% to $30.4 million in fiscal 2004 from $28.3 million in fiscal 2003. As a percentage of NER, direct salaries and direct costs increased slightly to 34.4% in fiscal 2004 from 34.1% in fiscal 2003.

Indirect Salaries and General and Administrative Costs

The other component of costs is indirect costs, which include indirect salaries, and general and administrative expenses.

	Years Ended September 30,
(Dollars in thousands)	2004		% of NER		2003		% of NER
Transportation Services	$	26,706	19.8	%	$	22,033	18.2	%
Construction Management		8,084	13.9	%		6,982	16.3	%
Civil Engineering		12,086	17.3	%		11,628	21.1	%
Environmental Services		18,998	21.4	%		18,289	22.1	%
Total Indirect Salaries	$	65,874	18.7	%	$	58,932	19.5	%

Indirect salaries increased 11.8%, to $65.9 million fiscal 2004 from $58.9 million in fiscal 2003. As a percentage of NER, indirect salaries decreased 0.8% to 18.7% for fiscal 2004 compared to 19.5% for the comparable fiscal period in 2003.

Transportation Services experienced an increase of 1.6% in indirect salaries as a percentage of NER in fiscal 2004 when compared to the same fiscal period in 2003. This increase is the result of decreased chargeability due to the focus on marketing and business development, as well as initiatives supporting new segment programs with new and existing clients.

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Construction Management, Civil Engineering and Environmental Services segments experienced a decrease in indirect salaries as a percentage of NER of 2.4%, 3.8% and 0.6%, respectively, in fiscal 2004 from fiscal 2003. The decreases were the result of improved chargeability from new projects including the hurricane relief efforts. As chargeability increases, and as more of the technical staff’s time worked is being charged back to clients, direct labor increases and indirect labor decreases.

	Years Ended September 30,
(Dollars in thousands)	2004		% of NER		2003		% of NER
Transportation Services	$	45,051	33.3	%	$	39,610	32.7	%
Construction Management		18,755	32.2	%		14,760	34.4	%
Civil Engineering		25,423	36.4	%		22,085	40.1	%
Environmental Services		30,965	35.0	%		30,374	36.7	%
Total General & Administrative Costs	$	120,194	34.2	%	$	106,829	35.4	%

G&A costs increased 12.5%, to $120.2 million in fiscal 2004 from $106.8 million during fiscal 2003. The majority of the increase is primarily related to increased medical insurance premiums, relocation and travel expenses, legal accruals and increased fiscal year-end performance awards. These costs are generally considered corporate costs which benefit all segments and are allocated to the respective segments based on the individual segments’ proportionate share of G&A costs as compared to total Company G&A costs.

G&A costs as a percentage of NER decreased 1.2% to 34.2% in fiscal 2004, from 35.4% in fiscal 2003. This improvement is primarily related to slower growth in overhead costs within our Civil Engineering and Construction Management segments as compared to the growth in the NER within these segments. The slower growth in overhead costs is because the disaster response projects require the use of several hundred part time temporary technical professionals who do not receive fringe benefits, such as health benefits and paid time off.

Misappropriation Loss

As described elsewhere in this Annual Report, we have recorded $4.9 million and $5.1 million in adjustments to disclose the effect of the misappropriations of Company assets (previously concealed and included in G&A for fiscal year 2004 and 2003) during 2004 and 2003, respectively. The misappropriation loss has been allocated to our segments based on the individual segments’ proportionate share of general and administrative costs to total Company G&A costs.

Consolidated Results

Net Income:

Net income was $21.1 million, $14.7 million and $12.7 million for fiscal years 2005, 2004 and 2003, respectively. The percentage of net income to NER was 5.4%, 4.2% and 4.2% for fiscal years 2005, 2004 and 2003. The 43.5% increase in net income in fiscal 2005, as compared to 2004, was primarily the result of increased engineering fees and chargeability as well as reduction in our effective tax rate resulting from the use of federal research and development tax credits. Net income also benefited in fiscal 2005 from $10.7 million net gain on assets recovered during the investigation ($3.6 million misappropriation loss net of $14.3 million gain from assets recovered) partially offset by additional legal and investigation related costs of $5.4 million. The effective tax rate was 42.8% in fiscal 2005 compared to 48.8% in fiscal 2004. The increase in engineering fees was partially offset by an increase in indirect labor and G&A expenses which increased at a greater percentage than NER. The majority of the increase in G&A is primarily related to increased medical insurance premiums, increased professional fees for information technology system upgrades and Sarbanes-Oxley readiness and documentation, and general performance salary increases for employees.

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Income Taxes:

The income tax provision was $15.7 million and $13.7 million, or an effective tax rate of 42.8% and 48.8%, for the years ended September 30, 2005 and 2004, respectively. The decrease in the effective tax rate in fiscal 2005 was due to the use of federal research and development tax credits. For the past several years, we have generated research and development tax credits related to certain qualifying costs. The qualifying costs relate primarily to our project costs which we believe involve technical uncertainty. These research and development costs were incurred in the course of providing services generally under long-term client projects. Because we have been unable to utilize the entire amount of research and development tax credits we have generated each year, the balance sheets reflect a deferred tax asset of $5.5 million and $6.2 million at September 30, 2005 and 2004, respectively, for the unused credit carry forwards. These research and development tax credit carry-forwards will expire beginning 2017 through 2022.

Our effective tax rate is based on income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which we operate. Significant judgment is required in determining the effective tax rate and in evaluating our tax positions. The Company establishes reserves when, despite its belief that the tax return positions are fully supportable, it believes that certain positions, if challenged, will likely be resolved unfavorably to us. These reserves are adjusted in light of changing facts and circumstances, such as the progress of a tax audit or current developments in tax law. Our annual tax rate includes the impact of reserve provisions and changes to reserves. While it is often difficult to predict the final outcome or the timing of resolution of any particular matter, we believe that our reserves reflect the probable outcome of known tax contingencies. Resolution of the tax contingencies would be recognized as an increase or decrease to our tax rate in the period of resolution. We have recorded a tax contingency accrual of approximately $13.5 million and $6.7 million as of September 30, 2005 and 2004, respectively related to research and development tax credits taken on the Company’s tax returns. The tax accruals are presented in the consolidated balance sheets within accounts payable and accrued expenses.

Liquidity and Capital Resources

Our primary sources of liquidity were cash flows from operations, borrowings under our credit lines and sales of our common stock during the fiscal years ended September 30, 2005 and 2004. Our primary uses of cash have been to fund our working capital and capital expenditure needs, service our debt obligations, and purchase shares of our common stock during the annual stock window. We also anticipate additional cash flows to be generated from the sale of recovered assets classified as held for sale as of September 30, 2005. We believe, based on our past experience, that we can generate sufficient cash flows from operations and cash flows available under our credit facility to fund our operating and capital expenditure requirements, as well as to service our debt obligations, including our accrued client reimbursement liability, for fiscal 2006 and beyond. In the event we experience a significant adverse change in our business operations, we would likely need to secure additional sources of financing, and we may not be able to obtain additional sources of funding at reasonable rates and terms.

Cash Flows From Operating Activities

Net cash provided by operating activities totaled $37.5 million for fiscal 2005 as compared to $32.2 million for fiscal 2004. The net cash provided by operating activities was primarily from income generated from projects and slower payments of our accounts payable and accrued expense and other current liabilities. Cash flows from income generated by projects were partially offset by increases in accounts receivable and unbilled fees. The increases in unbilled fees and accounts receivable are attributable primarily to the increase in revenue during fiscal 2005 compared to fiscal 2004 due to the hurricane debris removal projects. Fluctuations in accounts payable are related to direct reimbursable expenses, where the timing of payment to subcontractors is directly related to the collection of related receivables. Additionally, increases in accounts payable and accrued expenses and accrued reimbursement liability contributed to the increase in cash provided by operating activities. These increases are timing in nature, and we expect these amounts to be paid in subsequent periods.

In fiscal year 2004, net cash provided by operating activities totaled $32.2 million as compared to $24.3 million in 2003. The increase was primarily a result of the increase in accounts payable, and income generated from projects, offset by the increase in unbilled fees and accounts receivable. Fluctuations in accounts payable are related

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to direct reimbursable expenses, where the timing of payment to sub-contractors is directly related to the collection of related receivables. In addition, the Company generated a $9.3 million of non-cash depreciation and amortization which increased cash generated from operating activities.

Approximately 80% of our revenues are billed on a monthly basis. The remaining amounts are billed when we reach certain stages of completion as specified in the contract. Payment terms for accounts receivable and unbilled fees, when billed, are net 30 days. During fiscal 2005, unbilled fees increased 3.7% to $69.7 million at September 30, 2005 from $67.2 million at September 30, 2004. The increase in unbilled fees during fiscal 2005 is related to the increase in engineering fees in fiscal 2005 as compared to fiscal 2004 due to several large debris removal projects related to the Florida hurricanes. During 2004, unbilled fees and billings in excess of cost increased by $15.2 million. The increase in 2004 resulted from the increase in engineering fees and new electronic billing procedures implemented by FDOT on new contracts, which temporarily delayed some of our FDOT billings by one to two months.

Accounts receivable increased 11.7%, to $67.5 million at September 30, 2005, from $60.4 million at September 30, 2004, primarily due to the growth in engineering fees. The allowance for doubtful accounts increased $102,000 from September 30, 2004 to September 30, 2005. The allowance for doubtful accounts decreased $39,000 at September 30, 2004.

During fiscal 2006, we expect to incur additional costs in connection with the ongoing investigations (see Note 2 for further discussions) and with the restatement of our previously issued consolidated financial statements. We expect to incur an additional $11.1 million in investigation related legal expenses and $2.7 million in overhead rate and financial statement re-audit related expenses during fiscal 2006. Additionally, we expect to spend approximately $12.0 million in client reimbursements during fiscal 2006, and an additional $24.0 million in subsequent years. We may also incur additional fees and penalties from various government regulatory agencies as a result of the final outcome of the ongoing investigations.

Cash Flows from Investing Activities

Net cash used in investing activities was $12.3 million, $16.0 million and $12.7 million in fiscal years 2005, 2004 and 2003, respectively. Investing activity typically consists of fixed asset purchases, such as survey equipment, computer equipment, furniture and leasehold improvements. However during fiscal 2005 and fiscal 2004 approximately $2.0 million and $5.9 million, respectively, were used in acquisitions and earn-out payments on a previous acquisition.

In fiscal 2005, we completed two acquisitions. On October 1, 2004 we acquired 100% of the stock of Croslin Associates, Inc. for $456,000 in cash and 11,111 shares of our common stock valued at approximately $300,000. On February 1, 2005 we acquired 100% of the stock of Land and Water Consulting, Inc. for $323,000 in cash and 33,862 shares of our common stock valued at approximately $914,000.

In fiscal 2004, we also completed two acquisitions. On June 1, 2004 we acquired 100% of the stock of TriLine Associates, Inc. for $3.7 million in cash. On July 1, 2004 we acquired 100% of the stock of W. Koo and Associates for $413,000 in cash, $250,000 in accrued additional purchase price and 71,429 shares of our common stock, for a total purchase price of $2.5 million. Additionally in fiscal 2004, we paid an earn-out payment related to the Welker acquisition in the amount of $1.2 million.

During fiscal 2006, we anticipate our capital expenditures to be approximately $11.6 million, including approximately $1.3 million relating to the first stage of implementation of our new Oracle enterprise resource planning system. We also expect to continue to pursue our long term-growth strategy by actively pursuing strategic acquisitions. During fiscal 2006, we expect to spend an additional $5.5 million for payments in connection with such acquisitions.

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Cash Flows from Financing Activities

Net cash used in financing activities for fiscal 2005 was $4.5 million, as compared to $14.5 million for fiscal 2004. The change in net cash used is primarily attributable to a decrease in net borrowings from our line of credit of $9.2 million and a decrease in the net purchases of common stock of $788,000. Net cash used in financing activities for fiscal 2004 was $14.5 million, as compared to net cash used in financing activities of $11.5 million in fiscal 2003. The increase in net cash used is primarily attributable to the increase in net payments under our line of credit, combined with an increase in the net purchases of our common stock.

Pursuant to the terms of our credit agreement, we cannot declare or pay dividends in excess of 50% of our net income. We have not previously paid cash dividends on our common stock and have no present intention of paying cash dividends on our common stock in the foreseeable future. All earnings are retained for investment in our business.

Capital Resources

We have a $58 million line of credit agreement, inclusive of $3 million in letters of credit, with Bank of America, N.A. (the “Bank”). The original expiration date on the line of credit was June 30, 2005. On June 27, 2005, we amended our revolving line of credit with the bank, effective July 1, 2005. The amendment extends the maturity date of the line of credit to June 30, 2008. The total amount of the credit line remains unchanged at $58 million, inclusive of letters of credit; however the maximum amount of letters of credit was increased from $3 million to $10 million. Although our most significant source of cash has historically been generated from operations, in the event that cash flows from operations are insufficient to cover our working capital needs, we would access our revolving line of credit facility.

The interest rate (4.36% and 2.34% at September 30, 2005 and September 30, 2004, respectively) on the revolving line of credit ranges from LIBOR plus 50 basis points to Prime minus 125 basis points if our funded debt average ratio is less than 2.5. The range increases to LIBOR plus 75 basis points to Prime minus 100 basis points if our funded debt coverage ratio is between 2.5 and 3.0. The line of credit requires us to comply with certain debt covenants, including, maintaining minimum levels of net worth, a minimum coverage ratio of certain fixed charges, and a minimum leverage ratio of earnings before interest, taxes, depreciation and amortization to funded debt (all as defined in the agreement). In June 2005, covenants requiring monthly reporting of accounts receivable were amended to require quarterly reporting. Additionally, the Bank waived any events of default caused by our failure to comply with the accounts receivable reporting covenants prior to the date of the amendment.

The amendment also included a waiver of default caused by our failure to deliver to the Bank audited financial statements for fiscal year 2005, so long as such financial statements are delivered to the Bank no later than January 31, 2007. The line of credit is collateralized by substantially all of our assets.

As of September 30, 2005 and 2004, we had no outstanding balance under the line of credit. The maximum amount borrowed under our line of credit was $13.8 million and $24.2 million during fiscal 2005 and 2004. We used cash flow from operating activities to repay amounts outstanding under our line of credit.

On March 19, 2001, we entered into a mortgage note with an original principal amount of $9.0 million due in monthly installments starting on April 16, 2001, with interest. Interest on the note is LIBOR plus the floating rate margin of not less than 65 basis points and not greater than 90 basis points. A balloon payment is due on the note on March 16, 2011. The effective interest rate on the mortgage note was 4.51% and 2.49% for the fiscal years ended September 30, 2005 and 2004, respectively. The mortgage note is collateralized by our office building located in Orlando, Florida. We used an interest rate swap (“the Swap”) agreement in order to minimize the adverse impact of the floating interest rate characteristics of our long term debt obligations. The swap effectively converts the floating interest rate on the note payable to a fixed rate of 6.28%. On March 10, 2006, our swap expired. Our previously fixed rate was converted to an adjustable rate mortgage which called for an interest rate based on the 30-day LIBOR plus a margin of .065%. We do not anticipate entering into any additional swap agreements.

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Our capital expenditures are generally for purchases of property and equipment. We spent $10.3 million, $9.6 million and $7.6 million on such expenditures in fiscal years 2005, 2004 and 2003, respectively. Our capital expenditures primarily consist of equipment, furniture and leasehold improvement purchases.

A stock offering usually takes place on an annual basis for a one week period during the month of March. The Company suspended the stock offering window for March 2006 until the final impact of the restatement of the Company’s consolidated financial statements is determined. Once the final impact is determined, and the related adjustments are recorded, the Company will likely resume the stock offering in fiscal 2007. During this offering, shares of the Company’s common stock available for sale to all full time employees of the Company, pursuant to The PBSJ Corporation Stock Ownership Plan.

We believe that our existing financial resources, together with our cash flow from operations and availability under our line of credit, will provide sufficient capital to fund our operations for fiscal year 2006 and beyond.

Inflation

The rate of inflation has not had a material impact on our operations. Moreover, if inflation remains at its recent levels, it is not expected to have a material impact on our operations for the foreseeable future.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements other than operating leases for most of our office facilities and certain equipment. Minimum operating lease obligations payable in future years are presented below in Contractual Obligations.

Related Party Transactions

We lease office space in a building which houses our Marietta, Georgia operations from BCE Properties, which is owned and controlled by James Belk. Mr. Belk is a former owner of Welker and a Vice-President and Project Director of ours. The lease was assumed in connection with our acquisition of Welker in March 2003. The rental cost of the space is $17,600 per month. On May 31, 2006, the lease expired and was not renewed. In June 2006, we moved our Marietta, Georgia operations to a new location.

We lease office space in a building which houses our Missoula, Montana operations from Cedar Enterprises, which is owned and controlled by Charlie K. Vandam. Mr. Vandam is a former owner of LWC and a Senior Program Manager of ours. The lease was assumed in connection with our acquisition of LWC in February 2005. The rental cost of the space is $9,500 per month.

We lease office space in a building which houses our Helena, Montana operations from Prickly Pear Enterprises, which is owned and controlled by Paul Callahan. Mr. Callahan is a former owner of LWC and a Vice-President and Senior Division Manager of ours. The lease was assumed in connection with our acquisition of LWC in February 2005. The rental cost of the space is $1,800 per month.

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 158 (“SFAS 158”), “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”. This Statement requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. The Company is required to adopt the provisions of SFAS 158 for the fiscal year ending September 30, 2007. The Company is still evaluating the impact of this statement on its consolidated financial statements.

In September 2006, the FASB issued FASB Statement No. 157 (“SFAS 157”), “Fair Value Measurements”. SFAS 157 prescribes a single definition of fair value as the price that would be received to sell an asset or paid to

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transfer a liability in an orderly transaction between market participants at the measurement date. The accounting provisions of SFAS 157 will be effective for the Company beginning July 1, 2008. The Company does not believe the adoption of SFAS 157 will have a material impact on its financial condition or results of operations.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108 (“SAB 108”). SAB 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements. SAB 108 requires companies to quantify misstatements using a balance sheet and income statement approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. When the effect of initial adoption is material, companies will record the effect as a cumulative effect adjustment to beginning of year retained earnings. SAB 108 will be effective for the Company beginning July 1, 2007. The Company does not believe the adoption of SAB 108 will have a material impact on its financial condition or results of operations.

In July 2006, the FASB issued Interpretation (“FIN”) No. 48 “Accounting for Uncertainty in Income Taxes – an interpretation of FASB No. 109” (“FIN 48”). This interpretation establishes guidelines and thresholds that must be met for the recognition and measurement of a tax position taken or expected to be taken in a tax return. The provisions of FIN 48 are effective for fiscal years beginning after December 31, 2006. The Company is currently evaluating the impact of adopting FIN 48 on its consolidated financial statements.

In November 2005, the FASB issued FASB Staff Position (“FSP”) FAS 115-1 and FAS 124-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments,” (“ FSP 115-1 and 124-1”) which address the determination as to when an investment is impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. FSP 115-1 and 124-1 also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. The guidance in FSP 115-1 and 124-1 amends FASB Statement No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” and Accounting Principles Board (“APB”) Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock.” FSP 115-1 and 124-1 is effective for reporting periods beginning after December 15, 2005. We have evaluated the impact of the adoption of FSP 115-1 and 124-1 and we do not believe adoption will have a significant impact on our consolidated financial statements.

In May 2005, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 154, “Accounting Changes and Error Corrections” (“SFAS 154”), which replaces APB Opinion No. 20 “Accounting Changes” and SFAS No. 3 “Reporting Accounting Changes in Interim Financial Statements.” SFAS 154 requires that a voluntary change in accounting principle be applied retrospectively with all prior period financial statements presented on the new accounting principle. SFAS 154 also requires that a change in method of depreciating or amortizing a long-lived non-financial asset be accounted for prospectively as a change in estimate, and correction of errors in previously issued financial statements should be termed a restatement. SFAS 154 is effective for accounting changes and correction of errors made in the first annual reporting period beginning after December 15, 2005. We early adopted SFAS 154 and have reported and disclosed the correction of errors in our previously reported consolidated financial statements in accordance with SFAS 154. The other reporting and disclosure requirements of SFAS 154 did not have a material impact on our consolidated financial statements.

In March 2005, the FASB issued FIN No. 47, “Accounting for Conditional Asset Retirement Obligations, an interpretation of SFAS No. 143” (“FIN 47”). FIN 47 requires conditional asset retirement obligations to be recognized if a legal obligation exists to perform asset retirement activities and a reasonable estimate of the fair value of the obligation can be made. FIN 47 clarifies that the term “conditional asset retirement obligation” as used in SFAS No. 143, “Accounting for Conditional Asset Retirement Obligations,” refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. The Company adopted the provisions of FIN 47 during the year ended September 30, 2005. No conditional asset retirement obligations were recognized and, accordingly, the adoption of FIN 47 had no effect on the Company’s consolidated financial statements.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123(R)”), which is a revision of FASB Statement No. 123, “Accounting for Stock-Based Compensation.” Statement

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123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values, beginning with the first annual period beginning after December 2005, with early adoption encouraged. We are required to adopt SFAS No. 123(R) in our first quarter of fiscal 2007, beginning October 1, 2006. The adoption of SFAS No. 123(R) is not expected to have a material impact on our results of operations, financial condition or cash flows.

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Non Monetary Assets, an amendment to Opinion No. 29, Accounting for Non Monetary Transactions.” The amendment to Opinion No. 29 eliminates the fair value exception for non monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non monetary assets that do not have commercial substance. Such an exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for non monetary asset exchanges occurring in periods beginning after June 15, 2005. We adopted this new accounting standard effective September 30, 2005. The adoption of SFAS No. 153 did not have a material impact on our consolidated financial statements.

In December 2004, the FASB issued FSP FAS 109-1 (“FSP 109”), “Application of FASB Statement No. 109, (“SFAS 109”), Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004.” FSP 109 clarifies guidance that applies to the new deduction for qualified domestic production activities. When fully phased-in, the deduction will be up to 9% of the lesser of “qualified production activities income” or taxable income. FSP 109 clarifies that the deduction should be accounted for as a special deduction under SFAS 109 and will reduce tax expense in the period or periods that the amounts are deductible on the tax return. FSP 109 is effective for us beginning fiscal 2005. The adoption of FSP 109 did not have a material impact on our financial results.

In December 2003, the FASB issued Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities” (“FIN 46R”), which replaced FIN 46. FIN 46R addresses how a business enterprise should evaluate whether it has a controlling interest in an entity through means other than voting rights. This interpretation requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or is entitled to receive a majority of the entity’s residual returns or both. The interpretation also requires disclosures about variable interest entities that the company is not required to consolidate but in which it has a significant variable interest. We are required to adopt FIN 46R immediately for entities created after December 31, 2003 and at the beginning of fiscal 2007 for all other entities. Although we have not completed our final evaluation of FIN 46R, the adoption is not expected to have a material impact on our results of operations, financial condition or cash flows.

Critical Accounting Policies

In the ordinary course of business, we make a number of estimates and assumptions relating to the reporting of results of operations and financial position in the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe the following discussion addresses our most critical accounting policies. These policies require management to exercise judgments that are often difficult, subjective and complex due to the necessity of estimating the effect of matters that are inherently uncertain.

Revenue Recognition

We recognize engineering fees from different types of services under a variety of different types of contracts. In recognizing engineering fees, we evaluate each contractual arrangement to determine the applicable authoritative accounting methodology to apply to each contract.

In the course of providing services, we principally use three types of contracts: Cost-plus contracts, Time and Materials contracts and Fixed Price contracts.

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Cost-plus Contracts. We recognize engineering fees from cost-plus contracts at the time services are performed. The amount of revenue recognized is based on our actual labor costs incurred, plus non-labor costs and the portion of the fixed negotiated fee earned to date. Included in non-labor costs are pass-through costs for client-reimbursable materials, equipment and subcontractor costs where we are responsible for engineering specifications, procurement and management of such cost components on behalf of our clients. These direct reimbursable expenses are principally passed through to our clients with minimal or no mark-up and are included in our engineering fees. Indirect expenses are recorded as incurred and are allocated to contracts.

Time and Materials Contracts. We recognize engineering fees from Time and Materials contracts at the time services are performed. The amount of revenue recognized is based on the actual number of hours we spend on the projects, multiplied by contractual rates or multipliers. In addition, our clients reimburse us for our actual out-of-pocket costs of materials and other direct reimbursable expenses that we incur in connection with our performance under these contracts. The amount of NER on a time and materials contract fluctuates based on the proportion of the actual labor spent and reimbursable costs that are incurred for each contract.

Fixed Price Contracts. We recognize engineering fees from fixed price contracts based on the percentage of completion method where fees are recognized based on the ratio of estimated costs incurred to total estimated contract costs. At the time a loss on a contract becomes known, we record the entire amount of the estimated loss.

Change orders that result from modification of an original contract are taken into consideration for revenue recognition when they result in a change of total contract value and are approved by our clients. Engineering fees relating to unapproved change orders are recognized when collected.

The Company’s federal government contracts are subject to the Federal Acquisition Regulations (“FAR”). These regulations are partially incorporated into many local and state agency contracts. The FAR limits the recovery of certain specified indirect costs on contracts subject to such regulations. In accordance with industry practice, most of the Company’s federal government contracts are subject to termination at the discretion of the client. Contracts typically provide for reimbursement of costs incurred and payment of fees earned through the termination date.

Contracts that fall under the FAR are subject to audit by the government, primarily the Defense Contract Audit Agency (“DCAA”), which reviews our overhead rates, operating systems and costs proposals. As a result of its audits, the DCAA may disallow costs if it determines that we have incorrectly or improperly accounted for such costs in a manner inconsistent with generally accepted government accounting standards.

Accrued Reimbursement Liability

The accrued reimbursement liability is an estimate related to the total impact of the overstated overhead rates billed under certain government contracts, primarily as a result of an error with respect to general and administrative expenses and the misappropriations previously described. This liability represents estimates of our future payment obligations associated with reimbursing clients for such overstated overhead rates. The estimate was developed through a detailed analysis, reimbursement settlements and discussions with various government client representatives and is dependent on assumptions made by management, which include the impact of the misappropriations and other items on the overhead rates, the government clients subject to reimbursement, the percentage of contracts with these identified government clients subject to reimbursement, the extent to which overhead rates used to bill these identified government contracts varied from the overhead rates, the profit earned on these identified government contracts and the assumed interest rate on the reimbursement amounts. A significant change in one or more of these assumptions could potentially have a material effect on the financial statements. Although false claims actions by certain state government agencies are possible under various State False Claims Acts (“State FCA”), the Company currently believes these actions are unlikely and has not accrued a liability for these actions. The State FCA allow for state and certain local government entities to recover damages from the presentation of certain false or fraudulent claims by entities in which they contract with. If false claims actions are initiated in the future by one or more of these state governmental agencies, such actions could have a material affect on the Company’s financial statements.

The Company has entered into reimbursement settlement agreements with the Florida Department of

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Transportation and the Texas Department of Transportation, its two largest clients, for $11.8 million and $4.3 million, respectively for all contract amounts through September 30, 2005. Such amounts were paid in fiscal 2006. In addition, it has reached a reimbursement settlement agreement with the Department of Justice on behalf of all of the Company’s federal clients for $6.5 million for all contract amounts through September 30, 2005. These three settlements represent approximately 60% of the accrued reimbursement liability as of September 30, 2005. The Company has started discussions with several of its other government clients, which are in various stages of settlement.

Deferred Compensation

Estimated liabilities related to defined benefit pension and postretirement programs are included in deferred compensation. These liabilities represent actuarially determined estimates of our future obligations associated with providing these benefit programs to some of our employees. The actuarial studies and estimates are dependent on assumptions made by management, which include discount rates, life expectancy of participants and rates of increase in compensation levels. These assumptions are determined based on the current economic environment at year-end.

Income Taxes

In determining net income for financial statement purposes, we must make estimates and judgments in the calculation of tax assets and liabilities and in the determination of the recoverability of deferred tax assets. Tax assets and liabilities arise from temporary differences between the tax return and the financial statement recognition of revenues and expenses.

For the past several years, we have generated research and development tax credits related to certain qualifying costs. The qualifying costs relate primarily to the Company’s project costs which management believes involved technical uncertainty. These research and development costs were incurred by the Company in the course of providing services generally under long-term client projects. Because the Company has been unable to utilize the entire amount of research and development tax credits it has generated each year, the balance sheets reflect a deferred tax asset of $5.5 million and $6.2 million at September 30, 2005 and 2004, respectively, for the unused credit carry forwards. The credits will expire beginning 2017 through 2022.

The Company’s effective tax rate is based on income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. Significant judgment is required in determining the effective tax rate and in evaluating the Company’s tax positions. The Company establishes reserves when, despite its belief that the tax return positions are fully supportable, it believes that certain positions, if challenged, will likely be resolved unfavorably to us. These reserves are adjusted in light of changing facts and circumstances, such as the progress of a tax audit or current developments in tax law. The Company’s annual tax rate includes the impact of reserve provisions and changes to reserves. While it is often difficult to predict the final outcome or the timing of resolution of any particular matter, the Company believes that its reserves reflect the probable outcome of known tax contingencies. Resolution of the tax contingencies would be recognized as an increase or decrease to the Company’s tax rate in the period of resolution. The Company has recorded a tax contingency accrual of approximately $13.5 million and $6.7 million as of September 30, 2005 and 2004, respectively, related to research and development tax credits taken on the Company’s tax return. The tax accruals are presented in the consolidated balance sheets within accounts payable and accrued expenses

Contingencies

Management estimates are inherent in the assessment of our exposure to litigation and other legal claims and contingencies. Significant management judgment is utilized in determining probable and or reasonably estimable amounts to be recorded or disclosed in our financial statements (see Accrued Reimbursement Liability above). The results of any changes in accounting estimates are reflected in the financial statements of the period in which the changes are determined.

53

Contractual Obligations

A summary of our contractual obligations as of September 30, 2005 is as follows:

(Dollars in thousands)			Payments due by period
Contractual Obligations	Total		Less than 1 year		2-3 years		4-5 years		More than 5 years
Long-term debt obligations (1)	$	7,833	$	408	$	1,024	$	1,024	$	5,377
Operating lease obligations		51,893		16,786		24,689		9,402		1,016
Capital lease obligations		1,366		559		667		140		—
Purchase obligations		1,004		1,004		—		—		—
Expected retirement benefit payments		11,965		795		1,753		1,951		7,466
Accrued client reimbursement payments		21,830		3,996		17,834		—		—
Total	$	95,891	$	23,548	$	45,967	$	12,517	$	13,859

(1) Excludes interest which is based on a variable rate.

We are obligated under various non-cancelable leases for office facilities, furniture and equipment. Certain leases contain renewal options, escalation clauses and certain other operating expenses of the properties. In the normal course of business, leases that expire are expected to be renewed or replaced by leases for other properties.

In July 2004, the Company entered into a two year Microsoft Enterprise Agreement with Microsoft Licensing, GP covering all of the Company’s Microsoft based applications licenses. The annual payment under this agreement is approximately $728,000. At September 30, 2005, we have an outstanding purchase commitment of approximately $667,000 under this agreement, all of which is included in contractual purchase obligations above.

ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk

We believe that our exposure to market risks is minimal. We do not hold market-risk sensitive instruments for trading purposes. We entered into one derivative financial instrument, a swap agreement, to hedge cash flows related to the LIBOR interest rate risk. Both at inception of the hedge and on an ongoing basis, we believe there is no ineffectiveness in the hedging relationship of interest rate risk involving interest-bearing debt and the interest-rate swap. Based on a hypothetical 1% point increase in the period ending market interest rate as of September 30, 2005, the change in the fair value of this liability would be approximately $200,000. We believe this instrument will be highly effective in hedging cash flows. We hold no other financial instruments or derivative commodity instruments to hedge any market risk, nor do we currently plan to employ them in the near future. On March 10, 2006, our swap expired. Our adjustable rate mortgage calls for an interest rate based on the 30 day LIBOR plus a margin of .065%. We do not anticipate entering into any additional swap agreements.

The interest rate (4.36% and 2.34% at September 30, 2005 and September 30, 2004, respectively) on our revolving line of credit and mortgage note ranges from LIBOR plus 50 basis points to prime minus 125 basis points if our funded debt coverage ratio is less than 2.5. The range increases to LIBOR plus 75 basis points to prime minus 100 basis points if our funded debt coverage ratio is between 2.5 to 3.0. We mitigate interest rate risk by continually monitoring interest rates and electing the lower of the LIBOR or prime rate option available under the line of credit or mortgage note. As of September 30, 2005, the fair value of the debt approximates the outstanding principal balance because of the variable rate nature of such instruments.

The interest rates under our revolving line of credit and mortgage note are variable and accordingly we have exposure to market risk. To the extent that we have borrowings outstanding, there is market risk relating to the amount of such borrowings, however, our exposure is minimal due to the short-term nature of our borrowings under our revolving line of credit and only $7.8 million outstanding principle balance under the mortgage note.

54

ITEM 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of The PBSJ Corporation:

We have audited the accompanying consolidated balance sheets of The PBSJ Corporation and subsidiaries (the “Company”) as of September 30, 2005 and 2004, and the related consolidated statements of operations, of stockholders’ equity and comprehensive income, and of cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of The PBSJ Corporation and subsidiaries as of September 30, 2005 and 2004, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2, the accompanying 2004 financial statements have been restated.

/s/ DELOITTE & TOUCHE LLP

Certified Public Accountants

Miami, Florida

January 29, 2007

55

Report of Independent Registered Certified Public Accounting Firm

To the Board of Directors and Stockholders of The PBSJ Corporation:

In our opinion, the accompanying consolidated statements of operations, stockholders’ equity and comprehensive income and cash flows for the year ended September 30, 2003 present fairly, in all material respects, the results of operations and cash flows of The PBSJ Corporation and its subsidiaries for the year ended September 30, 2003, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As discussed in Note 2, the Company has restated its consolidated financial statements for the year ended September 30, 2003.

/s/ PricewaterhouseCoopers LLP

Miami, Florida

December 12, 2003, except for Note 2, as to which the date is January 29, 2007.

56

THE PBSJ CORPORATION

Consolidated Balance Sheets

	September 30,
(Amounts in thousands, except shares and per share amounts)	2005			2004
				(As Restated
				See Note 2)
Assets
Current Assets:
Cash and cash equivalents	$	22,556		$	1,910
Marketable securities at fair value		636			573
Accounts receivable, net		67,493			60,445
Unbilled fees		69,658			67,175
Assets held for sale		9,289			—
Shareholder subscription receivable		4,276			3,929
Other current assets		2,039			2,166
Total current assets		175,947			136,198
Property and equipment, net		36,741			33,913
Cash surrender value of life insurance		9,602			8,228
Deferred income taxes		4,817			7,797
Goodwill		17,736			14,390
Intangible assets, net		1,820			3,268
Other assets		4,984			571
Total assets	$	251,647		$	204,365
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued expenses	$	84,223		$	65,771
Liabilities related to assets held for sale		4,627			—
Accrued reimbursement liability		34,772			24,119
Current portion of long-term debt		408			290
Current portion of capital leases		341			240
Accrued vacation		10,163			8,614
Billings in excess of costs		3,339			3,388
Deferred income taxes		7,568			13,483
Total current liabilities		145,441			115,905
Long-term debt, less current portion		7,425			7,828
Capital leases, less current portion		512			444
Deferred compensation		11,994			10,683
Other liabilities		8,443			6,802
Total liabilities		173,815			141,662
Stockholders’ Equity:
Common stock, par value $0.00067, 15,000,000 shares authorized, 7,720,527 and 7,913,680 shares issued and outstanding at September 30, 2005 and 2004, respectively		5			5
Retained earnings		82,991			67,066
Accumulated other comprehensive loss		(1,957	)		(2,053	)
Unearned compensation and other		(3,207	)		(2,315	)
Total stockholders’ equity		77,832			62,703
Total liabilities and stockholders’ equity	$	251,647		$	204,365

The accompanying notes are an integral part of these consolidated financial statements

57

THE PBSJ CORPORATION

Consolidated Statements of Operations

	Years Ended September 30,
(Amounts in thousands, except per share amounts)	2005			2004			2003
				(As Restated See Note 2)			(As Restated See Note 2)
Earned revenues:
Engineering fees	$	511,937		$	448,247		$	383,709
Direct reimbursable expenses		121,986			96,372			81,693
Net earned revenues		389,951			351,875			302,016
Costs and expenses:
Direct salaries and direct costs		146,299			131,521			111,991
General and administrative expenses, including indirect salaries		210,551			186,068			165,761
Misappropriation loss (recoveries), net		(10,725	)		4,854			5,075
Investigation and related costs		5,446			—			—
Total costs and expenses		351,571			322,443			282,827
Operating income		38,380			29,432			19,189
Other income (expenses):
Interest expense		(1,824	)		(1,625	)		(1,518	)
Other, net		260			617			1,561
Total other income (expenses):		(1,564	)		(1,008	)		43
Income before income taxes		36,816			28,424			19,232
Provision for income taxes		15,741			13,734			6,511
Net income	$	21,075		$	14,690		$	12,721
Net income per share:
Basic	$	2.92		$	2.03		$	1.71
Diluted	$	2.74		$	1.91		$	1.61
Weighted average shares outstanding:
Basic		7,208			7,249			7,452
Diluted		7,685			7,692			7,886

The accompanying notes are an integral part of these consolidated financial statements

58

THE PBSJ CORPORATION

Consolidated Statements of Stockholders’ Equity and Comprehensive Income

For the years ended September 30, 2005, 2004 and 2003

	Common Stock					Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Unearned Compensation and Other			Total Stockholders’ Equity
(Amounts in thousands, except share data)	Shares		Amount
Balance at September 30, 2002 (Previously Reported)	8,346,524		$	6		$	—		$	60,981		$	(501	)	$	(1,739	)	$	58,747
Cumulative effect of restatement on prior years	—			—			—			(13,852	)		(1,048	)		(189	)		(15,089	)
Balance at September 30, 2002 (As Restated See Note 2)	8,346,524			6			—			47,129			(1,549	)		(1,928	)		43,658
Comprehensive income:
Net income (As Restated See Note 2)	—			—			—			12,721			—			—			12,721
Unrealized gain on marketable securities, net of tax of $52	—			—			—			—			114			—			114
Unrealized loss on derivative, net of tax of $31	—			—			—			—			69			—			69
Minimum pension liability adjustment, net of tax of $96	—			—			—			—			143			—			143
Total comprehensive income (As Restated See Note 2)																			13,047
Sale of stock	257,782			(1	)		4,964			—			—			—			4,963
Stock issued in acquisitions	20,000			—			400			—			—			—			400
Shares purchased and retired	(716,298	)		—			(6,164	)		(6,379	)		—			—			(12,543	)
Issuance of restricted stock, net of cancellations	61,772			—			800			—			—			(708	)		92
Amortization of deferred compensation	—			—			—			—			—			444			444
Balance at September 30, 2003 (As Restated See Note 2)	7,969,780			5			—			53,471			(1,223	)		(2,192	)		50,061
Comprehensive income:
Net income (As Restated See Note 2)	—			—			—			14,690			—			—			14,690
Unrealized gain on marketable securities, net of tax of $39	—			—			—			—			62			—			62
Unrealized loss on derivative, net of tax of $146	—			—			—			—			233			—			233
Minimum pension liability adjustment, net of tax benefit of $696 (As Restated See Note 2)	—			—			—			—			(1,125	)		—			(1,125	)
Total comprehensive income (As Restated See Note 2)																			13,860
Sale of stock (As Restated See Note 2)	442,848			—			9,964			—			—			—			9,964
Stock issued in acquisitions	71,429			—			1,875			—			—			—			1,875
Shares purchased and retired	(597,086	)		—			(12,510	)		(1,095	)		—			—			(13,605	)
Issuance of restricted stock, net of cancellations (As Restated See Note 2)	26,709			—			671			—			—			(672	)		(1	)
Amortization of deferred compensation	—			—			—			—			—			549			549
Balance at September 30, 2004 (As Restated See Note 2)	7,913,680			5			—			67,066			(2,053	)		(2,315	)		62,703
Comprehensive income:
Net income	—			—			—			21,075			—			—			21,075
Unrealized gain on marketable securities, net of tax of $10	—			—			—			—			38			—			38
Unrealized loss on derivative, net of tax of $74	—			—			—			—			226			—			226
Minimum pension liability adjustment, net of tax benefit of $130	—			—			—			—			(168	)		—			(168	)
Total comprehensive income																			21,171
Sale of stock	413,641			—			11,168			—			—			—			11,168
Stock issued in acquisitions	45,995			—			1,214			—			—			—			1,214
Shares purchased and retired	(538,565	)		—			(13,543	)		(998	)		—			—			(14,541	)
Shares recovered from investigation	(174,261	)		—			(554	)		(4,152	)		—			—			(4,706	)
Issuance of restricted stock, net of cancellations	60,037			—			1,715			—			—			(1,715	)		—
Amortization of deferred compensation	—			—			—			—			—			806			806
Other	—			—			—						—			17			17
Balance at September 30, 2005	7,720,527		$	5		$	—		$	82,991		$	(1,957	)	$	(3,207	)	$	77,832

The accompanying notes are an integral part of these consolidated financial statements

59

THE PBSJ CORPORATION

Consolidated Statements of Cash Flows

	Years Ended September 30,
(Dollars in thousands)	2005			2004			2003
				(As Restated See Note 2)			(As Restated See Note 2)
Cash flows from operating activities:
Net income	$	21,075		$	14,690		$	12,721
Adjustments to reconcile net income to net cash provided by operating activities:
Increase in cash surrender value of life insurance		(835	)		(220	)		(365	)
Depreciation and amortization		9,980			9,261			8,848
Gain on sale of property		(426	)		(85	)		(296	)
Gain from shares recovered		(4,706	)		—			—
Gain from assets recovered, net		(6,526	)		—			—
Provision for bad debt and unbillable amounts		486			217			162
Provision (benefit) for deferred income taxes		(2,912	)		7,180			323
Provision for and amortization of deferred compensation and other		1,834			998			983
Change in operating assets and liabilities, net of acquisitions:
Increase in accounts receivable		(6,691	)		(7,801	)		(5,129	)
Increase in unbilled fees and billings in excess of cost		(2,227	)		(15,228	)		(9,745	)
(Increase) decrease in other current assets		(423	)		2,470			559
Decrease (increase) in other assets		(211	)		82			81
Increase in accounts payable and accrued expenses		17,274			10,176			8,643
Increase in accrued reimbursement liability		10,653			7,871			5,823
Increase in accrued vacation		1,499			871			953
Increase (decrease) in other liabilities		(371	)		1,760			740
Net cash provided by operating activities		37,473			32,242			24,301
Cash flows from investing activities:
Investment in life insurance policies		(539	)		(524	)		(309	)
Acquisitions and purchase price adjustments, net of cash acquired		(1,984	)		(5,921	)		(5,506	)
Dividends reinvested in marketable securities		(15	)		—			—
Proceeds from the sale of property and equipment		510			102			851
Purchases of property and equipment		(10,269	)		(9,636	)		(7,707	)
Net cash used in investing activities		(12,297	)		(15,979	)		(12,671	)
Cash flows from financing activities:
Borrowings under line of credit		75,352			150,014			150,197
Payments under line of credit		(75,352	)		(159,248	)		(152,979	)
Principal payments under notes and mortgage payable		(506	)		(818	)		(991	)
Principal payments under capital lease obligations		(304	)		(189	)		(20	)
Common stock:
Proceeds from sale		10,821			9,327			4,813
Payments for repurchase		(14,541	)		(13,605	)		(12,544	)
Net cash used in financing activities		(4,530	)		(14,519	)		(11,524	)
Net increase in cash and cash equivalents		20,646			1,744			106
Cash and cash equivalents at beginning of period		1,910			166			60
Cash and cash equivalents at end of period	$	22,556		$	1,910		$	166

The accompanying notes are an integral part of these consolidated financial statements.

60

The PBSJ Corporation

Notes to the Consolidated Financial Statements

1. Organization and Summary of Significant Accounting Policies

Organization and Principles of Consolidation

The consolidated financial statements include the accounts of The PBSJ Corporation and its wholly-owned subsidiaries, Post, Buckley, Schuh & Jernigan, Inc., a Florida corporation (“PBS&J”), PBS&J Construction Services, Inc., PBS&J Constructors, Inc., Post, Buckley International, Inc., Post Buckley de Mexico, S.A. de C.V., PBS&J Caribe Engineering, C.S.P., Seminole Development Corporation and Seminole Development II, Inc. (collectively, the “Company”). All material inter-company transactions and accounts have been eliminated in the accompanying consolidated financial statements. In these notes to our consolidated financial statements, the words “Company”, “we”, “our” and “us” refer to The PBSJ Corporation with its subsidiaries as the context may require.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates in these consolidated financial statements include estimated cost to complete long-term fixed price contracts, allowance for doubtful accounts and unbilled fees, accruals for litigation, estimated liabilities for self-insurance, accrued reimbursement liability, valuation allowance on deferred income tax assets and tax contingencies, estimates of useful lives of intangible assets and the allocation of purchase price paid of acquired companies. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes engineering fees from different types of services under a variety of different types of contracts. In recognizing engineering fees, the Company evaluates each contractual arrangement to determine the applicable authoritative accounting methodology to apply to each contract. Net earned revenue represents engineering fees less direct reimbursable expenses.

In the course of providing its services, the Company principally has three types of contracts from which it earns revenue: cost-plus contract, time and materials contract and fixed price contract.

Cost-plus Contracts. Under Cost-plus contracts, the Company charges clients negotiated indirect rates based on direct and indirect costs in addition to a profit component. The Company generally recognizes engineering fees at the time services are performed. The amount of revenue is based on its actual labor costs incurred plus a recovery of indirect costs and a profit component. In negotiating cost-plus contracts, the Company estimates direct labor costs and indirect costs and then adds a profit component, which is a percentage of total recoverable costs, to arrive at a total dollar value for the contract. Indirect expenses are recorded as incurred and are allocated to contracts. If the actual labor costs incurred are less than estimated, the revenues from a project will be less than estimated. If the actual labor costs incurred plus a recovery of indirect costs and profit exceed the initial negotiated total contract amount, the Company must obtain a contract modification to receive payment for such overage. If a contract modification or change order is not approved by our client, the Company may be able to pursue a claim to receive payment. Engineering fees from claims are recognized when collected.

61

Time and Materials Contracts. The Company recognizes engineering fees for Time and Materials contracts at the time services are performed. The amount of revenue is based on the actual number of hours it spends on the projects, multiplied by contractual rates or multipliers. In addition, the Company’s clients reimburse it for its actual out-of-pocket costs of materials and other direct reimbursable expenses that it incurs in connection with its performance under these contracts.

Fixed Price Contracts. For Fixed Price Contracts, the Company recognizes engineering fees based on the percentage-of-completion method where fees are recognized based on the ratio of actual cost of work performed to date to the current total estimated contract costs (generally using the cost-to-cost method). In making such estimates, judgments are required to determine potential delays or changes in schedules, the costs of materials and labor, liability claims, contract disputes, or achievement of specified performance goals. At the time a loss on a contract becomes evident and estimable, the Company records the entire amount of the estimated loss.

Change orders that result from modification of an original contract are taken into consideration for revenue recognition when it results in a change of total contract value and is approved by our clients. Engineering fees relating to unapproved change orders are recognized when collected.

The Company’s federal government contracts are subject to the Federal Acquisition Regulations (“FAR”). These regulations are partially incorporated into many local and state agency contracts. The FAR limits the recovery of certain specified indirect costs on contracts subject to such regulations. In accordance with industry practice, most of the Company’s federal government contracts are subject to termination at the discretion of the client. Contracts typically provide for reimbursement of costs incurred and payment of fees earned through the termination date.

Contracts that fall under FAR and are generally cost-plus contracts are subject to audit by the government, primarily the Defense Contract Audit Agency (“DCAA”), which reviews the Company’s overhead rates, operating systems and costs proposals. As a result of its audits, the DCAA may disallow costs if it determines that the Company has accounted for such costs in a manner inconsistent with generally accepted cost accounting standards.

Direct Reimbursable Expenses

Direct reimbursable expenses are primarily comprised of subcontractor costs and other direct non-payroll reimbursable charges including travel and travel related costs, blueprints and equipment where the Company is responsible for procurement and management of such cost components on behalf of the Company’s clients. These direct reimbursable expenses are principally passed through to our clients with minimal or no mark-up.

Capital Structure

The by-laws of the Company require that common stock held by employee shareholders who terminate employment with the Company be offered for sale at fair market value to the Company, which has right of first refusal. Should the Company decline to purchase the shares, the shares must next be offered to the Company’s profit sharing and employee stock ownership plans at fair market value, and then ultimately to full-time employees of the Company. The by-laws of the Company provide that the fair market value be determined by an appraisal. Other than agreements with certain retired Directors, as of September 30, 2005 and 2004, there is no outstanding common stock held by individuals no longer employed by the Company.

At the annual meeting of the shareholders held on January 28, 2005, the shareholders approved a proposal to authorize the Company to execute an agreement with Richard A. Wickett, our former Chairman of the Board from 2002 to February 2005 and former Chief Financial Officer from 1993 to 2004, to allow him to retain his 138,607 shares of the Company’s stock, exclusive of his shares owned through the Company’s Employee Profit Sharing and Stock Ownership Plan and Trust (“ESOP”), upon retirement and offer for sale the shares, in blocks of 46,000, 46,000 and 46,607 shares in February 2005, 2006 and 2007, respectively, at a price determined at the valuation at the fiscal year end immediately preceding the redemption period.

62

Pursuant to the Company’s by-laws, the Company is permitted to repurchase stock by delivery of a promissory note to the employee. On February 23, 2006 the Company repurchased 46,000 and 3,400 shares, respectively, of the Company’s stock from Richard A. Wickett and Kathryn J. Wilson in the original principal amounts of $1.2 million and $92,000, respectively. The notes currently bear interest at the rate of 7.5% per annum and such rate is adjusted to the then current prime rate of Bank of America on December 31^st of each year. Accrued interest and $1 of principal is due monthly on the notes with all remaining principal and accrued interest due and payable on the five year anniversary of the date of issuance. The notes are subject to the Company’s right of set off, which permits the Company to set off all claims it may have against the payee against amounts due and owing under the notes.

Pursuant to the terms of our credit agreement, we cannot declare or pay dividends in excess of 50% of our net income. We have not previously paid cash dividends on our common stock and have no present intention of paying cash dividends on our common stock in the foreseeable future. All earnings are retained for investment in our business.

Cash and Cash Equivalents

Cash equivalents consist of all highly liquid investments with an original maturity of three months or less from their dates of purchase. Cash equivalents consist primarily of money market accounts.

Income Taxes

The Company uses the asset and liability method in accounting for income taxes. Under this method the Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between tax bases and financial reporting carrying values of assets and liabilities based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is established when it is more likely than not that any of the deferred tax assets will not be realized.

Basic and Diluted Earnings Per Share

Basic net income per share has been computed by dividing net income by the weighted average number of common shares outstanding. Diluted net income per share reflects the potential dilution that could occur assuming the inclusion of dilutive potential common shares and has been computed by dividing net income by the weighted average number of common shares and dilutive potential common shares outstanding. Dilutive potential common shares include all outstanding restricted stock awards.

A reconciliation of the number of shares used in computing basic and diluted earnings per share follows:

	Years Ended September 30,
(Shares in thousands)	2005	2004	2003
Weighted average shares outstanding - Basic	7,208	7,249	7,452
Effect of dilutive unvested restricted stock	477	443	434
Weighted average shares outstanding - Diluted	7,685	7,692	7,886

Marketable Securities

Marketable securities consist of mutual funds that are considered available-for-sale and are recorded at fair value. Changes in unrealized gains and losses for available-for-sale securities are charged or credited as a component of accumulated other comprehensive income (loss), net of tax. A decline in the fair value of an

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available-for-sale security below cost that is deemed other than temporary is charged to earnings. Investment security transactions are recorded on a trade date basis. The cost basis of investments sold is determined by the specific identification method.

Accounts Receivable

Accounts receivable is presented net of an allowance for doubtful accounts of $1.2 million and $1.1 million at September 30, 2005 and 2004, respectively. The Company estimates the allowance for doubtful accounts based on management’s evaluation of the contracts involved and the financial condition of its clients. The Company regularly evaluates the adequacy of the allowance for doubtful accounts by taking into consideration such factors as the type of client – governmental agencies or private sector, trends in actual and forecasted credit quality of the client, including delinquency and payment history, general economic and particular industry conditions that may affect a client’s ability to pay, and contract performance and the change order and claim analysis. Retainer amounts were not significant as of September 30, 2005 and 2004.

Unbilled Fees and Billings in Excess of Cost

Unbilled fees represent the excess of contract revenue recognized over billings to date on contracts in process. These amounts become billable according to the contract terms, which usually consider the passage of time, achievement of certain milestones or completion of the project. Management expects that substantially all unbilled amounts will be billed and collected within one year.

Billings in excess of cost represent the excess of billings to date, per the contract terms, over revenue recognized on contracts in process.

Fair Value of Financial Instruments

The fair value of the Company’s cash, accounts receivables, unbilled fees and trade accounts payable approximates book value due to the short-term maturities of these instruments. The carrying amounts of the Company’s marketable securities, cash surrender value of life insurance plans and interest rate swap are based on quoted market values or cash surrender value at the reporting date. The fair value of the Company’s debt approximates the carrying value; as such instruments are based on variable rates of interest.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method. The Company accounts for its goodwill in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets, which requires the Company to test for goodwill impairment annually (or more frequently under certain conditions). The Company performed its annual impairment test as of September 30, 2005 and 2004 and determined that goodwill was not impaired.

We amortize the cost of other intangible assets over their estimated useful lives unless such lives are deemed indefinite. Amortizable intangible assets are reviewed for impairment whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. If assets are determined to be impaired, they are written down to the estimated fair value as required. No impairment was recorded during the years ended September 30, 2005, 2004, or 2003.

Stock Based Compensation and Stock Sales to Employees

Unvested restricted stock awarded to certain employees is measured at the estimated fair value of the stock at the grant date. The restricted stock award is recorded as compensation expense in general and administrative expenses, and reported as a separate line item in stockholders’ equity. The issuance of unvested restricted stock gives rise to unearned compensation that is amortized on a straight-line basis over the vesting period.

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Eligible employees are allowed to purchase Company stock once a year, during a specified timeframe. With the exception of those considered to be insiders, as defined, employees who receive bonuses each year are allowed to use their bonus payments received in December following the Company’s fiscal year end to make their final payment for their stock purchase. The Company has a receivable from certain of its employees in the amount of approximately $3.9 million and $3.9 million at September 30, 2005 and 2004 respectively, for their stock purchase. Such amounts were paid in the subsequent quarter to the respective fiscal year ends.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Certain equipment held under capital leases are classified as furniture and equipment and the related obligations are recorded as liabilities. Major renewals and improvements are capitalized, while repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Capital leases are amortized under the straight-line method over the lesser of the estimated useful life of the asset or the duration of the lease agreement. Capital lease amortization is included in depreciation.

Leasehold improvements are amortized over the shorter of the terms of the leases or their estimated useful lives. Cost and accumulated depreciation of property and equipment retired or sold are eliminated from the accounts at the time of retirement or sale and the resulting gain or loss is recorded in income.

Long-Lived Assets

In accordance with SFAS No. 144, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets are reviewed whenever events or changes in business circumstances indicate the carrying value of the assets may not be recoverable. If assets are determined to be impaired, they are written down to estimated fair value as required. No impairment was recorded during the years ended September 30, 2005, 2004, or 2003.

Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash, accounts receivable and unbilled fees. The Company deposits its cash with high credit quality financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurance limits.

Work performed for governmental entities accounted for approximately 77%, 79% and 79% of engineering fees for the years ended September 30, 2005, 2004 and 2003. Accounts receivable and unbilled fees from governmental entities were $48.2 million and $38.1 million, respectively, at September 30, 2005, and $47.0 million and $46.5 million, respectively, at September 30, 2004. For the years ended September 30, 2005, 2004 and 2003, engineering fees of $101.3 million, $79.4 million, and $70.0 million, respectively, were derived from various districts of the Florida Department of Transportation (“FDOT”) under numerous contracts. These revenues are primarily in the transportation segment. While the loss of any individual contract would not have a material adverse effect on the Company’s results of operations and would not adversely impact the Company’s ability to continue work under other contracts with the FDOT, the loss of all the FDOT contracts could have a material adverse effect on the Company’s results of operations.

Ongoing credit evaluations of customers are performed and generally no collateral is required. The Company provides an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

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Derivative Instruments and Hedging Activities

In March 2001, the Company entered into an interest rate swap to convert the floating interest rate on the mortgage note payable to a fixed rate. The interest rate swap converts the floating interest rate on the note payable to a fixed rate of 6.28%. The Company accounts for the interest rate swap as a cash flow hedge in accordance with SFAS No. 133, “Accounting for Derivative Financial Instruments and Hedging Activities”. The underlying terms of the interest rate swap, including the notional amount, interest rate index, duration and reset dates, are identical to those of the associated debt and therefore the hedging relationship results in no ineffectiveness. Changes in fair value are included as a component of other comprehensive loss in stockholders’ equity in our consolidated balance sheets. The net amounts paid or received are included in interest expense. On March 16, 2006, the Company’s swap expired.

Estimated Liability for Self-Insurance

The Company is self-insured up to certain limits for costs associated with general liability, workers’ compensation and employee health coverage. The Company also maintains a stop loss insurance policy with a third party insurer to limit the Company’s exposure to individual and aggregate claims made. Insurance claims and reserves include accruals of estimated settlements for known claims, as well as accruals of estimates of incurred but not reported claims, net of payments made. At September 30, 2005 and 2004, we had total self-insurance accruals reflected in accounts payable and accrued expenses in our consolidated balance sheets of $7.7 million and $7.4 million, respectively. These estimates are subject to variability due to changes in trends of losses for outstanding claims and incurred but not recorded claims, including external factors such as future inflation rates, benefit level changes and claim settlement patterns.

Comprehensive Income

Comprehensive income consists of net income and other gains and losses affecting shareholders’ investment and minimum pension liability that, under generally accepted accounting principles, are excluded from net income.

The components of other comprehensive income are as follows for the years ended September 30, 2005, 2004 and 2003:

	Years Ended September 30,								Accumulated Other Comprehensive Loss
(Dollars in thousands)	2005			2004			2003
Net income	$	21,075		$	14,690		$	12,721
Other comprehensive income:
Unrealized gain on available for sale marketable securities, net of tax		38			62			114	$	228
Unrealized gain on interest rate swap, net of tax		226			233			69		(35	)
Minimum pension liability adjustment, net of tax		(168	)		(1,125	)		143		(2,150	)
Total comprehensive income	$	21,171		$	13,860		$	13,047	$	(1,957	)

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 158 (“SFAS 158”), “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”. This Statement requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. The Company is required to adopt the provisions of SFAS 158 for the fiscal year ending September 30, 2007. The Company is still evaluating the impact of this statement on its consolidated financial statements.

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In September 2006, the FASB issued FASB Statement No. 157 (“SFAS 157”), “Fair Value Measurements”. SFAS 157 prescribes a single definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting provisions of SFAS 157 will be effective for the Company beginning July 1, 2008. The Company does not believe the adoption of SFAS 157 will have a material impact on its financial condition or results of operations.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108 (“SAB 108”). SAB 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements. SAB 108 requires companies to quantify misstatements using a balance sheet and income statement approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. When the effect of initial adoption is material, companies will record the effect as a cumulative effect adjustment to beginning of year retained earnings. SAB 108 will be effective for the Company beginning July 1, 2007. The Company does not believe the adoption of SAB 108 will have a material impact on its financial condition or results of operations.

In July 2006, the FASB issued Interpretation (“FIN”) No. 48 “Accounting for Uncertainty in Income Taxes – an interpretation of FASB No. 109” (“FIN 48”). This interpretation establishes guidelines and thresholds that must be met for the recognition and measurement of a tax position taken or expected to be taken in a tax return. The provisions of FIN 48 are effective for fiscal years beginning after December 31, 2006. The Company is currently evaluating the impact of adopting FIN 48 on its consolidated financial statements.

In November 2005, the FASB issued FASB Staff Position (“FSP”) FAS 115-1 and FAS 124-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments,” (“ FSP 115-1 and 124-1”) which address the determination as to when an investment is impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. FSP 115-1 and 124-1 also includes accounting considerations subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. The guidance in FSP 115-1 and 124-1 amends FASB Statement No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” and Accounting Principles Board (“APB”) Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock.” FSP 115-1 and 124-1 is effective for reporting periods beginning after December 15, 2005. We have evaluated the impact of the adoption of FSP 115-1 and 124-1 and we do not believe adoption will have a significant impact on our consolidated financial statements.

In May 2005, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 154, “Accounting Changes and Error Corrections” (“SFAS 154”), which replaces APB Opinion No. 20 “Accounting Changes” and SFAS No. 3 “Reporting Accounting Changes in Interim Financial Statements.” SFAS 154 requires that a voluntary change in accounting principle be applied retrospectively with all prior period financial statements presented on the new accounting principle. SFAS 154 also requires that a change in method of depreciating or amortizing a long-lived non-financial asset be accounted for prospectively as a change in estimate, and correction of errors in previously issued financial statements should be termed a restatement. SFAS 154 is effective for accounting changes and correction of errors made in the first annual reporting period beginning after December 15, 2005. We early adopted SFAS 154 and have reported and disclosed the correction of errors in our previously reported consolidated financial statements in accordance with SFAS 154. The other reporting and disclosure requirements of SFAS 154 did not have a material impact on our consolidated financial statements.

In March 2005, the FASB issued FIN No. 47, “Accounting for Conditional Asset Retirement Obligations, an interpretation of SFAS No. 143” (“FIN 47”). FIN 47 requires conditional asset retirement obligations to be recognized if a legal obligation exists to perform asset retirement activities and a reasonable estimate of the fair value of the obligation can be made. FIN 47 clarifies that the term “conditional asset retirement obligation” as used in SFAS No. 143, “Accounting for Conditional Asset Retirement Obligations,” refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. The Company adopted the provisions of FIN 47 during the year ended September 30, 2005. No conditional asset retirement obligations were recognized and, accordingly, the adoption of FIN 47 had no effect on the Company’s consolidated financial statements.

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In December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123(R)”), which is a revision of FASB Statement No. 123, “Accounting for Stock-Based Compensation.” Statement 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values, beginning with the first annual period beginning after December 2005, with early adoption encouraged. We are required to adopt SFAS No. 123(R) in our first quarter of fiscal 2007, beginning October 1, 2006. The adoption of SFAS No. 123(R) is not expected to have a material impact on our results of operations, financial condition or cash flows.

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Non Monetary Assets, an amendment to Opinion No. 29, Accounting for Non Monetary Transactions.” The amendment to Opinion No. 29 eliminates the fair value exception for non monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non monetary assets that do not have commercial substance. Such an exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for non monetary asset exchanges occurring in periods beginning after June 15, 2005. We adopted this new accounting standard effective September 30, 2005. The adoption of SFAS No. 153 did not have a material impact on our consolidated financial statements.

In December 2004, the FASB issued FSP FAS 109-1 (“FSP 109”), “Application of FASB Statement No. 109, (“SFAS 109”), Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004.” FSP 109 clarifies guidance that applies to the new deduction for qualified domestic production activities. When fully phased-in, the deduction will be up to 9% of the lesser of “qualified production activities income” or taxable income. FSP 109 clarifies that the deduction should be accounted for as a special deduction under SFAS 109 and will reduce tax expense in the period or periods that the amounts are deductible on the tax return. FSP 109 is effective for us beginning fiscal 2005. The adoption of FSP 109 did not have a material impact on our financial results.

In December 2003, the FASB issued Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities” (“FIN 46R”), which replaced FIN 46. FIN 46R addresses how a business enterprise should evaluate whether it has a controlling interest in an entity through means other than voting rights. This interpretation requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or is entitled to receive a majority of the entity’s residual returns or both. The interpretation also requires disclosures about variable interest entities that the company is not required to consolidate but in which it has a significant variable interest. We are required to adopt FIN 46R immediately for entities created after December 31, 2003 and at the beginning of fiscal 2007 for all other entities. Although we have not completed our final evaluation of FIN 46R, the adoption is not expected to have a material impact on our results of operations, financial condition or cash flows.

2. Restatement

Misappropriations of Funds

In March 2005, subsequent to the issuance of the Company’s 2004 financial statements, we discovered misappropriations of Company funds by our former Chief Financial Officer and two former employees who worked in our information systems and treasury departments, collectively, (“the participants”). The participants colluded and circumvented controls to misappropriate funds and conceal the misappropriations possibly beginning as early as 1993 until the misappropriations were discovered.

Shortly after this discovery, an investigation sub-committee was formed comprised of the three outside members of our Corporate Audit Committee. These three outside members were subsequently appointed to the Board of Directors and became the three members of the Audit Committee of the Board of Directors. The Audit

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Committee retained independent counsel to conduct an investigation and advise the Audit Committee in connection with the investigation. The independent counsel retained forensic accountants, including accountants experienced in conducting forensic audits for companies that perform contracts for federal, state and local governments to assist with the investigation.

The investigation team discovered that at least $36.6 million was misappropriated between January 1, 1998 and the discovery of the misappropriations in March 2005. The amount misappropriated prior to January 1, 1998 could not be determined because certain data for the period prior to January 1, 1998 was unavailable. The participants in the embezzlement scheme used several methods to misappropriate the funds while engaging in conduct to conceal the misappropriated amounts. This conduct included among other things, recording and changing normal recurring journal entries and overstating accruals in prior periods to facilitate improper write-offs of misappropriated funds.

The methods that the three participants in the embezzlement scheme used to conceal their activities resulted in the overstatement or understatement of amounts previously reported in our consolidated financial statements. The following table illustrates the impact of recording the misappropriations and reversing the concealment entries and recording the actual impact such entries had on costs and expenses:

(Dollars in thousands)	Years Ended September 30,
	2004			2003
	Increase / (Decrease)
Costs and expenses:
Direct salaries and direct costs	$	150		$	—
General and administrative expenses, including indirect salaries		(6,367	)		(5,133	)
Misappropriation loss		4,854			5,075
Total costs and expenses	$	(1,363	)	$	(58	)

The misappropriation loss and concealment also resulted in the overstatement of overhead rates which the Company used in connection with certain government contracts. As a result, in these instances, some of our billings to our government clients relied on or incorporated the overstated overhead rates, and as a result revenues were overstated and we incurred refund obligations to these clients. We have also recorded an accrual for the estimated reimbursement to our clients.

Overstatement of Amounts Billed for Overhead

The Company determined that the misappropriation scheme led to the overstatement of overhead rates that the Company used to determine billings in connection with certain of our government contracts. As a result, some of our government clients were overcharged for the Company’s services. During the review of the overhead expenses, the Company identified certain instances of costs erroneously included in our overhead cost pool which were unallowable under applicable regulations and an error in our calculation of our overhead rate, which related to certain general and administrative costs. The Company determined that the unallowable costs and general and administrative expense errors also led to the overstatement of overhead rates which the Company used in connection with certain of its government contracts. As a result, in these instances, some of our billings to our government clients relied on or incorporated the overstated overhead rates.

The Company determined corrected overhead rates considering the impact of the misappropriations and considering the impact of additional errors identified. The Company and its advisors have been working with its government clients to finalize the refund amount (See Note 13 for further discussion). The Company estimates that the total refund amount resulting from the overstated overhead rates is approximately $37.1 million as of fiscal 2005 ($26.1 million as of fiscal 2004), including interest that the Company will generally be required to reimburse its government clients. The Company has recorded a related reduction in revenue, an increase in interest expense and a corresponding liability in each relevant year in its restated financial statements. The impact on the Company’s financial statements from such over-billings is presented below.

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The components of the accrued reimbursement liability related to the overstated overhead rates and interest as of September 30, 2004 is as follows:

Beginning retained earnings adjustment as of October 1, 2002 related to the overstated overhead rates and the related accrued interest excluding the effect of income taxes:	$	10,860
Year ended September 30, 2003		5,802
Year ended September 30, 2004		8,453
Total	$	25,115

As of September 30, 2004 there was approximately $1.1 million and $869,000 of over billing recorded as a reduction of accounts receivable and unbilled fees, respectively, in our consolidated balance sheet as such amounts had not yet been collected from our clients. Prior to the restatement adjustment, the Company had accrued approximately $949,000 and $863,000 for a client reimbursement now included in our accrued reimbursement liability at September 30, 2004 and 2003, respectively.

The adjustments related to our consolidated statements of operations are as follows:

(Dollars in thousands)	Years Ended September 30,
	2004		2003
Reduced revenues	$	7,678	$	5,290
Interest		775		512
Total	$	8,453	$	5,802

We have restated our previously issued consolidated financial statements as of September 30, 2004 and for the years ended September 30, 2004 and 2003, primarily to reflect adjustments relating to the effects of the misappropriations and related concealment accounting and the correction of revenue amounts charged to certain of our government clients due to errors in our overhead rates, in addition to certain other adjustments.

Other Restatement Items

In connection with recording the misappropriations and concealment adjustments related to our overhead rate correction described above, the Company also identified and corrected the following other errors in its previously issued financial statements.

Unrecorded Revenue

The Company determined that it had incorrectly deferred revenue on a project and did not properly record revenue on another project in fiscal 2004. The impact of correcting this error was to increase engineering fees by $2.8 million in fiscal 2004 and increase unbilled fees by $2.8 million as of September 30, 2004.

Accounting for Defined Benefit Pension Plans

The Company also determined that its previous accounting for its post-employment benefit plans was not in accordance with SFAS No. 87, “Employers Accounting for Pensions” (“SFAS 87”). Historically, we have accounted for our deferred compensation plans by only accruing the present value of future minimum retirement payment obligations. SFAS 87 requires that amounts recognized in the financial statements be determined on an actuarial basis. In order to determine the impact of such error, the Company engaged an actuarial firm to perform a comprehensive review of our benefit plans. Accordingly, we have restated our previously issued consolidated financial statements to adjust our accumulated benefit obligation, and to defer recognition of prior service costs over the estimated remaining service period. The effect of this change was to decrease general and administrative

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expenses by $809,000 in fiscal 2004 and an increase of $370,000 in fiscal 2003. The Company has also recorded a cumulative increase to deferred compensation liability in our consolidated balance sheet of $2.4 million as of September 30, 2004, related to the recognition of previously deferred prior service costs. The Company recorded a cumulative increase to intangible assets of $647,000 (inclusive of a $325,000 decrease recorded during fiscal 2004), and a cumulative increase to accumulated other comprehensive loss of $1.9 million (inclusive of a $1.0 million increase recorded in fiscal 2004) as of September 30, 2004, respectively, related to the recognition of previously deferred prior service costs.

Accrued Wages

The Company recorded an additional $362,000 ($1.5 million related to fiscal 2004 offset by $1.1 million carryover effect of the same error related to fiscal 2003) and $353,000 in general and administrative expenses in fiscal 2004 and 2003, respectively, in connection with previously unrecorded part-time and over-time wages earned by our employees that were paid in the subsequent fiscal year. These adjustments to our consolidated statement of operations represent the net effect of the unrecorded accrual for salaries as of the end of respective years. The Company recorded an additional $1.5 million accrual (recorded in accounts payable and accrued expenses) to correct its consolidated balance sheet at September 30, 2004.

Additionally, the Company recorded an increase in direct salaries and direct costs of $736,000 during fiscal 2004 and a corresponding increase to accounts payable and accrued expenses of $736,000, in connection with labor associated with previously unrecorded revenue at September 30, 2004 (See Unrecorded Revenue adjustment explanation above).

Accounting for Leases

The Company determined that the rent expense recorded in connection with certain of its operating leases with scheduled rent increases was not in accordance with SFAS No. 13 “Accounting for Leases” and FASB Technical Bulletin (“EITF”) No. 85-3 “Accounting for Operating Leases with Scheduled Rent Increases”. The Company should have recognized rent expense by applying a straight-line method on operating leases with fixed-rate rent escalation clauses. This method requires the lessee under a lease agreement to record as expense an amount equal to the total rental payments paid over the term of the lease (including lease renewals that are “reasonably assured”) on a straight-line basis. The impact of this change was to increase rent expense, included in general and administrative expenses, by $232,000 and $326,000 for the years ended September 30, 2004 and 2003 respectively, and a corresponding increase in deferred rent, which is included in accounts payable and accrued expenses, of $755,000 as of September 30, 2004.

The Company also determined that certain leases previously classified as operating leases should have been accounted for as capital leases. As a result, we have recorded cumulative capitalized lease equipment and related capital lease obligations of $990,000 (with $320,000 of related accumulated amortization) as of September 30, 2004, and $368,000 of capitalized lease equipment and related capital lease obligations during fiscal 2004. Our consolidated statements of operations reflect an adjustment to decrease lease expense in general and administrative expenses of $209,000 and $104,000 for the fiscal years ended September 30, 2004 and 2003. Additionally, a corresponding adjustment was recorded to increase depreciation and amortization in general and administrative expenses by $195,000 and $96,000 and interest expense of $20,000 and $12,000 for the fiscal years ended September 30, 2004 and 2003, respectively.

Accounting for Employee Expense Reports

The Company recorded an additional $513,000 ($1.2 million related to fiscal 2004 offset by $681,000 carryover effect of the same error related to fiscal 2003) and $115,000 in general and administrative expenses in fiscal 2004 and 2003, respectively, in connection with previously unrecorded business expenses incurred by our employees that were reimbursed to our employees in the subsequent fiscal year. These adjustments to our consolidated statement of operations represent the net effect of the unrecorded business expenses as of the end of respective years. Such amounts are not reimbursed to us by our clients. The Company recorded an additional $1.2 million accrual (recorded in accounts payable and accrued expenses) to correct its consolidated balance sheet at September 30, 2004.

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Costs in Excess of Revenue

The Company has recorded an adjustment to accrue for losses on contracts in progress, which were expected to be completed with costs in excess of revenue. The impact of these adjustments is included in direct salaries and direct costs resulting in an increase of $50,000 and $462,000 in fiscal 2004 and 2003. The total amount of the previously unrecorded accrual, which has been included in the Company’s balance sheet as of September 30, 2004 is $1.7 million.

Other Miscellaneous Adjustments

In addition, the Company has recorded additional restatement adjustments to correct various other immaterial errors, including known errors which had not previously been corrected because the effect of the errors was not material to the financial statements.

Classification Corrections Not Impacting Net Income

Goodwill and Intangible Assets

The Company had incorrectly included its intangible asset balance in other assets in its consolidated balance sheets as of September 30, 2004. The Company recorded a decrease in other assets and a corresponding increase to intangible assets of $2.3 million as of September 30, 2004 to correct this misclassification.

Billing In Excess of Costs

The Company recorded an entry to properly classify credit balances previously recorded in unbilled fees in our consolidated balance sheets as billings in excess of costs. This resulted in an additional increase to unbilled fees and billings in excess of costs of $1.2 million as of September 30, 2004.

Accounting for Direct Reimbursable Expenses

The Company also identified certain accounting errors related to direct reimbursable expenses not being recorded in the period services were performed. The Company identified a number of sub-contractor invoices received subsequent to year-end for services performed in the prior period. The adjustment to record these transactions does not affect net income, as direct reimbursable expenses are billed directly to our clients on a dollar for dollar basis, with minimal or no mark-up. The resulting net effect (after the carry over effect of the same error related to the prior fiscal year) of this adjustment was to increase engineering fees and direct reimbursable expenses by $1.5 million and $163,000 for the years ended 2004 and 2003, respectively. These adjustments related to the classifications within the consolidated statement of operations represent the annual effect of the unrecorded accrual for sub-contractor invoices and related unbilled engineering fees as of the end of the respective years. The total amount of the previously unrecorded accruals which has been corrected in the Company’s consolidated balance sheet at September 30, 2004 is an additional accrual and increase in unbilled fees for sub-consultants expense of $8.4 million.

Accounting for Direct Salaries and Direct Costs

The Company recorded an entry to properly classify $749,000 previously recorded in general and administrative expenses in fiscal 2004 and $1.5 million and $873,000 previously recorded in direct reimbursable expenses in fiscal 2004 and 2003, respectively, in our consolidated statements of operations as direct salaries and direct costs. This resulted in an additional increase to direct salaries and direct costs of $2.2 million and $873,000 in fiscal 2004 and 2003, respectively.

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Accounting for Shareholder Subscription Receivable

The Company recorded an entry to properly classify shareholder stock receivable balances previously recorded as a reduction of accounts payable and accrued expenses in our consolidated balance sheets as shareholder subscription receivable. This resulted in an additional increase accounts payable and accrued expenses and shareholder subscription receivable of $3.9 million as of September 30, 2004.

The following table reconciles as previously reported to as restated retained earnings and accumulated other comprehensive loss:

(Dollars in thousands)	Retained Earnings			Accumulated Other Comprehensive Loss
Balance at October 1, 2002 (as previously reported)	$	60,981		$	(501	)
Effect of misappropriation and correction of related concealment entries		(4,836	)		—
Effect of overstatement of amounts billed for overhead		(10,860	)		—
Other restatement items:
Effect of accounting for defined benefit plans		1,580			(1,690	)
Effect of previously unaccrued wages		(737	)
Effect of accounting for leases		(198	)		—
Effect of costs in excess of revenue		(1,157	)		—
Effect of other miscellaneous adjustments		(195	)		—
Effect of restatement adjustments on tax accrual		2,551			642
Total effect of restatement on previously reported financial statements		(13,852	)		(1,048	)
Balance at October 1, 2002 (Restated)	$	47,129		$	(1,549	)

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The following tables summarize the effect of the restatement on the previously reported consolidated financial statements line items presented in our consolidated financial statements included in this Annual Report on Form 10-K as of September 30, 2004 and for the years ended September 30, 2004 and 2003 respectively:

Consolidated Balance Sheet

	September 30, 2004
(Dollars in thousands)	As Previously Reported			Restatement Adjustments			As Restated
Current Assets:
Cash and cash equivalents	$	2,796		$	(886	)	$	1,910
Marketable securities at fair value		573			—			573
Accounts receivable, net		64,533			(4,088	)		60,445
Unbilled fees		53,249			13,926			67,175
Shareholder subscription receivable		—			3,929			3,929
Other current assets		2,515			(349	)		2,166
Total current assets		123,666			12,532			136,198
Property and equipment, net		33,202			711			33,913
Cash surrender value of life insurance		8,372			(144	)		8,228
Deferred income taxes		799			6,998			7,797
Goodwill		14,878			(488	)		14,390
Intangible assets		—			3,268			3,268
Other assets		2,920			(2,349	)		571
Total assets	$	183,837		$	20,528		$	204,365
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued expenses	$	40,338		$	25,433		$	65,771
Accrued reimbursement liability		—			24,119			24,119
Current portion of long-term debt		290			—			290
Current portion of capital leases		—			240			240
Accrued vacation		8,614			—			8,614
Billings in excess of costs		2,215			1,173			3,388
Deferred income taxes		22,935			(9,452	)		13,483
Total current liabilities		74,392			41,513			115,905
Long-term debt, less current portion		7,828			—			7,828
Capital leases, less current portion		—			444			444
Deferred compensation		8,296			2,387			10,683
Other liabilities		6,546			256			6,802
Total liabilities		97,062			44,600			141,662
Stockholders’ Equity:
Common stock		5			—			5
Retained earnings		88,950			(21,884	)		67,066
Accumulated other comprehensive loss		(19	)		(2,034	)		(2,053	)
Unearned compensation and other		(2,161	)		(154	)		(2,315	)
Total stockholders’ equity		86,775			(24,072	)		62,703
Total liabilities and stockholders’ equity	$	183,837		$	20,528		$	204,365

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Consolidated Statements of Operations

	Year Ended September 30, 2004
(Dollars in thousands, except per share amounts)	As Previously Reported			Restatement Adjustments			As Restated
Earned revenues:
Engineering Fees	$	451,153		$	(2,906	)	$	448,247
Direct reimbursable expenses		96,227			145			96,372
Net earned revenues		354,926			(3,051	)		351,875
Costs and expenses:
Direct salaries and direct costs		128,641			2,880			131,521
General and administrative expenses, including indirect expense		193,150			(7,082	)		186,068
Misappropriation loss (recoveries), net		—			4,854			4,854
Total costs and expenses		321,791			652			322,443
Operating income		33,135			(3,703	)		29,432
Other income (expenses):
Interest expense		(830	)		(795	)		(1,625	)
Other, net		1,055			(438	)		617
Total other income (expenses):		225			(1,233	)		(1,008	)
Income before income taxes		33,360			(4,936	)		28,424
Provision for income taxes		15,107			(1,373	)		13,734
Net income	$	18,253		$	(3,563	)	$	14,690
Basic and diluted net income per share:
Basic	$	2.52		$	(0.49	)	$	2.03
Diluted	$	2.37		$	(0.46	)	$	1.91

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	Year Ended September 30, 2003
(Dollars in thousands, except per share amounts)	As Previously Reported			Restatement Adjustments			As Restated
Earned revenues:
Engineering Fees	$	389,156		$	(5,447	)	$	383,709
Direct reimbursable expenses		82,677			(984	)		81,693
Net earned revenues		306,479			(4,463	)		302,016
Costs and expenses:
Direct salaries and direct costs		110,657			1,334			111,991
General and administrative expenses, including indirect expense		169,582			(3,821	)		165,761
Misappropriation loss		—			5,075			5,075
Total Costs and expenses		280,239			2,588			282,827
Operating income		26,240			(7,051	)		19,189
Other income (expenses):
Interest expense		(993	)		(525	)		(1,518	)
Other, net		1,561			—			1,561
Total other income (expenses):		568			(525	)		43
Income before income taxes		26,808			(7,576	)		19,232
Provision for income taxes		9,617			(3,106	)		6,511
Net income	$	17,191		$	(4,470	)	$	12,721
Basic and diluted net income per share:
Basic	$	2.31		$	(0.60	)	$	1.71
Diluted	$	2.18		$	(0.57	)	$	1.61

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Consolidated Statements of Cash Flows

	Year Ended September 30, 2004
(Dollars in thousands)	As Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities:
Net income	$	18,253		$	(3,563	)	$	14,690
Adjustments to reconcile net income to net cash provided by operating activities:
Increase in cash surrender value of life insurance		(525	)		305			(220	)
Depreciation and amortization		8,691			570			9,261
Gain on sale of property		(85	)		—			(85	)
Provision for bad debt and unbillable amounts		125			92			217
Provision for deferred income taxes		9,959			(2,779	)		7,180
Provision for and amortization of deferred compensation		2,282			(1,284	)		998
Change in operating assets and liabilities, net of acquisitions:
Increase in accounts receivable		(10,230	)		2,429			(7,801	)
Increase in unbilled fees and billings in excess of cost		(10,714	)		(4,514	)		(15,228	)
Decrease in other current assets		1,867			603			2,470
Decrease (increase) in other assets		121			(39	)		82
Increase in accounts payable and accrued expenses		6,938			3,238			10,176
Increase in accrued reimbursement liability		—			7,871			7,871
Increase in accrued vacation		871			—			871
Increase in other liabilities		1,604			156			1,760
Net cash provided by operating activities		29,157			3,085			32,242
Cash flows from investing activities:
Investment in life insurance policies		(491	)		(33	)		(524	)
Acquisitions and purchase price adjustments, net of cash acquired		(5,370	)		(551	)		(5,921	)
Proceeds from the sale of property and equipment		102			—			102
Purchases of property and equipment		(9,596	)		(40	)		(9,636	)
Net cash used in investing activities		(15,355	)		(624	)		(15,979	)
Cash flows from financing activities:
Borrowings under line of credit		150,014			—			150,014
Payments under line of credit		(159,248	)		—			(159,248	)
Principal payments under notes and mortgage payable		(802	)		(16	)		(818	)
Principal payments under capital lease obligations		—			(189	)		(189	)
Common stock:
Proceeds from sale		9,345			(18	)		9,327
Payments for repurchase		(13,605	)		—			(13,605	)
Net cash used in financing activities		(14,296	)		(223	)		(14,519	)
Net increase in cash and cash equivalents		(494	)		2,238			1,744
Cash and cash equivalents at beginning of period		3,290			(3,124	)		166
Cash and cash equivalents at end of period	$	2,796		$	(886	)	$	1,910

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	Year Ended September 30, 2003
(Dollars in thousands)	As Previously Reported			Restatement Adjustments			As Restated
Cash flows from operating activities:
Net income	$	17,191		$	(4,470	)	$	12,721
Adjustments to reconcile net income to net cash provided by operating activities:
Increase in cash surrender value of life insurance		(271	)		(94	)		(365	)
Depreciation and amortization		8,391			457			8,848
Gain on sale of property		(296	)		—			(296	)
Provision for bad debt and unbillable amounts		162			—			162
Provision for deferred income taxes		2,624			(2,301	)		323
Provision for and amortization of deferred compensation		1,039			(56	)		983
Change in operating assets and liabilities, net of acquisitions:
Increase in accounts receivable		(6,041	)		912			(5,129	)
Increase in unbilled fees and billings in excess of cost		(8,969	)		(776	)		(9,745	)
Decrease in other current assets		542			17			559
Decrease (increase) in other assets		81			—			81
Increase in accounts payable and accrued expenses		8,214			429			8,643
Increase in accrued reimbursement liability		—			5,823			5,823
Increase in accrued vacation		953			—			953
Increase in other liabilities		761			(21	)		740
Net cash provided by operating activities		24,381			(80	)		24,301
Cash flows from investing activities:
Investment in life insurance policies		(370	)		61			(309	)
Acquisitions and purchase price adjustments, net of cash acquired		(5,506	)		—			(5,506	)
Proceeds from the sale of property and equipment		851			—			851
Purchases of property and equipment		(7,635	)		(72	)		(7,707	)
Net cash used in investing activities		(12,660	)		(11	)		(12,671	)
Cash flows from financing activities:
Borrowings under line of credit		150,153			44			150,197
Payments under line of credit		(152,979	)		—			(152,979	)
Principal payments under notes and mortgage payable		(991	)		—			(991	)
Principal payments under capital lease obligations		—			(20	)		(20	)
Common stock:
Proceeds from sale		4,963			(150	)		4,813
Payments for repurchase		(12,544	)		—			(12,544	)
Net cash used in financing activities		(11,398	)		(126	)		(11,524	)
Net increase in cash and cash equivalents		323			(217	)		106
Cash and cash equivalents at beginning of period		2,967			(2,907	)		60
Cash and cash equivalents at end of period	$	3,290		$	(3,124	)	$	166

Misappropriation Loss, Investigation Related Expenses and Recovery of Assets

The misappropriation loss for fiscal 2005 as previously described, is presented net of the gain from recovered assets. All assets recovered during the investigation and not yet liquidated, are classified as assets held for sale in the accompanying consolidated balance sheets and are recorded at estimated fair value, less estimated costs to sell, as of the date recovered. The recovered assets consist of personal homes, condominiums and other real estate, automobiles, funds from bank accounts, jewelry, fine-arts and cash proceeds from the liquidation of personal retirement accounts. Some of the real estate recovered was acquired subject to existing debt, liens or mortgage notes. Such debt is reported as liabilities related to assets held for sale in the accompanying

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consolidated balance sheets. The Company does not own any other assets held for sale other than those recovered during the investigation. Gain from recovered assets has been recognized at the estimated fair value of the assets recovered, less related debt and estimated costs to sell the assets. The participants also surrendered approximately 174,000 shares of the Company’s common stock. These shares were recorded at estimated fair value and a gain on recovery of misappropriated assets of $4.7 million was recognized for the year ended September 30, 2005. The gain from recovered assets is included in misappropriation loss, net of recoveries in the accompanying consolidated statements of operations for the year ended September 30, 2005.

In addition to the misappropriation loss, the Company has incurred certain professional fees and other costs that relate to the investigation of the embezzlement and the recovery of assets. These expenses include legal fees, forensic audit fees and related costs, and other costs associated with the recovery of misappropriated assets. Collectively, these costs are stated as investigation and related costs in the accompanying consolidated statements of operations and are recorded in the period the costs are incurred.

	Years Ended September 30,
(Dollars in thousands)	2005			2004		2003
Misappropriation loss	$	3,636		$	4,854	$	5,075
Less: gain from recovered assets		(14,361	)		—		—
Legal fees related to the investigation		2,344			—		—
Forensic accounting fees and related costs		2,849			—		—
Other		253			—		—
Total	$	(5,279	)	$	4,854	$	5,075

3. Marketable Securities

At September 30, 2005 and 2004, the Company held investments in marketable securities classified as available-for-sale, which primarily consisted of growth funds, growth and income funds and bond funds.

	September 30, 2005
(Dollars in thousands)	Cost		Fair Value		Unrealized Gain
Mutual Funds	$	374	$	636	$	262
	$	374	$	636	$	262
	September 30, 2004
(Dollars in thousands)	Cost		Fair Value		Unrealized Gain
Mutual Funds	$	374	$	573	$	199
	$	374	$	573	$	199

There were no unrealized losses as of September 30, 2004 and 2003. In April 2006, the Company liquidated its investment in marketable securities and realized a gain of approximately $280,000.

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4. Property and Equipment

Property and equipment consisted of the following:

	Estimated Useful Lives	September 30,
(Dollars in thousands)		2005			2004
Land	—	$	2,097		$	2,138
Building and building improvements	10 - 40 years		14,204			14,186
Furniture and equipment	3 - 7 years		40,201			37,035
Computer equipment	3 years		17,192			12,561
Vehicles	3 years		2,259			1,703
Leasehold improvements	10 years		10,366			9,258
Construction in process	—		465			—
			86,784			76,881
Less accumulated amortization and depreciation			(50,043	)		(42,968	)
Property and equipment at cost, net		$	36,741		$	33,913

The net book value of equipment recorded under capital leases was $833,000 and $671,000 at September 30, 2005 and 2004 respectively.

Depreciation and amortization expense relating to property and equipment amounted to $8.4 million, $8.4 million and $8.3 million for the years ended September 30, 2005, 2004 and 2003, respectively. The Company’s purchases of property and equipment amounted to $10.3 million, $9.6 million and $7.7 million during fiscal years 2005, 2004 and 2003, respectively. Capital expenditures during fiscal 2005 and 2004 consisted of fixed asset purchases, such as survey equipment, computer equipment, furniture and leasehold improvements.

5. Assets Held for Sale

During the course of the investigation into the misappropriations (See Note 2 for further discussion), the Company identified and recovered certain assets acquired by the participants using misappropriated Company funds. All assets recovered during the investigation and not yet liquidated, are classified as assets held for sale in the accompanying consolidated balance sheets and are recorded at estimated fair value less estimated cost to sell as of the date recovered. The recovered assets consist of personal homes, condominiums and other real estate, automobiles, funds from bank accounts, jewelry, fine-arts and cash proceeds from the liquidation of personal retirement accounts. Some of the real estate recovered was acquired subject to existing debt, liens or mortgage notes. Such debt is reported as liabilities of assets held for sale in the accompanying consolidated balance sheets. The participants also surrendered approximately 174,000 shares of the Company’s common stock. These shares were recorded at estimated fair value and a gain on recovery of misappropriated assets of $4.7 million was recognized for the year ended September 30, 2005. This gain is included in misappropriation loss, net of recoveries in the consolidated statements of operations for the year ended September 30, 2005. These shares are not included in assets held for sale as the estimated fair value of such shares was recorded as a reduction of stockholders’ equity. The Company does not have any other assets held for sale other than those recovered.

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(Dollars in thousands)	September 30, 2005
Assets held for sale at estimated fair value	$	10,180
Less: estimated costs to sell		891
Adjusted fair value of assets held for sale		9,289
Outstanding mortgage liabilities assumed		(4,627	)
Net fair value of assets held for sale	$	4,662

Additionally, the Company has classified $4.1 million in assets recovered during the investigation in other assets and $2.3 million of related liabilities in other liabilities in its consolidated balance sheet as of September 30, 2005. The Company intends to sell these assets as soon as practicable.

6. Acquisitions

The Company acquired 100% of the stock of Durham Technologies, Inc. (“DTI”) on December 1, 2002 for $1.5 million, net of cash acquired of $170,000. The purchase price has been allocated to the respective assets and liabilities acquired based upon their estimated fair values as of the acquisition date. The allocation of the purchase price resulted in assets of $1.7 million, including approximately $687,000 of goodwill, none of which is deductible for tax purposes, $484,000 of identifiable intangible assets and liabilities of $247,000. The weighted average amortization period for the identifiable intangible assets is 7.5 years. DTI’s area of specialty includes risk management and risk assessment for public sector clients, primarily Federal contracts.

On March 19, 2003, the Company acquired 100% of the stock of Welker & Associates, Inc. (“Welker”) for $4.4 million, comprised of approximately $4.0 million in cash and 20,000 shares of the Company’s common stock valued at approximately $400,000. The value of the common stock issued was determined based on the estimated fair value of the common stock as of the date of the acquisition. The purchase price has been allocated to the respective assets and liabilities based upon their estimated fair values as of the acquisition date. The allocation of the purchase price resulted in assets of $5.1 million, including approximately $2.2 million of goodwill none of which is deductible for tax purposes, $1.2 million of identifiable intangible assets and liabilities of $703,000. During 2005 and 2004, we recorded approximately $1.7 million and $1.9 million of additional goodwill in connection with performance earn-out payments. The weighted average amortization period for the identifiable intangible assets is 5.9 years. Welker’s areas of specialty include water, wastewater and storm water management for Georgia’s local governments.

On June 1, 2004, the Company acquired 100% of the stock of TriLine Associates, Inc. (“TriLine”) for $3.7 million in cash. The purchase price has been allocated to the respective assets and liabilities based upon their estimated fair values as of the acquisition date. The allocation of the purchase price resulted in assets of $4.3 million, including approximately $960,000 of intangible assets and $2.1 million of goodwill, none of which is deductible for tax purposes and liabilities of $625,000. During 2005, the Company recorded $10,000 of goodwill in connection with a purchase price adjustment. The weighted average amortization period for the identifiable intangible assets is 5.8 years. TriLine specializes in transportation, geotechnical, and environmental services.

On July 1, 2004, the Company acquired 100% of the stock of W. Koo and Associates Structural Engineers, Inc. (“WKA”) for $2.5 million, net of cash acquired of $678,000, comprised of $413,000 in cash, $250,000 in accrued additional purchase price and 71,429 shares of the Company’s common stock valued at approximately $1.9 million. The value of the common stock issued was determined based on the estimated fair value of the common stock as of the date of the acquisition. The purchase agreement calls for an adjustment of the number of shares issued based on the valuation of the Company’s stock price at September 30, 2004 so that the total number of shares issued is valued at $1.9 million based on the September 30, 2004 stock value. The purchase agreement called for an additional purchase amount of $500,000, contingent upon the satisfaction of

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certain conditions, to be paid in two installments of $250,000 on July 1, 2005 and July 1, 2006. The purchase price has been allocated to the respective assets and liabilities based on their estimated fair values as of the acquisition date. The allocation of the purchase price resulted in assets of $3.3 million, including approximately $850,000 of intangible assets and $913,000 of goodwill, none of which is deductible for tax purposes, and liabilities of $795,000. During 2005, we issued an additional 1,021 shares in connection with the purchase agreement adjustment and the Company recorded an additional $6,000 of goodwill in connection with the July 1, 2005 installment payment. The weighted average amortization period for the identifiable intangible assets is 2.8 years. WKA specializes in infrastructure improvements for public, municipal, transit, port authorities and private sector projects with a primary focus on transportation structures in California.

On October 1, 2004, the Company acquired 100% of the stock of Croslin Associates, Inc. (“Croslin”) for a purchase price of $786,000, net of cash acquired of $153,000, comprised of $456,000 in cash, $30,000 cash held in escrow and 11,111 shares of the Company’s common stock valued at approximately $300,000. The value of the common stock was based on the estimated fair value of the stock as of the date of acquisition. The purchase price has been allocated to the respective assets and liabilities based upon their estimated fair values as of the acquisition date. The allocation of the purchase price resulted in assets of $1.2 million, including approximately $40,000 of intangible assets and $454,000 of goodwill, none of which is deductible for tax purposes, and liabilities of $330,000. The weighted average amortization period for the identifiable intangible assets is 2.0 years. Croslin specializes in architectural services.

On February 1, 2005, the Company acquired 100% of the stock of Land and Water Consulting, Inc. (“LWC”) for a purchase price of $1.3 million, net of cash acquired of $13,000, comprised of $323,000 in cash, $100,000 cash held in escrow and 33,862 shares of the Company’s common stock valued at approximately $914,000. The value of the common stock was based on the estimated fair value of the stock as of the date of acquisition. The purchase price has been allocated to the respective assets and liabilities based upon their estimated fair values as of the acquisition date. The allocation of the purchase price resulted in assets of $2.5 million, including approximately $63,000 of intangible assets and $1.1 million of goodwill, none of which is deductible for tax purposes, and liabilities of $1.2 million. The weighted average amortization period for the identifiable intangible assets is 2.4 years. LWC is an environmental consulting firm in Montana.

The primary factor that contributed to a purchase price that resulted in the recognition of goodwill in our acquisitions is the intellectual capital of the skilled professionals and senior technical personnel associated with the acquired entities which does not meet the criteria for recognition as an asset apart from goodwill. The results of operations of the above acquisitions are included from the date of each acquisition. The pro forma impact of these acquisitions is not material to reported historical operations.

On April 30, 2006, the Company acquired 100% of the stock of EIP Associates (“EIP”) for a purchase price of $5.5 million in cash, net of $200,000 held in escrow. EIP is a leading provider of environmental, urban planning, water resource planning and natural resources services in California.

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7. Goodwill and Other Intangible Assets

The changes in the net carrying amounts of goodwill by segment are as follows:

	Year Ended September 30, 2005
	Transportation Services		Construction Management		Civil Engineering		Environmental Services		Total
Goodwill, beginning of year	$	3,634	$	—	$	2,187	$	8,569	$	14,390
Current year acquisitions:
Croslin		—		—		454		—		454
LWC		—		—		—		1,136		1,136
Purchase price payments - prior year acquisitions		16		—		—		1,740		1,756
Goodwill, end of year	$	3,650	$	—	$	2,641	$	11,445	$	17,736
	Year Ended September 30, 2004
	Transportation Services		Construction Management		Civil Engineering		Environmental Services		Total
Goodwill, beginning of year	$	611	$	—	$	2,187	$	6,654	$	9,452
Current year acquisitions:
Triline		2,110		—		—		—		2,110
WKA		913		—		—		—		913
Purchase price payments - prior year acquisitions		—		—		—		1,915		1,915
Goodwill, end of year	$	3,634	$	—	$	2,187	$	8,569	$	14,390

The Company’s intangible assets consisted of the following:

		September 30, 2005
(Dollars in thousands)	Estimated Useful Lives	Gross Carrying Amount		Accumulated Amortization
Client list	10 years	$	1,453	$	607
Client name recognition	2 years		100		100
Backlog	3 years		1,799		1,269
Website	7 years		200		81
Pension intangible asset	6 years		1,946		1,621
		$	5,498	$	3,678
		September 30, 2004
(Dollars in thousands)	Estimated Useful Lives	Gross Carrying Amount		Accumulated Amortization
Client list	10 years	$	1,440	$	220
Client name recognition	2 years		100		75
Backlog	3 years		1,709		484
Website	7 years		200		52
Pension intangible asset	6 years		1,946		1,296
		$	5,395	$	2,127

Amortization expense of intangible assets amounted to $1.6 million, $947,000 and $531,000 for the years ended September 30, 2005, 2004 and 2003, respectively. Estimated amortization expense is $1.1 million for fiscal year 2006, $191,000 for fiscal year 2007 and $140,000 for each of the three succeeding fiscal years.

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8. Income Taxes

The provision for income taxes consisted of the following:

	Years Ended September 30,
(Dollars in thousands)	2005			2004		2003
Current
Federal provision	$	16,845		$	6,107	$	5,766
State provision		1,808			447		422
Deferred
Federal provision (benefit)		(2,623	)		6,691		301
State provision (benefit)		(289	)		489		22
Total provision	$	15,741		$	13,734	$	6,511

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities consisted of the following:

	Years Ended September 30,
(Dollars in thousands)	2005			2004
Deferred tax liabilities:
Accounts receivable	$	(26,110	)	$	(22,703	)
Unbilled fees		(25,655	)		(23,855	)
Fixed and intangible assets		(3,419	)		(4,529	)
Other		(690	)		(481	)
Gross deferred tax liabilities		(55,874	)		(51,568	)
Deferred tax assets:
Accounts payable and accrued expenses		24,404			21,526
Accrued vacation		3,932			3,235
Federal tax credit carry forwards		5,471			6,222
Deferred compensation		4,640			4,013
Other assets		5,494			4,203
Accrued reimbursement liability		13,451			9,059
Other adjustments/misappropriation losses		—			1,297
Gross deferred tax asset		57,392			49,555
Valuation allowance		(4,269	)		(3,673	)
Net deferred tax asset		53,123			45,882
Net deferred tax liability	$	(2,751	)	$	(5,686	)

SFAS No. 109, “Accounting for Income Taxes”, requires a valuation allowance to reduce the deferred tax assets reported if it is not more likely than not that some portion or all of the deferred tax assets will be realized. At September 30, 2005 and 2004, the Company has recorded a valuation allowance against its deferred tax assets in the amount of $4.3 million and $3.7 million, respectively.

For the past several years, the Company has generated research and development tax credits related to certain qualifying costs. The qualifying costs relate primarily to the Company’s project costs which management believes involved technical uncertainty. These research and development costs were incurred by the Company in the course of providing services generally under long-term client projects. Because the Company has been unable to utilize the entire amount of research and development tax credits it has generated each year, the consolidated

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balance sheets reflect a deferred tax asset of $5.5 million and $6.2 million ($1.2 million and $2.5 million net of a corresponding valuation allowance of $4.3 million and $3.7 million) as of September 30, 2005 and 2004, respectively, for the unused credit carry forwards. The credits will expire beginning 2017 through 2022.

The deferred tax balances have been classified in the consolidated balance sheets as follows:

	Years Ended September 30,
(Dollars in thousands)	2005			2004
Current assets	$	50,663		$	36,241
Current liabilities		(54,463	)		(47,038	)
Valuation allowance		(3,768	)		(2,686	)
Net current liabilities		(7,568	)		(13,483	)
Non-current assets		6,729			13,313
Non-current liabilities		(1,411	)		(4,529	)
Valuation allowance		(501	)		(987	)
Net non-current assets		4,817			7,797
Net deferred tax liabilities	$	(2,751	)	$	(5,686	)

The Company’s effective tax rate is based on income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. Significant judgment is required in determining the effective tax rate and in evaluating the Company’s tax positions. The Company establishes reserves when, despite its belief that the tax return positions are fully supportable, it believes that certain positions, if challenged, will likely be resolved unfavorably to us. These reserves are adjusted in light of changing facts and circumstances, such as the progress of a tax audit or current developments in tax law. The Company’s annual tax rate includes the impact of reserve provisions and changes to reserves. While it is often difficult to predict the final outcome or the timing of resolution of any particular matter, the Company believes that its reserves reflect the probable outcome of known tax contingencies. Resolution of the tax contingencies would be recognized as an increase or decrease to the Company’s tax rate in the period of resolution. The Company has recorded a tax contingency accrual of approximately $13.5 million and $6.7 million as of September 30, 2005 and 2004, respectively, related to research and development tax credits taken on the Company’s tax return. The tax accruals are presented in the consolidated balance sheets within accounts payable and accrued expenses

A reconciliation of the income tax provision to taxes computed at the U.S. federal statutory rate is as follows:

	Years Ended September 30,
	2005		2004		2003
U.S. Statutory Rate	35.0	%	35.0	%	35.0	%
Federal tax credits	(19.0	)	(7.1	)	(11.4	)
State taxes net of federal benefit	3.9		2.8		2.8
Non-deductible expenses	2.0		2.5		3.3
Change in tax reserve	18.2		11.2		1.5
Change in valuation allowance	1.6		3.9		2.6
Change in statutory rate	0.8		—		—
Other	0.3		0.5		0.1
Effective tax rate	42.8	%	48.8	%	33.9	%

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9. Retirement Plans

The Company maintains a two tiered noncontributory, unfunded, nonqualified defined benefit pension plan.

The Key Employee Supplemental Option Plan (“KESOP”) is a two tiered plan that provides key officers and employees postretirement benefits. Tier one of the KESOP, known as the Key Employee Retention Program (“KERP”), provides an annual restricted stock award equal to five percent of the participant’s annual gross salary for a period of up to ten years (see Note 10). Benefits under the KERP vest at age 56 and after ten years of continuous service with the Company. Tier two of the KESOP, known as the Supplemental Income Program (“SIP”), is an unfunded plan that provides participants with retirement income for a specified period of between 5 and 15 years upon retirement, death, or disability. The plan fixes a minimum level for retirement benefits to be paid to participants based on the participants’ position at the Company and their age and service at retirement. Certain key employee agreements include an annual retainer for consulting services for a period of up to five years.

The following are the assumptions used in the measurement of the projected benefit obligation (“PBO”) and net periodic pension expense for the SIP:

	Years Ended September 30,
	2005		2004		2003
Discount rate	5.50	%	5.75	%	6.00	%

The discount rate is used to calculate the PBO. The rate used reflects a rate of return on high-quality fixed income investments that matches the duration of expected benefit payments. The Company has typically used the Moody’s Aa Corporate Bond rate as of September 30th of each year as a benchmark for this assumption.

The Company uses a September 30 measurement date for its plans. The following table provides a summary of the Company’s annual costs.

	Years Ended September 30,
(Dollars in thousands)	2005		2004		2003
Service benefits earned during period	$	648	$	432	$	393
Interest cost on projected benefit obligation		642		506		520
Amortization:
Prior service cost		325		325		325
Net loss from past experience		363		107		119
Net periodic pension cost	$	1,978	$	1,370	$	1,357

In 2005, 2004, and 2003, the Company recognized the amortization of the net loss from past experience as measured by comparing the expected position of the plan at year-end (based on the beginning of the year actuarial assumptions) and the actual position of the plan at year-end. The loss is amortized over the average remaining service period for active plan participants and is subject to the applicable corridor that is based on 10% of the greater of the PBO.

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The reconciliations of the benefit obligation based on a September 30^th measurement date are as follows:

(Dollars in thousands)	2005			2004
Change in benefit obligation:
Projected benefit obligation at beginning of year	$	11,497		$	8,717
Service cost earned during the year		648			432
Interest cost on projected benefit obligation		642			506
Loss from past experience		755			2,328
Benefits paid		(669	)		(486	)
Projected benefit obligation at end of year	$	12,873		$	11,497
Reconciliation of funded status:
Funded status	$	(12,873	)	$	(11,497	)
Unrecognized net actuarial loss		4,449			4,057
Unrecognized prior service cost		325			650
Net amount recognized	$	(8,099	)	$	(6,790	)
Amounts recognized in the consolidated balance sheet consists of:
Accrued benefit liability	$	(11,994	)	$	(10,683	)
Intangible asset		325			650
Accumulated other comprehensive income		3,570			3,243
Net amount recognized	$	(8,099	)	$	(6,790	)

The Company expects plan contributions to fund benefits paid. The following table summarizes the Company’s expected benefit payments to be paid for each of the following fiscal years:

Year Ended September 30,	Scheduled Benefit Payments
(Dollars in thousands)
2006	$	795
2007		862
2008		891
2009		899
2010		1,052
2011 through 2015		7,466
	$	11,965

10. Employee Benefit Plan and Special Programs

The Company maintains “The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust”, which is a qualified contributory 401(k) plan, a profit-sharing plan and an unleveraged employee stock ownership plan (“ESOP”), collectively the “Plans”. The Plans qualify as a deferred salary arrangement under Sections 401(a) and 401(k) of the Internal Revenue Code. Under the 401(k) plan, participating employees may elect to defer a portion of their pretax earnings, up to the maximum allowed by the Internal Revenue Service. The Company offers a discretionary matching contribution of up to 100% of the employees’ first 3% pre-tax contribution. Employees are eligible to participate in the 401(k) plan on the first date of hire. Participants in the 401(k) plan are at all times 100% vested in the employees’ contribution amounts. All matching contributions made by the Company generally vest ratably over five years of continued service. Under the profit-sharing plan, the Company makes a discretionary cash award to eligible employees, which is included in the participants’ retirement account, and can be invested in a variety of investment options. The Company may also make a discretionary stock contribution to the ESOP, which is allocated using a ratio of the individual participant’s compensation for the year to the total compensation of all eligible participants for the year.

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The Company’s matching cash contribution to the 401(k) plan was $4.0 million, $3.5 million and $3.3 million for the years ended September 30, 2005, 2004 and 2003, respectively. In addition, the Company recorded an additional benefit expense of $2.7 million, $2.7 million and $2.1 million at September 30, 2005, 2004 and 2003, respectively, as discretionary cash contributions to the profit-sharing plan and the ESOP. The Company’s accrued matching and discretionary cash contributions are included in accounts payable and accrued expenses in the accompanying consolidated balance sheets at September 30, 2005 and 2004.

The Company also maintains an additional incentive plan (“Incentive Plan”) for select employees. On an annual basis, the Company makes a discretionary cash award to fund the Incentive Plan within the Company’s limits of profitability and operating guidelines. Participation in the Incentive Plan is re-confirmed on an annual basis for all participants. The related Incentive Plan expenses for the years ended September 30, 2005, 2004 and 2003 was $10.7 million, $10.8 million and $9.5 million are included in general and administrative expenses in the accompanying consolidated statements of operations.

11. Restricted Stock

Restricted stock awards are offered throughout the year, including the KERP restricted stock, and are intended to provide long-term incentives to key employees. Awards of restricted stock are subject to transfer restrictions and risk of forfeiture until they are earned. Restricted stock shares become fully vested usually over a period of five years of continued employment and are subject to total forfeiture if the employee ceases to be employed prior to the restricted stock maturity date, except in certain limited circumstances described in the individual restricted stock award agreement. During the restriction period, holders have the rights of shareholders, including the right to vote, but cannot transfer ownership of their shares. Restricted stock is recorded at fair value on the date of issuance. Pursuant to Company guidelines, the Company may not issue restricted stock if, after issuing the shares, the total number of restricted shares outstanding would exceed ten percent of the total shares outstanding. There were 543,853 and 499,615 shares of restricted stock outstanding at September 30, 2005 and 2004. Unearned compensation is reflected as a component of stockholders’ equity and amounted to $3.1 million and $2.3 million as of September 30 2005 and 2004, respectively.

The issuance of restricted stock gives rise to unearned compensation that is amortized over the vesting period. The total amount of compensation expense recognized under these agreements during fiscal 2005, 2004 and 2003 was $806,000, $549,000 and $444,000 respectively.

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12. Long-Term Debt

The following table lists long-term debt including the respective current portions.

	September 30,
(Dollars in thousands)	2005		2004
Line of credit unused availability of $58,000 at September 30, 2005 and 2004, respectively.	$	—	$	—
Mortgage note payable due in monthly installments starting on April 16, 2001, with interest, collateralized by real property; unpaid principal due March 16, 2011. Interest at LIBOR plus the floating rate margin of not less than 65 basis points and not greater than 90 basis points (4.51% and 2.49% at September 30, 2005 and September 30, 2004, respectively).		7,833		8,118
Capital lease obligations		853		684
		8,686		8,802
Less current portion of long-term debt		408		290
Less current portion of capital lease obligations		341		240
Long-term debt and capital lease obligations	$	7,937	$	8,272

Scheduled maturities exclusive of capital leases are as follows:

Year Ending September 30,	Scheduled Maturities
(Dollars in thousands)
2006	$	408
2007		512
2008		512
2009		512
Thereafter		5,889
	$	7,833

The Company has a $58 million line of credit agreement, inclusive of $3 million in letters of credit, with Bank of America, N.A. (the “Bank”). The expiration date on the line of credit was June 30, 2005. On June 27, 2005, the Company amended its revolving line of credit with the bank, effective July 1, 2005. The amendment extends the maturity date of the line of credit to June 30, 2008. The total amount of the credit line remains unchanged at $58 million, inclusive of letters of credit; however the maximum amount of letters of credit was increased from $3 million to $10 million.

Covenants requiring monthly reporting of accounts receivable were amended to require quarterly reporting. Additionally, the Bank waived any events of default caused by the Company’s failure to comply with the accounts receivable reporting covenants prior to the date of the amendment.

The amendment also included a waiver of default caused by the Company’s failure to deliver to the Bank audited financial statements for fiscal year 2005, so long as such financial statements are delivered to the Bank no later than January 31, 2007.

The interest rate (4.36% and 2.34% at September 30, 2005 and September 30, 2004, respectively) ranges from LIBOR plus 50 basis points to Prime minus 125 basis points if the Company’s funded debt coverage ratio is less than 2.5. The range increases to LIBOR plus 75 basis points to Prime minus 100 basis points if the

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Company’s funded debt coverage ratio is between 2.5 to 3.0. The line of credit contains clauses requiring the maintenance of various covenants and financial ratios including minimum levels of net worth, a minimum coverage ratio of certain fixed charges and a minimum leverage ratio of earnings before interest, taxes, depreciation and amortization to funded debt. The Company was in compliance with or obtained a waiver of default of the line of credit financial covenants as of September 30, 2005. The line of credit is collateralized by substantially all of the Company’s assets. We used cash flow from operating activities to repay amounts outstanding under our line of credit.

On March 19, 2001, the Company entered into a mortgage note with an original principal amount of $9.0 million due in monthly installments starting on April 16, 2001, with interest. Interest on the mortgage is LIBOR plus the floating rate margin of not less than 65 basis points and not greater than 90 basis points. A balloon payment is due on the mortgage on March 16, 2011. The effective interest rate on the mortgage note was 4.51% and 2.49% for the fiscal years ended September 30, 2005 and 2004, respectively. We used an interest rate swap (“the Swap”) agreement in order to minimize the adverse impact of the floating interest rate characteristics of the Company’s long term debt obligations. The swap effectively converts the floating interest rate on the note payable to a fixed rate of 6.28%. On March 16, 2006, the Company’s swap expired. Our previously fixed rate was converted to an adjustable rate mortgage which called for an interest rate based on the 30 day LIBOR plus a margin of .065%. The mortgage agreement contains clauses requiring the maintenance of various covenants and financial ratios. On December 10, 2003, the lender approved an amendment to the mortgage agreement to reflect new conditions for the Tangible Net Worth covenant requirement under the agreement. The Company has received a written waiver from the lender as it relates to compliance for all reporting and covenant requirements under the mortgage agreement through January 31, 2007. The mortgage note is collateralized by the office building located in Maitland, Florida.

The Company’s capital leases consisted primarily of equipment. The interest rates used in computing the minimum lease payments range from 2.02% to 4.84%. The leases were capitalized using the lower of the present value of the minimum lease payments or the fair market value of the equipment at the inception of the lease.

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13. Commitments and Contingencies

The Company is obligated under various non-cancelable leases for office facilities, furniture and equipment. Certain leases contain renewal options, escalation clauses and payment of certain other operating expenses of the properties. In the normal course of business, leases that expire are expected to be renewed or replaced by leases for other properties. As of September 30, 2005, the future minimum annual lease commitments are as follows:

Years Ending September 30,	Operating Leases		Capital Leases
(Dollars in thousands)
2006	$	16,786	$	559
2007		13,846		381
2008		10,843		286
2009		6,773		121
2010		2,629		19
Thereafter		1,016		—
		51,893		1,366
Less executory and other costs		281		231
Less amount representing interest		—		282
Present value of net minimum lease payments	$	51,612	$	853

Total rent expense included in general and administrative expenses was $16.6 million, $14.6 million and $14.3 million for fiscal years ended 2005, 2004 and 2003, respectively.

As of September 30, 2005, there were various legal proceedings pending against the Company, where plaintiffs allege damages resulting from the Company’s engineering services. The plaintiffs’ allegations of liability in those cases seek recovery for damages caused by the Company based on various theories of negligence, contributory negligence or breach of contract. The Company accrues for contingencies when a loss is probable and the amounts can be reasonably estimated. As of September 30, 2005, the Company had an accrual of approximately $5.1 million for all potential and existing claims, lawsuits and pending proceedings that, in management’s opinion, are probable and can be reasonably estimated.

In July 1998, we entered into an agreement with West Frisco Development Corporation (“WFDC”) to provide various services, among which was a flood plain study to be used by WFDC, the City of Frisco and FEMA. In 2003, the City of Frisco retained the services of a third-party architecture and engineering firm in connection with the extension and widening of Teel Road which lies within the greater drainage basin included in the Company’s original flood plain study. This architecture and engineering firm’s assessment of the flood plain study determined that the Company used incorrect assumptions when calculating the size of the drainage culverts required for the increased development of the area’s transportation infrastructure. Based on this assessment, the Company has entered into negotiations with the City of Frisco to correct the drainage needs to support the Teel Road expansion project. As a result, the Company had recorded an estimated liability of $3.1 million to cover the costs associated with correcting the drainage needs of the Teel Road expansion project. Included in this estimate is the purchase of a parcel of land for $1.5 million, the remaining balance of $1.6 million is reflected in other liabilities in the accompanying consolidated balance sheets as of September 30, 2005.

The Company expects to pay these liabilities over the next one to three years. Management is of the opinion that the liabilities ultimately resulting from such existing and other pending proceedings, lawsuits and claims should not materially affect the Company’s financial position, results of operations or cash flows.

The Company maintains a full range of insurance coverage, including worker’s compensation, general and professional liability (including pollution liability) and property coverage. The Company’s insurance policies may offset the amount of loss exposure from legal actions.

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In July 2006, we entered into a settlement agreement with the State of Texas, Department of Transportation which resolves all claims that the State of Texas may have had against us for overpayments related to the restatement of overhead rates on billings on or before April 30, 2006 under contracts with that agency based on our payment of approximately $5.4 million and provides for the determination of the appropriate overhead rate for billings after April 30, 2006. In November 2006, we entered into a settlement agreement with the Florida Department of Transportation which resolves all claims that agency may have had against us for the overstatement of rates on billings through September 30, 2005 (and with respect to cost contracts through September 30, 2006) under our contracts with them based on our payment of approximately $12.5 million. This settlement agreement also provides for the determination of the appropriate overhead rate for fiscal year 2006 billings under fixed price contracts.

In January 2007, we reached a settlement agreement with the Department of Justice, Civil Division on behalf of it and all other federal agencies with which we have contracts to resolve all federal claims including claims under the Federal Civil False Claims Act, related to the overstatements of overhead rates on our contracts with federal agencies. The agreement requires approximately $6.5 million of reimbursement payments for all contract amounts through September 30, 2005.

The settlements described above are included in the accrued reimbursement liability in the Company’s consolidated financial statements. We are in discussions with our remaining government clients to enter into settlement agreements in order to satisfy any refund obligations, which are in various stages of settlement.

In the course of our investigation of the accounting irregularities and misappropriations, it was determined that there were possible violations relating to past political contributions by us and certain of our employees. The United States Attorney’s Office for the Southern District of Florida (Miami) and the Federal Bureau of Investigation are now conducting an investigation relating to improper campaign contributions including improper use of political action committees. We have produced documents and other information to the government and are fully cooperating with the investigation. At the present time, we believe it unlikely that criminal charges will be filed against us in this matter but the authorities are not precluded from bringing charges and circumstances may change.

The United States Securities & Exchange Commission is also conducting an investigation of the accounting irregularities and misappropriations of funds described above. We are fully cooperating with the investigation and have produced documents and other information to the commission. At the present time, we are unable to predict the likely outcome of this investigation.

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14. Supplemental Cash Flow Information

	Years Ended September 30,
(Dollars in thousands)	2005			2004			2003
Supplemental disclosures of cash flow information:
Cash paid for interest	$	689		$	861		$	1,014
Cash paid for income taxes	$	4,697		$	5,202		$	4,522
Acquisitions:
Fair market value of assets acquired	$	1,904		$	2,846		$	2,321
Goodwill and intangibles recorded		1,693			4,834			4,535
Fair market value of liabilities assumed		(1,475	)		(1,421	)		(950	)
Purchase Price		2,122			6,259			5,906
Less: stock issued		(1,214	)		(1,875	)		(400	)
Less: escrow withheld		(130	)		—			—
Less: accrued additional purchase price		—			(250	)		—
Prior year purchase price adjustments		1,756			1,237			—
Deposit paid		(550	)		550			—
Cash paid	$	1,984		$	5,921		$	5,506
Non-cash investing and financing activities:
Prior year purchase price adjustments to goodwill	$	—		$	678		$	—
Property and equipment financed under capital leases	$	473		$	368		$	319
Change in fair value of marketable securities available for sale	$	35		$	62		$	114
Net change in subscription receivable for shares issued	$	347		$	622		$	134

15. Segment Reporting

The Company is organized by the services provided to its customers. Under this organizational structure, the Company has four segments: Transportation Services, Construction Management, Civil Engineering and Environmental Services.

Activities in the Transportation Services business segment generally involve planning, design, right of way acquisition, development and design of intelligent transportation services and program construction management services for multiple transportation modes, including interstate and primary highways, toll roads, arterials, bridges, transit systems, airports and port facilities. The Program Management group of our Transportation segment provides many of its governmental clients the necessary resources to manage large infrastructure programs from concept through construction. Services include planning, programming, and contract support.

The Construction Management segment provides a wide range of services as an agent for the Company’s clients, including contract administration, inspection, field-testing, scheduling/estimating, instituting project controls and quality assessment. The Company provides scheduling, cost estimating and construction observation services for the project, or its services may be limited to providing construction consulting.

The Civil Engineering segment provides general civil engineering as well as specialized services to public and private clients. Included in these services are: site engineering and surveys, infrastructure engineering, master planning, disaster mitigation planning and response, asset assessment and management, emergency management and architectural and landscape design.

The Environmental Services business segment focuses on the delivery of planning, design and construction management services for private and public sector clients related to air quality management, flood insurance studies, energy planning, hazardous and solid waste management, ecological studies, wastewater treatment, water resources, environmental toxicology analysis, aquatic treatment systems and water supply and treatment.

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In fiscal 2005, we derived approximately 27% of our engineering fees from various districts and departments of the FDOT (approximately 19% of total engineering fees) and the Texas Department of Transportation (“TxDOT”) (approximately 8% of total engineering fees) under numerous contracts. The majority of these revenues were earned by our Transportation Services segment.

Segment operating income includes corporate related costs which are not generally specific to the individual segments’ operations. Such costs primarily consist of indirect salaries and general and administrative costs. The amounts are allocated to the segments based on the individual segments’ proportionate share of indirect salaries and general and administrative costs compared to total Company indirect salaries and general and administrative costs, excluding any allocable costs.

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Financial information relating to the Company’s operations by segment is as follows:

(Dollars in thousands)	Transportation Services		Construction Management		Civil Engineering			Environmental Services		Total
Year Ended September 30, 2005
Engineering fees	$	199,490	$	87,314	$	111,312		$	113,821	$	511,937
Net earned revenues		150,021		67,679		79,866			92,385		389,951
Operating income		17,638		7,250		5,691			7,801		38,380
Depreciation and amortization		3,630		1,191		2,454			2,705		9,980
Total assets		98,061		42,920		54,716			55,950		251,647
Purchases of property and equipment		3,766		1,697		2,269			2,537		10,269
Year Ended September 30, 2004
Engineering fees	$	179,743	$	77,465	$	81,841		$	109,198		448,247
Net earned revenues		135,111		58,278		69,917			88,569		351,875
Operating income		10,821		6,164		5,531			6,916		29,432
Depreciation and amortization		3,401		994		2,216			2,650		9,261
Total assets		81,948		35,318		37,313			49,786		204,365
Purchases of property and equipment		3,612		1,504		2,038			2,482		9,636
Year Ended September 30, 2003
Engineering fees	$	156,453	$	57,764	$	64,188		$	105,304	$	383,709
Net earned revenues		121,304		42,866		55,032			82,814		302,016
Operating income		12,150		2,773		(184	)		4,450		19,189
Depreciation and amortization		3,151		803		2,208			2,606		8,848
Purchases of property and equipment		2,858		1,065		1,593			2,191		7,707

16. Related Party Transactions

We lease office space in a building which houses our Marietta, Georgia operations from BCE Properties, which is owned and controlled by James Belk. Mr. Belk is a former owner of Welker and a Vice-President and Project Director of ours. The lease was assumed in connection with our acquisition of Welker in March 2003. The rental cost of the space is $17,600 per month. On May 31, 2006, the lease expired and was not renewed. In June 2006, we moved our Marietta, Georgia operations to a new location.

We lease office space in a building which houses our Missoula, Montana operations from Cedar Enterprises, which is owned and controlled by Charlie K. Vandam. Mr. Vandam is a former owner of LWC and a Senior Program Manager of ours. The lease was assumed in connection with our acquisition of LWC in February 2005. The rental cost of the space is $9,500 per month.

We lease office space in a building which houses our Helena, Montana operations from Prickly Pear Enterprises, which is owned and controlled by Paul Callahan. Mr. Callahan is a former owner of LWC and a Vice-President and Senior Division Manager of ours. The lease was assumed in connection with our acquisition of LWC in February 2005. The rental cost of the space is $1,800 per month.

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17. Allowance for Doubtful Accounts

The activity in the allowance for doubtful accounts was as follows:

	Years Ended September 30,
(Dollars in thousands)	2005			2004			2003
Balance at beginning of year		1,080			1,119			1,354
Additions charged to costs and expenses		486			217			162
Deductions		(384	)		(256	)		(397	)
Balance at end of year	$	1,182		$	1,080		$	1,119

18. Quarterly Financial Data (Unaudited)

	Fiscal 2005								Fiscal 2004
(Dollars in thousands, except per share amounts)	Q4		Q3		Q2		Q1		Q4		Q3		Q2		Q1
Operating Data:
Engineering fees	$	136,601	$	124,726	$	122,993	$	127,617	$	125,996	$	111,639	$	108,776	$	101,836
Net earned revenues		103,219		98,003		96,238		92,491		98,742		86,288		86,130		80,715
Operating income		6,788		17,309		6,581		7,702		12,728		7,328		4,082		5,294
Net income		4,218		9,223		3,489		4,145		6,434		3,622		2,008		2,626
Net income per common share
Basic	$	0.60	$	1.30	$	0.48	$	0.56	$	0.74	$	0.49	$	0.28	$	0.36
Diluted	$	0.56	$	1.22	$	0.45	$	0.53	$	0.69	$	0.46	$	0.26	$	0.34

Note: Quarterly and year-to-date computations of per share amounts are made independently; therefore, the sum of per share amounts for the quarters may not equal per share amounts for the year.

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ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Not applicable.

ITEM 9A. Controls and Procedures

Evaluation of disclosure controls and procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities and Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial disclosure.

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Audit Committee and management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e). Based upon, and as of the date of, this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective, because of the material weaknesses discussed below. In light of the material weaknesses described below, the Company performed additional procedures to ensure that the consolidated financial statements are prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Annual Report fairly present in all material respects the Company’s financial condition, results of operations and cash flows for the periods presented.

Material Weakness in Internal Control Over Financial Reporting

A material weakness (within the meaning of the Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 2) is a control deficiency, or combinations of control deficiencies, that results in more than a remote risk that a material misstatement in our annual or interim financial statements will not be prevented or detected. The Company identified the following material weaknesses:

1) Entity-Level Controls

The Company did not design and maintain effective entity-level controls as defined in the Internal Control—Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). These deficiencies related to each of the five components of internal control as defined by COSO (control environment, risk assessment, control activities, information and communication, and monitoring). Specifically:

• The Company did not design or maintain an effective control environment that fully emphasized the establishment of adherence to effective internal controls over financial reporting throughout the Company’s management and the organization. The Company did not maintain the appropriate tone at the top and did not give special consideration to the risk of management override of internal controls, including the review and approval of journal entries. This material weakness, among others described below, resulted in the restatement of the Company’s consolidated financial statements for the years ended September 30, 2004 and 2003, the unaudited condensed consolidated financial statements for each of the fiscal quarters during those years and for the fiscal quarter ended December 31, 2004, and significant audit adjustments to the consolidated financial statements for the year ended September 30, 2005, and each of the fiscal quarters during 2005.

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• The Company did not conduct a fraud risk assessment to consider the risk of material misstatements due to fraud, giving consideration to potential fraud schemes, or other internal or external factors such as pressures or incentives affecting the Company. This material weakness created an environment where financial statement fraud and the misappropriation of the Company’s assets occurred that were material to the consolidated financial statements and remained undetected for a significant period of time.

• The Company did not maintain antifraud control activities or controls to deter the misappropriation of the Company’s assets which resulted in material misstatements of the consolidated financial statements. The Company’s controls to prevent and detect management override of control activities were not adequate to prevent such activities from occurring. Additionally, the Company did not maintain the appropriate security controls or access limitation controls to the Company’s accounting system.

• The Company did not adequately communicate to all employees of the organization information regarding the importance of internal controls over financial reporting and employees’ duties and responsibilities.

• The Company did not maintain appropriate monitoring controls such as procedures to ensure periodic evaluations of internal controls to obtain evidence that controls were operating effectively. The Company did not maintain effective controls to ensure there was adequate monitoring and oversight of the work performed by the accounting and financial reporting personnel to ensure the accuracy and completeness of the consolidated financial statements.

• The Company did not have a sufficient number of personnel with an appropriate level of accounting knowledge, experience, and training in the application of accounting principles generally accepted in the United States of America (“US GAAP”), along with the financial reporting requirements of the United States Securities and Exchange Commission. The Company did not maintain the appropriate number of personnel in the internal audit department given the size and complexity of the Company’s transactions.

These conditions constitute deficiencies in both the design and operation of entity-level controls. As a result of these material weaknesses, a number of material financial statement misstatements occurred. In addition, a misappropriation of Company funds remained undetected for a significant period of time.

2) Inadequate Controls Related to the Accounting for Government Contracts

The Company did not maintain effective controls over the accounting for its government contracts subject to the Federal Acquisition Regulations. Specifically, the Company did not employ accounting personnel with adequate government contracting experience which resulted in errors in the calculation of the Company’s overhead rates used in billings to the Company’s clients. These errors include the accounting for general and administrative costs, erroneous inclusion of unallowable costs, and the overstatement of overhead rates resulting from the embezzlement scheme related to the misappropriation of the Company’s assets.

3) Inadequate Controls Related to the Closing and Financial Reporting Cycles

Several significant deficiencies in the design and operating effectiveness of internal controls over the monthly close, quarterly, and year-end reporting cycles were identified which were considered material weaknesses when aggregated. Specifically, the significant deficiencies include inaccurate account analyses, account summaries, and lack of account reconciliations. The affected accounts include fixed assets, billings in excess of costs, accrual for loss contracts, accrued wages and payroll expense, direct reimbursable expenses, direct salaries and direct costs, employee business expenses, employee advances and reimbursements, legal accruals, medical reserve, flexible spending accounts, and stockholder’s equity. Additionally, the Company did not have adequate supporting documentation including calculations, reconciliations, and basis for assumptions used to prepare the Company’s consolidated financial statements.

4) Inadequate Controls over the Cash Management Process and Safeguarding of Assets

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The Company did not maintain adequate controls over the Company’s cash accounts. Bank reconciliations were not accurately prepared or reviewed on a timely basis. Inadequate segregation of duties existed. Management override resulted in the unauthorized initiation, approval, and execution of Company checks and wire transfers. The Company also maintained a significant number of bank accounts in its general ledger with no activity. In addition, the Company has numerous bank accounts with financial institutions which could be centralized to improve controls over cash management and safeguarding.

5) Inadequate Controls Related to Revenue Recognition Cycle

The Company did not design or implement appropriate controls related to the revenue recognition cycle. Certain project revenue did not meet the criteria for deferral under US GAAP. The Company did not adequately maintain contemporaneous information supporting the calculation and estimation of the amount of revenue recognized under a specific contract (e.g., detailed support of costs to complete). In addition, the Company did not maintain a comprehensive contract administration function to address potential operational or accounting impacts of client contracts. The controls were not adequate to ensure that revenue was properly recognized when it was earned and that other criteria necessary for revenue recognition had been met.

6) Inadequate Controls over the Expenditure Cycle

The Company did not maintain effective controls to ensure the proper recording of subcontractor liabilities in the correct reporting period. As a result, during the 2005 and 2004 interim and year-end closing, adjustments were necessary to properly state accounts payable, direct reimbursable expenses, engineering fees, and unbilled fees in the Company’s interim and annual financial statements.

7) Inadequate Controls over Accounting for Commitments and Contingencies

The Company’s controls over its accounting for commitments and contingencies were not designed or operating effectively. Accruals for legal claims and contingent liabilities were not appropriately reviewed by legal counsel and the accounting and finance department on a timely basis. This resulted in audit adjustments to the 2005 and 2004 annual and interim consolidated financial statements.

8) Inadequate Controls Related to the Income Tax Cycle

The Company’s internal controls were not adequately designed or operating in a manner to effectively support the requirements of the income tax cycle. This material weakness includes failures in the design and operating effectiveness of controls which should ensure that (i) the income tax provision is determined using a methodology and related assumptions consistently applied across the entity and accounting periods; (ii) relevant, sufficient, and reliable data necessary to record, process, and report the income tax provision and related income tax accounts is captured; (iii) disclosures are prepared in accordance with US GAAP; (iv) application of the Company’s accounting policies to the tax provision and related accounts is performed timely, appropriately documented, and independently reviewed for accuracy; (v) significant estimates and judgments are based on the latest available information and management’s understanding of the Company’s operations; and (vi) Company personnel have an appropriate understanding of the accounting for income taxes. Due to the pervasive nature of these deficiencies and the absence of other effective mitigating controls, there is a more than remote likelihood that a material misstatement of the interim and annual consolidated financial statements would not have been prevented or detected.

9) Other Misapplications of US GAAP

The Company did not perform adequate evaluations of its lease agreements in order to identify and appropriately account for its capital leases, nor did the Company record straight-line rent expense, rent holidays, or escalations for its operating leases in accordance with US GAAP.

The Company did not maintain effective controls to ensure the identification and appropriate accounting for its defined benefit plans; specifically, the obligations under such defined benefit plans were not determined on an

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actuarial basis. This resulted in a material misstatement to the Company’s 2004 consolidated financial statements by an overstatement of general and administrative expense, an understatement of the deferred compensation liability, an understatement of intangible assets, and an understatement of other comprehensive loss.

The Company did not maintain effective controls to ensure the capture and timely recording of employee wages and employee business expense reimbursements. This resulted in a misstatement to the Company’s 2004 consolidated financial statements by an understatement of general and administrative expenses.

The Company did not maintain effective controls to ensure the identification and accounting for losses on contracts in progress. This resulted in an understatement of accounts payable and accrued expenses related to the accrual for loss contracts.

The Company included its intangible assets in other assets and did not properly disclose all billings in excess of costs, both of which are required to be presented separately in the Company’s consolidated balance sheet in accordance with US GAAP. As a result there was a material misstatements misclassification between other assets and intangible assets and a material misclassification of unbilled fees and billings in excess of cost on the Company’s consolidated balance sheet.

These matters result from design and operating deficiencies in controls relating to the application of US GAAP. Such deficiencies coupled with an absence of other effective mitigating controls create conditions where there exists more than a remote likelihood that a material misstatement of the interim and annual financial statements would not have been prevented or detected.

10) Inadequate Computer Access Controls

The Company’s computer security access controls were not operating effectively, allowing for the unauthorized access of the accounting system by the information technology department. This condition allowed former Company personnel to post fictitious journal entries, as well as to delete and manipulate the Company’s accounting records, which actions permitted the concealment of the misappropriations of the Company’s assets.

Changes in Internal Control Over Financial Reporting

Upon discovery of the misappropriations, the Company immediately began implementing additional and remedial controls to, among other things, safeguard cash assets, and segregate duties, and began documenting internal controls and identifying control weaknesses. We have taken steps to remedy these weaknesses by hiring additional qualified accounting personnel, including the hiring of a new Chief Financial Officer, Chief Ethics and Compliance Officer and Corporate Controller. In addition, the Company has hired new accounting personnel with substantial knowledge of financial accounting principles and procedures. We have improved the controls designed to safeguard our cash assets, and have implemented additional segregation of duties. We have also engaged an external firm to formally identify, assess and document our current internal control structure. The Company will continue to take additional steps necessary to remediate the material weaknesses described above.

Except as described above, there have been no changes to the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended September 30, 2005, that have materially affected, or are reasonably likely to affect, the Company’s internal control over financial reporting.

ITEM 9B. Other Information

None.

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PART III

ITEM 10. Directors and Executive Officers of the Registrant

The following table sets forth certain information regarding the Company’s directors, executive officers, and certain key employees as of September 30, 2005:

NAME	AGE	POSITION
John B. Zumwalt, III (3)	54	Director, CEO and Chairman of the Board
Robert J. Paulsen	53	Director, Executive Vice President, COO, Secretary and Vice Chairman of the Board
Todd J. Kenner	44	Director and President
John S. Shearer	54	Director and Senior Vice President
William D. Pruitt (2)	65	Director
Phillip E. Searcy (2)	71	Director
Frank A. Stasiowski (2)	57	Director
Donald J. Vrana (1)	43	Senior Vice President, CFO and Treasurer
Richard M. Grubel (1)	59	Senior Vice President and Assistant Secretary
Becky S. Schaffer	60	Vice President and Assistant Secretary
Richard A. Wickett (3)	63	Former Chairman of the Board
Kathryn J. Wilson (4)	34	Former Treasurer and Assistant Secretary

⁽¹⁾   - Effective October 31, 2005, Mr. Grubel stepped down as interim Chief Financial Officer and resumed his responsibilities as Senior Vice President and Director of Corporate Development for Post, Buckley, Schuh & Jernigan Inc. On November 1, 2005, Mr. Vrana was appointed Senior Vice President. On December 23, 2005, Mr. Vrana was appointed Treasurer.

⁽²⁾   - Messrs. Pruitt, Searcy and Stasiowski are non-employee members of The PBSJ Corporation Board of Directors.

⁽³⁾   - Mr. Zumwalt was elected as Chairman of the Board in January 2005, at which time Mr. Wickett resigned his position.

⁽⁴⁾   - Mrs. Wilson resigned her position as Assistant Secretary in November 2005. Mrs. Wilson is the daughter of Mr. Wickett, our former Chairman of the Board. 

John B. Zumwalt, III, 55, is a Director and the Chairman of the Board of Directors. He has been an officer and director of The PBSJ Corporation since 1995. He was Chief Operating Officer from 1998 to 2002; President and Chief Executive Officer from 2002 to 2005 and Chairman and Chief Executive Officer since January 2005. Mr. Zumwalt has been employed with the Company since 1973. He is the former President and Director of the Florida Engineering Society, the former President of the Florida Institute of Consulting Engineers and a Founder of the FES/FICE Leadership Institute. He has been recognized for his outstanding service to the engineering profession and has been awarded the Governor A.W. Gilchrist Award for public service. Mr. Zumwalt also serves on the Board of the Florida Chamber, serves on the Executive Committee of Florida Tax Watch and is also a member of the Florida Council of 100. He has also served as the past chair of the Florida Chamber Foundation and a past board member of Enterprise Florida. Mr. Zumwalt graduated from the University of Rhode Island with a degree in Civil and Environmental Engineering, and he was inducted into the Engineering Hall of Fame at the University of Rhode Island in 2004.

Robert J. Paulsen, 53, is Vice-Chairman and Secretary of the Board of Directors, and serves as the Chief Operating Officer (“COO”) of the subsidiary company Post, Buckley, Schuh and Jernigan, Inc. Prior to his appointment as COO, Mr. Paulsen served as the Company’s National Director of Transportation Services. He has been an officer of the Company since 1993 and a Director of the Corporation since 2000. Mr. Paulsen received his bachelor degree in Civil Engineering from Iowa State University in 1974.

Todd J. Kenner, 45, has been a director since 2001, and was appointed President of the Company in January 2005. He has been an officer of the Company since 1992, when he joined the Company through the acquisition of Church Engineering. From October 1992 through January 1998, Mr. Kenner directed the firm’s subsidiary activities in the western region of the United States. From January 1998 through January 2005, he served as a

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Regional Director over the Company’s West Region business interests. Concurrently, Mr. Kenner serves as the Chief Marketing Officer, where he has held that position since January 2002. Mr. Kenner received a Bachelor of Science degree in Civil Engineering from the South Dakota School of Mines and Technology.

John S. Shearer, 55, was elected Director of the Company in January 2001. He has also served as the Director of Environmental Services since 1991 for the subsidiary company Post Buckley Schuh & Jernigan, Inc. Mr. Shearer worked for the Company from 1983 to 1987 returning in 1991. Mr. Shearer currently serves on the National Board of Directors of the WateReuse Association and is a member of the Board of WMFE, the Public Broadcasting Service television and National Public Radio affiliate in Orlando Florida. He received a bachelor degree in Civil Engineering from the University of South Florida in 1973.

William D. Pruitt, 65, has been a Board Member of The PBSJ Corporation since July 2005, and has been the Chairman of the Company’s Audit Committee since 2003. Mr. Pruitt also serves as Chairman of the audit committee of KOS Pharmaceuticals, Inc., a fully integrated specialty pharmaceutical company, where he has held that position since 2004. He has also been a past Chairman of the Audit Committee for Adjoined Consulting, Inc., which is was a full-service management consulting firm, since 2000. Adjoined Consulting Inc. was merged into Kanbay International, a global consulting firm with approximately 6,000 employees in February 2006. Mr. Pruitt was also the Managing Partner from 1980 to 1999 for Arthur Andersen LLP’s Florida, Caribbean and Venezuela operations. Mr. Pruitt has a Bachelor of Business Administration from the University of Miami and is a Certified Public Accountant (inactive).

Phillip E. Searcy, 72, was appointed Director of the Company in July 2005, after previously serving on the Company’s CAC. Mr. Searcy had previously been employed by the Company in November 1972 until his retirement in 1996. Throughout his career with the Company, Mr. Searcy served in several key positions including Director of Environmental Services, Chief Operating Officer, Corporate Secretary, and Chairman of the Board, a position he held for a total of nine years. Mr. Searcy is a recognized technical expert in environmental engineering and has focused much of his time to the development of organizational improvements for the Company. He is credited with creating the “Services” concept for the national expansion of the Company’s technical services. He was also instrumental in leading the firm’s Employee Incentive Program toward a more performance-based reward program. He now serves as Chairman of the Company’s Executive Compensation Committee and the Governance Committee. Mr. Searcy received his Bachelor of Science in Civil Engineering and a Master of Science in Engineering from the University of Florida. He is a registered professional engineer in Florida and Virginia.

Frank A. Stasiowski, FAIA, 57, has been a Director of the Corporation since July 2005. He also serves on the Board of Group GSA, LTD., an architectural services firm in Sydney, Australia and Rodgers Consulting, a land asset improvement consulting firm Germantown, Maryland. He is a former member of the Board of Directors of Austin Veum Robbins Partners (“AVRP”) and Cornoyer Hedrick Architects. AVRP is an architecture, interior design and engineering firm in San Diego, California and Cornoyer Hedrick Architects is an architecture firm in Phoenix, Arizona. Mr. Stasiowski is also President, Chief Executive Officer and a founding owner of PSMJ Resources, Inc., a global publishing, education, consulting and trade show company. Mr. Stasiowski is a licensed architect with degrees from the Rhode Island School of Design and a Master degree in Business Administration from Bryant University.

Donald J. Vrana, 43, is the Company’s Chief Financial Officer and Treasurer. He has been an officer and director since his hire on October 31, 2005. From 1996 to 2005, he was employed at SITEL Corporation in various positions, most recently as Chief Accounting Officer, Controller and Treasurer. SITEL is a publicly traded, leading global provider of outsourced customer support services. From 1991-1996 he was Associate Vice President and Director of Tax and Financial Reporting for FirsTier Financial, Inc., a multi-bank financial institution. From 1987 through 1991 Mr. Vrana was a Tax and Financial Analysis Project Manager for Union Pacific Railroad, and from 1983 through 1987 a Senior Supervisor of KPMG Peat Marwick. Mr. Vrana has a Bachelor of Science in Business Administration from the University of Nebraska, a Master of Business Administration degree from Creighton University, and is a Certified Public Accountant.

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Richard M. Grubel, 59, is a Senior Vice President and Director of Corporate Development for Post, Buckley, Schuh & Jernigan Inc. Mr. Grubel also serves as an Assistant Secretary for the Company. He has been employed with the Company for the past 21 years in various capacities, including Information Technology Director, Real Estate Director and most recently interim Chief Financial Officer. His current responsibilities include the coordination of the Company’s merger and acquisition program, business planning and analysis, strategic initiatives, and special projects in support of the Board of Directors. Prior to joining the Company, Mr. Grubel held management positions at two Fortune 500 companies. Mr. Grubel received his bachelor degree in Economics and Business and his Master of Business Administration degree, both from Rutgers University.

Becky S. Schaffer, 60, has served as Corporate Counsel, handling all legal matters for the Company and Senior Vice President for Post Buckley Schuh & Jernigan, Inc. since 1994. Mrs. Schaffer also serves as Secretary for the Company. From 1989 to 1994, she was Vice President and Senior Claims Counsel for Fidelity National Title Insurance Company. From 1986 to 1989, she served as General Counsel, Vice President, Secretary and Compliance Officer for Financial Federal Savings and Loan Association of Dade County, Florida. From 1983 to 1986, Mrs. Schaffer was in general private practice with an emphasis on commercial litigation and collection and real estate. From 1983 to 1981 she held the position of staff counsel for Belcher Oil Company. Ms. Schaffer has a Bachelor of Science from Auburn University and graduated from the Nova University Center for the Study of Law. She was admitted to the Florida Bar in 1981.

Richard A. Wickett, 63, was appointed Chairman of the Board in 2002 and retired in February 2005. He previously served as the Company’s Chief Financial Officer 1993 to 2004. Mr. Wickett also serves as First Vice Chairman of the Board of Directors of Eastern Financial Federal Credit Union, a one-billion-dollar credit union serving various business interests of its members within the United States. Prior to joining the Company in 1973, he was an Audit Manager with the international firm of Coopers & Lybrand, Certified Public Accountants. He received a bachelor degree in accounting from the University of Miami in 1965 and is a Certified Public Accountant in Florida. Mr. Wickett is the father Kathryn J. Wilson, the Company’s former Treasurer and Assistant Secretary.

Kathryn J. Wilson, 34, began her career with the Company as an intern while completing her undergraduate and graduate studies. In 1999 she began her professional career with the Company as an accounting manager. In 2003, she was appointed Associate Vice President and Controller of PBS&J. Mrs. Wilson was appointed Assistant Secretary of the Company in 2004. In 2005 she was appointed as the Company’s Treasurer and Vice President of PBS&J, where she held those positions until her resignation in January 2006. Mrs. Wilson has a bachelor degree in accounting from Florida State University and a master degree in Accounting from Florida International University, and is a licensed Certified Public Accountant in Florida and South Carolina. Ms. Wilson is the daughter of Richard A. Wickett, the Company’s former Chairman of the Board.

Committees of the Board of Directors

Corporate Audit Committee

The CAC was originally established to review, act on and report to the Board of Directors on various auditing and accounting matters, including the selection of our independent auditors, the monitoring of the rotation of the partners of the independent auditors, the review of our financial statements, the scope of the annual audits, fees to be paid to the auditors, the performance of our independent auditors and our accounting practices. After the Board of Directors established the Audit Committee, the CAC was transformed into the Corporate Advisory Counsel, and is now a sub-committee of the Audit Committee.

Audit Committee

The Audit Committee consists of Messrs. Pruitt (Chairperson), Searcy and Stasiowski. Our Board of Directors has determined that Mr. Pruitt is an independent audit committee financial expert as such term is defined by the Securities and Exchange Commission. The Audit Committee’s principal functions include the oversight of the financial reports and other written financial information filed by the Company with the Securities and

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Exchange Commission, the quality and integrity of the Company’s financial statements, the effectiveness of the Company’s internal control over financial reporting, the Company’s compliance with legal and regulatory requirements. The Audit Committee is also responsible for the oversight of various auditing and accounting matters, including the selection of our independent public accountants, determining the independence of our independent public accountants, the scope of the audit procedures, the nature of all audit and non-audit services to be performed, the fees to be paid to the independent public accountants, the performance of our independent public accountants and our accounting practices and policies. The Audit Committee also receives and reviews complaints regarding accounting and auditing matters, including anonymous submissions by employees regarding questionable accounting or auditing matters. During fiscal 2005, the Audit Committee met 25 times.

Executive Compensation Committee

The Executive Compensation Committee consists of Messrs. Searcy (Chairperson), Pruitt and Stasiowski. The Executive Compensation Committee ensures that levels of compensation for the Company’s executive officers are justifiable, have a reasonable relationship to performance, and integrate best-industry practices. The Compensation Committee determines the salaries and incentive compensation of our officers and directors and provides recommendations for the salaries and incentive compensation of our other employees. The Executive Compensation Committee met four times during fiscal 2005.

Governance Committee

The Governance Committee was established during the first quarter of fiscal 2006. The primary function of the Governance Committee is to develop and recommend to our Board all corporate governance guidelines applicable to the Company and to apply those guidelines to the Company’s overall long-term strategies and future growth plans.

Compensation Committee Interlocks and Insider Participation

During fiscal 2005, Messrs. Searcy, Pruitt and Stasiowski served on our Compensation Committee. Mr. Searcy was appointed Director of the Company in July 2005, and had previously been employed by the Company in November 1972 until his retirement in 1996. Throughout his career with the Company, Mr. Searcy served in several key positions including Director of Environmental Services, Chief Operating Officer, Corporate Secretary, and Chairman of the Board. During fiscal 2005, none of our executive officers served on the compensation committee of any other entity, any of whose respective directors or executive officers served either on our Board of Directors or on our Compensation Committee.

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Performance Graph

The following graph shows a comparison of the five-year cumulative total shareholder return for our common stock with the S&P 500 Index and a weighted peer group index. The peer group index consists of other engineering firms the Company uses to benchmark its performance. The graph assumes a $100 investment on September 30, 2001 in our common stock, the S&P 500 Index and the peer group index.

]

Section 16(A) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and executive officers, and persons who own more than 10% of the Company’s Common Stock, to file with the Securities and Exchange Commission reports of ownership and changes in ownership of Common Stock. Officers, directors and greater than 10% beneficial owners are required by Securities and Exchange Commission regulations to furnish the Company with copies of all Section 16(a) forms they file for review. Based on this review, we believe that during the 2005 fiscal year, there was no failure by any such person to timely file a report under Section 16(a) of the Exchange Act.

Code of Ethics

On September 29, 2003, the Board of Directors approved and adopted a code of ethics for the Company’s Principal Executive Officer, Principal Financial Officer, Principal Operations Officer and Principal Accounting Officer, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 406 of the Sarbanes-Oxley Act of 2002.

On August 14, 2006, the Board of Directors approved and adopted The PBSJ Corporation Code of Conduct, Building for the Future: Our Values, Principles, and Standards, as a statement of the Company’s core business ethics and compliance standards and values. These standards contain the Company’s core expectations as to the manner in which employees will conduct business on behalf of The PBSJ Corporation and its subsidiaries. All of our employees are required to abide by our standards of business ethics and conduct to ensure that the Company operates in a consistent legal and ethical manner.

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ITEM 11. Executive Compensation

The following table sets forth all compensation paid during the year ended September 30, 2005, to the Company’s Chief Executive Officer and the next four highest paid executive officers, collectively know as the “Named Officers.” Except as listed below, there are no stock options/SARS or any other compensation paid to executive officers.

	Annual Compensation				Long-term Compensation
Name and Principal Position	Year	Salary ($)	Bonus ($) (1)	Other Annual Compensation (2)	Restricted Stock Award(s)	All Other Compensation
John B. Zumwalt, III.	2005	280,000	220,000	*	—	—
Chairman of the Board and	2004	267,500	190,000	*	—	—
Chief Executive Officer	2003	257,500	200,000	*	—	—
Robert J. Paulsen	2005	270,000	180,000	*	—	—
Senior Executive Vice President	2004	254,500	190,000	*	—	—
and Chief Operating Officer	2003	235,000	200,000	*	—	—
Todd J. Kenner	2005	250,000	195,000	*	—	—
President and National Service	2004	217,500	170,000	*	—	—
Director	2003	191,250	150,000	*	—	—
John S. Shearer	2005	225,000	135,000	*	—	—
Executive Vice President and	2004	216,250	150,000	*	—	—
National Service Director	2003	201,250	150,000	*	—	—
Charles I. Homan	2005	250,000	140,000	*	—	—
Executive Vice President and	2004	237,500	130,000	*	56,250	—
National Service Director	2003	227,500	80,000	*	—	—
Richard A. Wickett	2005	119,000	—	*	—	—
Former Chairman of the Board	2004	257,500	190,000	*	—	—
	2003	250,000	200,000	*	—	—

⁽¹⁾ Annual bonus represent amount earned during the fiscal year. Actual cash payments may be made in a subsequent year.

⁽²⁾ Consists of matching payments under the 401(k), ESOP, and profit sharing plans of the PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust, flex benefits and term life insurance premiums paid by us. Total value of perquisites and other personal benefits do not exceed $50,000 or 10% of the named executive officer’s reported annual salary.

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Director Compensation

All members of our Board of Directors, who are also executive officers of the Company, receive no additional remuneration for any services performed in the capacity of Director. Non-employee members of our Board of Directors are paid annual fees of $25,000 payable on a quarterly basis. In addition to the annual fees, each non-employee Director will receive $2,000 per day for each Board meeting and $1,000 per day for each committee meeting attended in person and $1,000 per day for each Board meeting and $750 per day for each committee meeting attended via teleconference. The Chairman of each committee receives an additional $3,000 per year, except the Audit Committee chair, who receives $5,000 per year. Non-employee Directors also receive $2,000 per year for attending the Company’s annual meeting of stockholders.

Compensation Committee Report on Executive Compensation

The Executive Compensation Committee (“the Committee”) of the Board of Directors consists of three non-employee directors; consisting of Messrs. Searcy (Chairperson), Pruitt and Stasiowski. The Executive Compensation Committee is responsible for establishing and administering the compensation policies and programs of all Company executive officers, including its Chief Executive Officer. The Committee ensures that levels of compensation for the Company’s executive officers are justifiable, have a reasonable relationship to performance, and integrate best-industry practices. The Committee reports on a regular basis to the Board of Directors on all compensation matters.

Executive Compensation Philosophy

The Company’s executive compensation program is designed to attract and retain talented executives to meet the Company’s short-term and long-term business objectives. In doing so, it aligns the Company’s executives’ interests with the interests of its shareholders by providing an adequate compensation package. This compensation package includes a base salary at a level comparable with industry best practices, relative to companies of the same size. In addition, the Company awards incentive bonuses which are linked to its performance, as well as to the individual executive officers’ performance. This package may also include long-term, stock based compensation to certain senior executives which is intended to align the performance of the Company’s senior executives with the Company’s long-term business strategies.

Base Salary

The base salary of executives is established by evaluating the range of responsibilities of the position and the impact it can have in meeting the strategic objectives of the Company. The established base salary is then benchmarked to comparable positions with that of industry best practices. Base salaries are adjusted to reflect the varying levels of position responsibilities and individual executive performance.

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Incentive Bonus

At the beginning of each fiscal year, the Company assigns specific objectives which are aligned with the Company’s desired results for operations as well as the individual executive performance. In the case of senior executives, additional objectives are set to meet the strategic long-term objectives of the Company. Generally, incentive bonuses are paid in December after evaluating the results of the prior fiscal year.

Long-term, Stock Based Compensation

In order to attract, retain and motivate executive talent necessary to support the Company’s long-term business strategy, the Company may award certain senior executives with long-term, stock based compensation, which usually vests over a period not to exceed five years.

Post-employment Compensation

Additionally, the Company may award certain senior executives with post-employment retirement benefits, which may include “Supplemental Income Agreements” and “Consulting Agreements”.

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ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of September 30, 2005 and (i) all persons who are known to us to be beneficial owners of five percent or more of the common shares, (ii) each of our Directors, (iii) the Named Officers and (iv) all current Directors and executive officers as a group.

Shareholder	Shares of Common Stock Beneficially Owned		Percent of Class Beneficially Owned
The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust	3,613,252		51.5	%
Richard M. Grubel	33,706	(1)	*
Charles I. Homan	23,378	(2)	*
Todd J. Kenner	109,521	(3)	1.6	%
Robert J. Paulsen	136,244	(4)	1.9	%
William D. Pruitt (11)	—		—
Becky S. Schaffer	13,999	(5)	*
Phillip E. Searcy (11)	—		—
John S. Shearer	187,059	(6)	2.7	%
Frank A. Stasiowski (11)	—		—
John B. Zumwalt, III	185,194	(7)	2.6	%
Donald J. Vrana	—		—
Richard A. Wickett (12)	248,636	(8)	3.5	%
Kathryn J. Wilson (13)	4,042	(9)	*
Named Officers and Directors collectively	1,019,034	(10)	14.5	%

*    - Represents less than 1% of class of beneficially owned shares

⁽¹⁾   - Includes 12,681 shares owned via The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust

⁽²⁾   - Includes 1,378 shares owned via The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust

⁽³⁾   - Includes 13,646 shares owned via The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust

⁽⁴⁾   - Includes 26,544 shares owned via The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust

⁽⁵⁾   - Includes 3,375 shares owned via The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust

⁽⁶⁾   - Includes 21,769 shares owned via The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust

⁽⁷⁾   - Includes 94,961 shares owned via The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust

⁽⁸⁾   - Includes 156,029 shares owned via The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust

⁽⁹⁾   - Includes 448 shares owned via The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust

⁽¹⁰⁾  - Includes 347,251 shares owned via The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust

⁽¹¹⁾  - Messrs. Pruitt,Searcy and Stasiowski are independent, non-employee members of the PBSJ Corporation Board of Directors.

⁽¹²⁾  - Mr. Wickett resigned his position as Chairman of the Board of Directors in January 2005 and resigned from the Board of Directors in June 2005.

⁽¹³⁾  - Mrs. Wilson resigned her position as Assistant Secretary and Treasurer in November 2005.

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ITEM 13. Certain Relationships and Related Transactions

We lease office space in a building which houses our Marietta, Georgia operations from BCE Properties, which is owned and controlled by James Belk. Mr. Belk is a former owner of Welker and a Vice-President and Project Director of ours. The lease was assumed in connection with our acquisition of Welker in March 2003. The rental cost of the space is $17,600 per month. On May 31, 2006, the lease expired and was not renewed. In June 2006, we moved our Marietta, Georgia operations to a new location.

We lease office space in a building which houses our Missoula, Montana operations from Cedar Enterprises, which is owned and controlled by Charlie K. Vandam. Mr. Vandam is a former owner of LWC and a Senior Program Manager of ours. The lease was assumed in connection with our acquisition of LWC in February 2005. The rental cost of the space is $9,500 per month.

We lease office space in a building which houses our Helena, Montana operations from Prickly Pear Enterprises, which is owned and controlled by Paul Callahan. Mr. Callahan is a former owner of LWC and a Vice-President and Senior Division Manager of ours. The lease was assumed in connection with our acquisition of LWC in February 2005. The rental cost of the space is $1,800 per month.

ITEM 14. Principal Accountant Fees and Services

The following table presents fees paid for services rendered by our current principal accountants, Deloitte & Touche LLP, and our former principal accountant PricewaterhouseCoopers LLP, with respect to the Company’s last two fiscal years:

	Year ended September 30, 2005
Type of Services	Deloitte & Touche LLP		PricewaterhouseCoopers LLP
Audit fees		213,650		24,500
Audit-related fees		4,500		157,564
Tax fees		—		—
All other fees		284,161		—
Total	$	502,311	$	182,064

	Year ended September 30, 2004
Type of Services	Deloitte & Touche LLP		PricewaterhouseCoopers LLP
Audit fees		—		231,959
Audit-related fees		—		25,000
Tax fees		—		63,500
All other fees		—		34,500
Total	$	—	$	354,959

Audit services include the audit of our annual financial statements, reviews of our quarterly financial information. Audit-related services include the audit of employee benefit plans, assistance in understanding and applying financial and accounting standards, and other services related to readiness preparation with Section 404 of the Sarbanes-Oxley Act. Tax services are tax planning, tax compliance services and tax return preparation. All other fees include audit procedures for Statements of Direct Labor, Fringe Benefits and General Overhead and Breakeven Multiplier Calculations.

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Audit Committee Policies and Procedures for Pre-approval of Audit and Non-Audit Services

Consistent with SEC policies regarding auditor independence, the CAC is responsible for pre-approving all audit and non-audit services provided to us or our subsidiaries by our independent registered public accounting firm. During fiscal 2005, the CAC pre-approved all services provided by Deloitte & Touche LLP and PricewaterhouseCoopers LLP.

Auditor Independence

The Audit Committee has considered whether the provision of the non-audit services described above is compatible with maintaining the independence of Deloitte & Touche LLP and PricewaterhouseCoopers LLP and determined that the provision of such services was compatible with maintaining such independence.

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PART IV

ITEM 15. Exhibits and Financial Statement Schedules

The following is a list of financial information filed as a part of this Annual Report:

1. Consolidated Financial Statements - The following financial statements of The PBSJ Corporation and its subsidiaries are contained in Item 8 of this Form 10-K:

a) Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.

b) Report of PricewaterhouseCoopers LLP, Independent Registered Certified Public Accounting Firm.

c) Consolidated Balance Sheets at September 30, 2005 and 2004.

d) Consolidated Statements of Operations for each of the three years in the period ended September 30, 2005.

e) Consolidated Statements of Stockholders’ Equity and comprehensive income at September 30, 2005, 2004 and 2003.

f) Consolidated Statements of Cash Flows for each of the three years in the period ended September 30, 2005.

g) Notes to the Consolidated Financial Statements.

2. Financial Statement Schedules - The financial statement schedule information is included as part of the Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K.

3. A list of exhibits to this Annual Report is set forth in the Exhibit Index appearing elsewhere in this Annual Report and is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		The PBSJ Corporation
Date:	January 26, 2007		/s/ Donald J. Vrana
			Donald J. Vrana
			Senior Vice President and
			Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of The PBSJ Corporation.

Date:	January 26, 2007	/s/ John B. Zumwalt III
		John B. Zumwalt III
		Chairman of the Board and
		Chief Executive Officer
Date:	January 26, 2007	/s/ Donald J. Vrana
		Donald J. Vrana
		Senior Vice President and
		Chief Financial Officer
Date:	January 26, 2007	/s/ Robert J. Paulsen
		Robert J. Paulsen
		Director, Executive Vice
		President, Secretary and Vice
		Chairman of the Board
Date:	January 26, 2007	/s/ Todd J. Kenner
		Todd J. Kenner
		Director and President
Date:	January 26, 2007	/s/ John S. Shearer
		John S. Shearer
		Director and Senior Vice
		President
Date:	January 26, 2007	/s/ William D. Pruitt
		William D. Pruitt
		Director
Date:	January 26, 2007	/s/ Phillip E. Searcy
		Phillip E. Searcy
		Director
Date:	January 26, 2007	/s/ Frank A. Stasiowski
		Frank A. Stasiowski
		Director

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Exhibit Index

Exhibit Number	Description
3.1	Articles of Incorporation, as amended. (1)
3.2	Amended and Restated Bylaws. (1)(4)(6)
4.1	Form of Specimen Stock Certificate. (1)
10.1	The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust, amended and restated, dated February 22, 2002. (2)(3)
10.1(a)	Promissory Note previously filed as Exhibit 10.1 in Form 10-Q dated May 15, 2001; Promissory note, dated March 19, 2001, between Suntrust Bank, a Georgia corporation, and Post, Buckley, Schuh & Jernigan, Inc., the Registrant’s subsidiary.
10.2	Supplemental Income Plan effective as of January 12, 1988, as amended September 27, 1995. (1)
10.2(a)	Mortgage Security Agreement previously filed as Exhibit 10.2 in Form 10-Q dated May 15, 2001; Agreement, dated March 19, 2001, between Suntrust Bank, a Georgia corporation, and Post Buckley, Schuh & Jernigan, Inc., the Registrant’s subsidiary, as amended on December 10, 2003. (4)
10.3	Consulting/Supplemental Retirement/Death Benefits Agreement, dated November 6, 1987, between the Registrant and H. Michael Dye, as amended on October 16, 1989, August 21, 1991, March 1, 1993, February 6, 1995, May 19, 1998, November 22, 1999 and January 2, 2002. (1)
10.3(a)	ISDA Master Agreement previously filed as Exhibit 10.3 in Form 10-Q dated May 15, 2001; Agreement, dated March 8, 2001, between Suntrust Bank and Post Buckley, Schuh & Jernigan, Inc., the Registrant’s subsidiary. (4)
10.4	Supplemental Retirement/Death Benefits Agreement, dated December 17, 1987, between the Registrant and Robert J. Paulsen, as amended January 1, 2002 and January 1, 2004. (1)
10.4(a)	Schedule to the ISDA Master Agreement previously filed as Exhibit 10.4 in Form 10-Q dated May 15, 2001; Agreement, dated March 8, 2001, between Suntrust Bank and Post Buckley, Schuh & Jernigan, Inc., the Registrant’s subsidiary.
10.5	Supplemental Income Agreement, dated as of July 29, 1996, between the Registrant and Robert J. Paulsen (1)
10.5(a)	Confirmation of Interest Rate Transaction previously filed as Exhibit 10.5 in Form 10-Q dated May 15, 2001; Confirmation, dated March 9, 2001, between Suntrust Bank and Post Buckley, Schuh & Jernigan, Inc., the Registrant’s subsidiary. (4)
10.6	Employment/Retirement Benefits Agreement, dated February 15, 1999, between the Registrant and William W. Randolph. (1)
10.7	Supplemental Retirement/Death Benefits Agreement, dated December 17, 1987, between the Registrant and Richard A. Wickett, as amended on April 27, 1989, May 19, 1998, November 22, 1999 and January 2, 2002. (1)
10.8	Supplemental Retirement/Death Benefits Agreement dated December 17, 1987, between the Registrant and John B. Zumwalt, III, as amended on May 19, 1998, November 22, 1999, January 2, 2002 and January 1, 2004. (1)
10.9	Agreement, dated as of April 1, 1993, between the Registrant and John B. Zumwalt, III (1)
10.10	Split-Dollar Life Insurance Agreement dated February 1, 1999, by and between The Randolph Insurance Trust and the Registrant. (1)
10.11	Credit Agreement, dated as of June 28, 1996, by and among Nationsbank, N.A., Suntrust Bank, Miami, N.A., Post, Buckley, Schuh and Jernigan, Inc., The PBSJ Corporation, and the subsidiaries named therein, as amended on July 3, 1997, June 30, 1999, June 30, 2002 and May 6, 2003. (1)(4)
10.12	Lease Agreement, dated as of March 25, 1998, by and between Post, Buckley, Schuh & Jernigan, Inc. and Highwoods/Florida Holdings L.P. as successor in interest to Cypress-Tampa II L.P., as amended on May 26, 1998, December 26, 1998, November 29, 1999, March 1, 2000 and July 1, 2003. (1)(4)
10.13	Employment Agreement dated December 17, 1987, between the Registrant and Donald J. Vrana. (5)
10.14	The PBSJ Corporation Stock Ownership Plan. (2)

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10.15	Lease agreement, dated as of May 30, 2000, by and between Post, Buckley, Schuh & Jernigan, Inc. and RREEF American Reit Corp. G as amended on August 12, 2002 and February 19, 2003. (4)
10.16	Amendment No. 2 to Amended and Restated Credit Agreement, dated June 27, 2005, by and among Bank of America, N.A., The PBSJ Corporation, and the subsidiaries named therein, as amended May 5, 2003 and June 30, 2002. (5)
10.17	Key Employee Supplemental Option Plan effective as of July 23, 2002, as amended August 1, 2003. (6)
10.18	Agreement, dated as of April 1, 1993, between the Registrant and John S. Shearer. (6)
10.19	Amendment to Supplemental Income Retirement Agreement, dated January 1, 2000, between the Registrant and Todd J. Kenner. (6)
10.20	Key Employee Supplemental Income Program Agreement, dated January 1, 2004, between the Registrant and Todd J. Kenner. (6)
10.21	Supplemental Retirement/Death Benefits Agreement, dated September 24, 1986, between the Registrant and Phillip E. Searcy, as amended on April 17, 1989, October 18, 1993, February 6, 1995 and May 8, 2000. (6)
10.22	Agreement, dated April 1, 2005, between the Registrant and Rosario Licata. (6)
10.23	Agreement, dated April 22, 2005, between the Registrant and William Scott DeLoach. (6)
10.24	Agreement, dated November 23, 2005, between the Registrant and Maria Marietta Garcia. (6)
10.25	Non-Negotiable Promissory Note, dated February 23, 2006, between the Registrant and Kathryn J. Wilson. (6)
10.26	Non-Negotiable Promissory Note, dated February 23, 2006, between the Registrant and Richard A. Wickett. (6)
10.27	Tolling Agreement, dated March 16, 2006, between the Registrant and Kathryn J. Wilson. (6)
10.28	Tolling Agreement, dated March 16, 2006, between the Registrant and Richard A. Wickett. (6)
21	Subsidiaries. (1)
31.1	Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (6)
31.2	Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (6)
32.1	Chief Executive Officer Certification and Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (6)
99.3	Code of Ethics that applies to the Principal Executive Officer, Principal Financial Officer, Principal Operations Officer and Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 406 of the Sarbanes-Oxley Act of 2002. (4)

⁽¹⁾ Previously filed with the Registration Statement on Form 10 filed with the Commission on June 27, 2000.

⁽²⁾ Previously filed with the Amended Registration Statement on Form 10A filed with the Commission on September 26, 2000.

⁽³⁾ Previously filed with the Form 10-Q in a prior period.

⁽⁴⁾ Previously filed with the Form 10-K in a prior period.

⁽⁵⁾ Previously filed with the Form 8-K in a prior period.

⁽⁶⁾ Filed herewith.

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EX-3.2

Exhibit 3.2

A 1/28/05

AMENDED AND RESTATED BYLAWS

OF

THE PBSJ CORPORATION

ARTICLE I

DEFINITIONS

As used in these Bylaws, unless the context otherwise required, the term:

“Affiliate” means a person or group of people that is controlled by or in common control with, the Corporation.

“Board” means the Board of Directors of the Corporation.

“Bylaws” means the restated and amended bylaws of the Corporation, as further amended from time to time.

“Articles of Incorporation” means the initial articles of incorporation of the Corporation, as amended, supplemented or restated from time to time.

“Corporation” means The PBSJ Corporation, a Florida corporation.

“General Corporation Act” means the General Corporation Act of the State of Florida, as amended from time to time.

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“Principal Office” means the Corporation’s principal headquarters or any other place within or without the State of Florida as the Board may designate from time to time.

“Shareholders” means the shareholders of the Corporation.

ARTICLE II

MEETING OF SHAREHOLDERS

Section 1. Annual Meeting. The annual meeting of the Shareholders of this Corporation shall be held annually, within 120 days after the end of the Corporation’s fiscal year, on such date and at such time and place as may be designated by the Board. Business transacted at the annual meeting shall include the election of directors of the Corporation.

Section 2. Special Meetings. Special meetings of the Shareholders shall be held when directed by the President or the Board, or when requested in writing by the holders of not less than 10% of all the shares entitled to vote at such meetings. A meeting requested by Shareholders shall be called for a date not less than ten nor more than sixty days after the request is made unless the Shareholders requesting the meeting designate a later date; provided, that a meeting called by unanimous request of all Shareholders may be held at any time to which they agree. The call for the meeting shall be issued by the Secretary, unless the President, Board of Directors, or Shareholders requesting the calling of the meeting shall designate another person to do so.

Section 3. Place. Meetings of Shareholders shall be held at the Principal Office of the Corporation or at any other place designated by the Board.

Section 4. Fixing Record Date. For the purpose of determining Shareholders entitled to notice of, or to vote at, any meeting of Shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or for the purpose of determining Shareholders entitled to receive payment of any dividend or the allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix, in advance, a date as the record date for any such determination of Shareholders. Such date shall not be more than 60 nor less than 10 days before the date of such meeting.

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Section 5. Notice. Written notice stating the place, day and hour of the meeting and, in the case of a special meeting of Shareholders, the purpose or purposes for which the meeting is called, shall be delivered not less than 10 nor more than 60 days before the meeting, either personally or by first class mail, electronic mail by or at the direction of the President, the Secretary or the officer or persons calling the meeting to each Shareholder of record entitled to vote at the meeting. If the notice is mailed at least 30 days before the date of the meeting, it may be done by a class of United States mail other than first class or electronically. If mailed, notice shall be deemed delivered when deposited in the United States mail addressed to the Shareholder at his address as it appears on the stock transfer books of the Corporation, with postage thereon prepaid and return receipt requested. If notice is given by electronic mail, it shall be deemed delivered when opened.

Section 6. Notice of Adjourned Meeting. When a meeting is adjourned to another time or place, it shall not be necessary to give any notice of the adjourned meeting, provided that the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and any business which might have been transacted on the original date of the meeting may be transacted at the adjourned meeting. If, however, after the adjournment the Board fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given as provided in this Article to each Shareholder of record on the new record date entitled to vote at such meeting.

Section 7. Shareholder Quorum and Voting. A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of Shareholders.

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If a quorum is present, the affirmative vote of a majority of the shares represented at the meeting and entitled to vote on the subject matter shall be the act of the Shareholders unless otherwise provided by law.

Section 8. Voting of Shares. Each outstanding share of common stock shall be entitled to one vote on each matter submitted to a vote at a meeting of Shareholders.

Section 9. Proxies. A Shareholder may vote either in person or by proxy executed in writing by the Shareholder or his duly authorized attorney-in-fact. No proxy shall be valid after the duration of 11 months from the date thereof unless otherwise provided in the proxy.

Section 10. Action by Shareholders Without a Meeting. Any action required by law, these Bylaws, or the Articles of Incorporation of this Corporation to be taken at any annual or special meeting of Shareholders, or any action which may be taken at any annual or special meeting of Shareholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, as is provided by law.

Within 10 days after obtaining such authorization by written consent, notice shall be given to those Shareholders who have not consented in writing. The notice shall fairly summarize the material features of the authorized action, as is provided by law.

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ARTICLE III

DIRECTORS

Section 1. Function. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of the Board.

Section 2. Qualification. Directors need not be residents of Florida. A majority of the Directors shall be Shareholders of this Corporation and full-time employees of the Corporation or its Affiliates.

Section 3. Presumption of Assent. A director of the Corporation who is present at a meeting of the Board at which action on any corporate matter is taken is presumed to have assented to the action taken unless he votes against such action or abstains from voting in respect thereto because of an asserted conflict of interest.

Section 4. Number. This Corporation shall have at least five Directors. The number of directors shall be determined from time to time by the Board.

Section 5. Election and Terms. At each annual meeting, the Shareholders shall elect directors to hold office until the next succeeding annual meeting. Each director shall hold office for a term to which he is elected and until his successor shall have been elected and qualified or until his earlier resignation, removal from office or death.

Section 6. Chairman and Vice Chairman. The Board shall choose, from among its members, a Chairman, who shall preside at all Shareholder meetings and all Board meetings. The Chairman shall serve as the agent for the directors in all matters falling within the scope of the resolutions adopted by the directors, and he shall have such other duties as are provided by the Bylaws or by resolution of the Board unless otherwise specified by resolution of the Board. He shall serve as Chairman until a successor is chosen or until his earlier death, resignation or removal.

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The Board shall choose, from among its members, a Vice Chairman who shall have the same powers and duties as the Chairman in the Chairman’s absence.

Section 7. Compensation. The Board shall have the authority to fix the compensation of directors. Nothing contained in this Section shall preclude any director from serving the Corporation or any Affiliate thereof in any other capacity and receiving proper compensation therefor.

Section 8. Vacancies. Any vacancies occurring in the Board, including any vacancy created by reason of an increase in the number of directors, may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board. A director elected to fill a vacancy shall hold office only until the next election of directors by the Shareholders. If there are no remaining directors, the vacancy shall be filled by the Shareholders.

Section 9. Resignation; Removal of Directors. Any director may resign at any time by written notice to the Corporation. Such resignation shall take effect at the time specified therein, and, unless otherwise specified, the acceptance of such resignation shall not be necessary to make it effective.

At a meeting of Shareholders called expressly for that purpose, any director or the entire Board may be removed, with or without cause, by a vote of the holders of a majority of the shares then entitled to vote at an election of directors.

Section 10. Quorum and Voting. A majority of the number of directors fixed by these Bylaws shall constitute a quorum for the transaction of business. The act of a majority of Directors present at a meeting where a quorum is present shall be the act of the Board.

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Section 11. Executive and Other Committees. The Board may, by resolution adopted by a majority of the full Board, designate from among its members an executive committee and one or more other committees each of which, to the extent provided in such resolution, shall have and may exercise all the authority of the Board, except as provided by law.

Section 12. Annual Meetings. The Board shall hold an annual meeting for purposes of the election of officers and the transaction of other business. The annual meeting of the Board shall be held at such time and place as is specified in a notice given as provided in Section 14 of Article III of the Bylaws for special meetings of the Board or in a waiver of notice thereof. When practicable, such meetings shall be held on the day when and at the place where the annual meeting of Shareholders for the election of directors is held.

Section 13. Place of Meeting. Regular and special meetings of the Board shall be held at the Principal Office of the Corporation or at such other place as may be designated by the person or persons giving notice or otherwise calling the meeting.

Section 14. Time of Meeting. Regular meetings of the Board shall be held without notice at the time and on the date designated by resolution of the Board. Written notice of the time and place of special meetings of the Board shall be given to each director by personal delivery, telegram or cablegram at least two (2) days before the meeting.

Notice of a meeting of the Board need not be given to any director who signs a waiver of notice either before or after the meeting. Attendance of a director at a meeting shall constitute a waiver of notice of that meeting and waiver of any and all objections to the place of the meeting, the time of the meeting, or the manner in which it has been called or convened, except when a director states, at the beginning of the meeting, objection to the transaction of business because the meeting is not lawfully called or convened.

Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice or waiver of notice of the meeting.

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A majority of the directors present, whether or not a quorum exists, may adjourn any meeting of the Board to another time and place. Notice of any adjourned meeting shall be given to the directors who were not present at the time of the adjournment and, unless the time and place of the adjourned meeting are announced at the time of the adjournment, to the other directors.

Meetings of the Board may be called by the Chairman, the President of the Corporation or by any two directors.

Members of the Board (or any committee thereof) may participate in a meeting of the Board (or committee) by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time. Participation by such means shall constitute presence in person at a meeting.

Section 15. Action Without a Meeting. Any action required to be taken at a meeting of the Board, or any action which may be taken at a meeting of the Board or a committee thereof, may be taken without a meeting if a consent in writing, setting forth the action so to be taken and signed by all the directors or all the members of the committee, as the case may be, is filed in the minutes of the proceedings of the Board or of the committee. This consent shall have the same effect as a unanimous vote.

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ARTICLE IV

OFFICERS

Section 1. Officers. The officers of this Corporation shall consist of a Chairman, President, such number of Vice Presidents as the Board may designate, a Secretary, a Treasurer and such other officers as the Board may determine. Such other officers and assistant officers and agents as may be deemed necessary may be elected or appointed by the Board from time to time. Any two or more offices may be held by the same person, except that the President may not also be the Secretary or an Assistant Secretary.

Section 2. Compensation. Salaries or other compensation of the officers may be fixed from time to time by the Board. No officer shall be prevented from receiving a salary or other compensation by reason of the fact that he is also a director.

Section 3. Chairman. The Chairman of the Board shall have such duties as may be specifically assigned to him by the Board from time to time. The Chairman shall preside at all meetings of the Board and of the Shareholders of the Corporation.

Section 4. President. The President shall have the general and active management of the business of the Corporation, and shall perform such duties as the Board may from time to time prescribe.

Section 5. Vice-President. The Vice-President or the Executive Vice President shall be the chief operating officer and shall have the same powers and duties as the President in the event the President is absent or otherwise incapacitated.

Section 6. Secretary. The Secretary shall have the custody of and shall maintain all of the corporate records except the financial records; shall record the minutes of all meetings of the Shareholders and Board; shall send out all notice of meetings; and perform such other duties as may be prescribed by the Board or President.

9

Section 7. Treasurer. The Treasurer shall have custody of all corporate funds and financial records; shall keep full and accurate accounts of receipts and disbursements and render accounts thereof at the annual meetings of the Shareholders and whenever else required by the Board or President; and shall perform such other duties as may be prescribed by the Board or President.

Section 8. Removal of Officers. An officer or agent elected or appointed by the Board may be removed by the Board whenever in its judgment the best interest of the Corporation will be served thereby.

ARTICLE V

STOCK CERTIFICATES

Section 1. Issuance. Every holder of shares in this Corporation shall be entitled to have a certificate representing all shares to which he is entitled. No certificate shall be issued for any share until the share is fully paid.

Section 2. Form. Certificates representing shares in this Corporation shall be signed by the President or any Vice President, if any, and the Secretary or any Assistant Secretary, if any, and may be sealed with the seal of this Corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles if the certificate is manually signed on behalf of a transfer agent or registrar other than the Corporation itself or an employee of the Corporation.

Section 3. Transfer of Stock. The Corporation shall register a stock certificate presented to it for transfer if the certificate is properly endorsed by the holder of record or by his duly authorized attorney.

Section 4. Lost, Stolen, or Destroyed Certificates. If a Shareholder shall claim to have lost or destroyed a certificate of shares issued by the Corporation, or that such certificate has been stolen, a new certificate shall be issued upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed, and, at the discretion of the Board, upon the deposit of a bond or other indemnity in such amount and with such sureties, if any, as the Board may reasonably require.

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Section 5. Failure to Surrender Certificates. When a Shareholder is required to surrender his/her stock certificate(s) for redemption as provided in these by-laws, it shall be done within 30 days of the triggering event unless otherwise approved by the Board. The redemption price for such shares shall be the established per share price at the time of the triggering event. If after notice to the Shareholder by certified mail or is equivalent, the Shareholder fails to surrender said certificate(s), the Corporation may redeem said shares or arrange for the shares to be purchased by other parties as provided in these by-laws.

ARTICLE VI

BOOKS AND RECORDS

Section 1. Books and Records. This Corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its Shareholders, Board and committees of directors.

This Corporation shall keep at its registered office or Principal Office a record of its Shareholders, giving the names and addresses of all Shareholders and the number of the shares held by each.

Any books, records and minutes may be in written form or in any other form capable of being converted into written form within a reasonable time.

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Section 2. Shareholders’ Inspection Rights. Any person who shall have been a holder of record of one-quarter of one percent of the outstanding shares of the Corporation or of voting trust certificates therefor for at least six months immediately preceding his demand or shall be the holder of record of, or the holder of record of voting trust certificates for, at least five percent of the outstanding shares of the Corporation, upon written demand stating the purpose thereof, shall have the right to examine, in person or by agent or attorney, at any reasonable time or times, for any proper purpose its relevant books and records of accounts, minutes and records of Shareholders and to make extracts therefrom.

Section 3. Financial Information. Unless modified by resolution of the Shareholders, not later than four months after the close of each fiscal year, this Corporation shall prepare a balance sheet showing in reasonable detail the financial condition of the Corporation as of the close of its fiscal year, and a profit and loss statement showing the results of the operations of the Corporation during its fiscal year.

Upon the written request of any Shareholder or holder of voting trust certificates for shares of the Corporation, the Corporation shall mail to such Shareholder or holder of voting trust certificates a copy of the most recent such balance sheet and profit and loss statement.

The balance sheets and profit and loss statements shall be filed in the registered office of the Corporation in Florida, shall be kept for at least five years, and shall be subject to inspection during business hours by any Shareholder or holder of voting trust certificates, in person or by agent.

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ARTICLE VII

DIVIDENDS

The Board may from time to time declare, and the Corporation may pay, dividends on its shares in cash, property or its own shares, except when the Corporation is insolvent or when the payment thereof would render the Corporation insolvent, subject to the provisions of the General Corporation Act.

ARTICLE VIII

ISSUANCE, SALE AND REDEMPTION OF SHARES

Section 1. Issuance and Sale by Corporation; Authority/Consideration.

a. Issuance and Sale by Corporation; Authority. The Board must approve the issuance and sale of all shares of the Corporation. Except as provided below, shares may be owned only by full-time or Part-Time Regular (PTR) employees of the Corporation and any Affiliate thereof, The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust, Part I of which is The PBSJ Employee Profit Sharing Plan and Trust and Part II of which is The PBSJ Employee Profit Sharing and Stock Ownership Plan (ESOP), personal trusts of Shareholders if approved by the Board. The Board shall have the authority to permit a non-employee to own shares in the Corporation who is (i) a director of the Corporation, or (ii) a spouse of an employee of the Corporation or any Affiliate, or (iii) a child of an employee of the Corporation or any Affiliate, provided that, at all times during the taxable year, ninety-five percent (95%) of the Corporation’s shares by value shall be held, directly or indirectly, by: (i) full time or Part-Time Regular employees performing services for the Corporation or an Affiliate, and (ii) retired employees who have performed services for the Corporation or an Affiliate or the estate of an employee who had performed such services.

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A Part-Time Regular employee shall be one who works no less than 24 hours per work week. The total value of a Part-Time Regular employee’s stock holdings may not exceed in value three times the Part-Time Regular employee’s annual stated salary. This amount shall be recalculated each December 31 to ensure current compliance. Once the highest permissible value has been reached the Part-Time Regular employee may not purchase additional shares. If, upon the December 31 recalculation, the total value of his shares is greater than three times his stated salary, the Part-Time Regular employee must sell sufficient shares to bring the value of his total holdings within the required limits. Such sale shall be during the annual stock offering window and redeemed according to the provisions of this Article VIII.

In performing the December 31 calculation the Part-Time Regular employee shall not include the value of shares held in The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust (Trust), The PBSJ Employee Profit Sharing and Stock Ownership Plan (ESOP), or any Restricted Shares awarded to such Part-Time Regular employee.

b. Consideration. The consideration for all such shares shall be determined as provided in Paragraph a. of Section 3 of this Article VIII. Unless otherwise approved by the Board, shares shall not be issued by the Corporation until the full amount of consideration therefore has been paid.

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Section 2. Redemption by Corporation.

a. Rule. Except as provided in paragraph b., below, of this Section 2, when a Shareholder’s full-time employment with the Corporation or an Affiliate thereof is reduced to part-time or terminated completely for any reason whatsoever, including death, or a Part-Time Regular employee’s employment is terminated, the Shareholder, his guardian, heirs, trustee, beneficiaries, or personal representative, as the case may be, shall be required to offer all of his shares for a price determined in accordance with paragraph a. of Section 3 hereof, upon the terms and conditions of Section 4 hereof. Additionally, a Shareholder may sell some or all of his shares to the Corporation while still in the full-time employ of the Corporation or an Affiliate during the Corporation’s annual stock offering period, and the Corporation may purchase such shares as provided in Section 3, paragraph a. and Section 4 of this Article VIII. If the Corporation exercises its right of refusal, the ESOP may assume the right of the Corporation to purchase such shares at a price and on the same terms and conditions applicable to the Corporation except as otherwise provided by law in Section 5 hereof; provided however, that if the ESOP declines to assume such right the Shareholder may offer such shares to the other shareholders of the Corporation or an Affiliate as provided in Section 6 of this Article VIII. If the Corporation or the ESOP should be prohibited from purchasing such shares under applicable law the other shareholders of the Corporation shall have the right (but not the obligation) to purchase such shares as provided in Section 6 of this Article VIII.

b. Exception; Separate Agreement(s). Notwithstanding the restriction in paragraph a., above, a former employee of the Corporation or any Affiliate may continue to own shares of the Corporation when such shares are subject to a separate written share redemption or purchase agreement made by the corporation and such former employee, and approved by a vote of over fifty percent (50%) of the shares entitled to vote, before the termination of his employment.

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Section 3. Price Upon Issuance/Sale or Redemption.

a. Rule. Except as provided in paragraphs a. and c. of this Section 3, the price per share for all shares issued, sold, purchased or redeemed by the Corporation, the ESOP, or individual Shareholders, as the case may be, shall be an amount equal to the fair market value of such shares, as determined by an independent appraisal. For this purpose, the valuation of the shares shall be performed at least annually, and the price per share shall be based on the value established by the most recent completed appraisal, subject to applicable law.

b. Exception; Separate Agreement. If the provisions of paragraph a., above, are in conflict with the provisions of any separate written share redemption or purchase agreement (as provided in paragraph b. of Section 2), then the provisions of such separate agreement shall govern.

c. Stock Ownership Plan. The price per share for shares issued upon the exercise of Stock Ownership Rights granted pursuant to The PBSJ Corporation Stock Ownership Plan (the “Plan”) shall be the Exercise Price for such shares fixed in the manner provided in the Plan. The redemption price for such shares shall be determined in the manner provided in paragraph a. of this Section 3. Recipients of Restricted Shares granted pursuant to the Plan shall not be required to pay for such shares, and such shares shall have no redemption value prior to the expiration of three years from the date they were awarded, except upon the death of the holder thereof. Upon the expiration of such three-year period or the death of the shareholder, whichever occurs first, such shares shall be deemed fully paid and shall be redeemable at a price determined in the manner provided in paragraph a. of this Section 3.

Section 4. Purchase by the Corporation, the ESOP, or Individual Shareholders.

a. Payment Options. In any share redemption or purchase, the Corporation or the ESOP, as the case may be, shall have the option to pay the total sum due for the shares redeemed or purchased all in cash, or any portion in cash and the remainder in installments, or all in installments; provided however, that all of such payments shall be out of funds legally available for such purposes under applicable law. In any share purchase by an individual Shareholder or Shareholders, the total sum due shall be paid at the time of purchase all in cash.

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b. Installment Payments. Any sum the Corporation or the ESOP elects to pay in installments shall be paid to the Shareholder, or his heirs, beneficiaries, personal representative or guardian, as the case may be, over such period as the Board or the ESOP Trustees may determine, provided that such period shall not exceed five (5) years. Subject to applicable law, interest shall be paid on any unpaid balance at a rate equal to the prime rate charged by the Corporation’s primary bank lender(s). The initial rate shall be the rate in effect at the time of sale, and this rate shall be updated on December 31 of each year to the rate in effect at that time. All or any part of the unpaid balance may be prepaid in whole or in part at any time or times without penalty.

c. Apportionment of payments. In the event the corporation is indebted to more than one former shareholder, or his guardian, or the heirs, beneficiaries, or personal representative of a deceased Shareholder, incident to the redemption of stock under this Article VIII, and there are insufficient funds to pay all such payments as they fall due, then, the Board shall apportion such funds as are, from time to time, available between/among such payments so due.

d. Discretionary Powers of the Board. The Board shall neither be prohibited nor in any way limited or restricted from utilizing funds available for installment payment purposes for any corporate purposes, whatsoever, it being only required that, in all matters respecting the accumulation and/or disbursal of such funds, it consider what, in its judgment and discretion, will be in the best short and long term interests of the Corporation, the Shareholders, and any former Shareholders, or their guardians, or the heirs, beneficiaries, or personal representatives of deceased Shareholders to whom the Corporation may be indebted incident to the redemption of any shares under paragraph a. of Section 2. Additionally, except as otherwise specifically provided in this Article VIII,

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when any provision of the Bylaws shall either explicitly or inferentially require interpretation, or when any such provision shall allow, permit or require discretionary action, the Board shall have full power and authority to make such interpretation and/or to take such discretionary action as it deems proper. Provided, however, if a Shareholder, former Shareholder, or his guardian, or the heirs, beneficiaries or personal representative of a deceased Shareholder contend that the Board has not made every reasonable effort to make timely installment payments, as provided for under this paragraph d., then such person or persons may bring an action (based upon but restricted to such contention) for specific performance in a court of competent jurisdiction.

e. Exception; Separate Agreement. If the provisions of paragraph a. through d., above, are in conflict with the provisions of any separate written share redemption or purchase agreement (as provided in paragraph b. of Section 2 hereof), then the provisions of such separate agreement shall govern.

Section 5. Delivery of Share Certificates.

a. Rule. Upon payment of any cash and/or upon acknowledgment by the Corporation or the ESOP of any sum to be paid in installments, the Shareholder, his guardian, or his heirs, beneficiaries, or personal representative, as the case may be, shall forthwith deliver the certificates representing such Shareholder’s shares to be sold to the Corporation or the ESOP, as the case may be. If the Corporation elects to pay the purchase price in installments, such number of shares as shall be represented by any cash payment (based on the redemption price per share) shall belong to the Corporation, without restriction or limitation; such number of shares as shall be represented by the sum to be paid in installment payments (based on the redemption price per share) shall be held in escrow by a person designated by the Directors, until the sum due for said shares is paid, except that if, as and when such sum is from time to time, reduced, shares representing each such reduction (based on the redemption price per share) shall become the property of the

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Corporation, without limitations or restrictions. If the ESOP elects to pay the purchase price in installments, it shall deliver an unsecured promissory note to the Shareholder, his guardian, or his heirs, beneficiaries or personal representative, as the case may be, in the amount of the unpaid balance, and the shares so purchased shall be the property of the ESOP, without any limitations or restrictions.

b. Exception, Separate Agreement. If the provisions of paragraph a., above, are in conflict with the provisions of any separate written share redemption or purchase agreement (as provided in paragraph b. of Section 2), then the provisions of such separate agreement shall govern.

Section 6. Purchase by Shareholders. If, under applicable law, the Corporation is prohibited from redeeming shares (as provided in paragraph a. of Section 2), or exercises its right of refusal to purchase said shares and the ESOP is prohibited or does not exercise its right to purchase the shares, then the shares not so redeemed or purchased shall be offered to the Shareholders of the Corporation (at no more than the Corporation’s redemption price), each of whom shall then have the right (but not the obligation) for thirty (30) days from the date of such offer to purchase such shares. Each Shareholder shall have the opportunity to purchase a percentage of such shares equal to his proportionate ownership of all issued shares, and each Shareholder’s right to purchase his proportionate percentage of such shares shall be assignable only to the other Shareholders.

Section 7. Amendments. The provisions of this Article VIII shall not be changed by amendment, except by vote of the holders of more than fifty percent (50%) of the shares entitled to vote thereon. No shares held in escrow shall be voted directly or indirectly or counted for the purposes of such vote.

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ARTICLE IX

INDEMNIFICATION

Section 1. Right to Indemnification. Each person (including here and hereinafter, the heirs, executors, administrators, or estate of such person) (1) who is or was a director or officer of the Corporation, (2) who is or was an agent or employee of the Corporation other than an officer and as to whom the Corporation has agreed to grant such indemnity, or (3) who is or was serving at the request of the Corporation as its representative in the position of director, officer, agent, or employee of another corporation, partnership, joint venture, trust or other enterprise and as to whom the Corporation has agreed to grant such indemnity shall be indemnified by the Corporation as of right to the fullest extent permitted or authorized by current or future legislation or by current or future judicial or administrative decision (but, in the case of any such future legislation or decision, only to the extent that it permits the Corporation to provide broader indemnification rights than permitted prior to such legislation or decision), against any fine, liability, cost or expense, including attorneys’ fees, asserted against him or incurred by him in his capacity as such director, officer, agent, employee, or representative, or arising out of his status as such director, officer, agent, employee or representative.

Section 2. Advance of Costs, Charges and Expenses. Costs, charges and expenses (including attorneys’ fees) incurred by a person referred to in Section 1 of this Article in defending a civil or criminal action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding, upon receipt in the case of a director or officer, of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event that it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in this Article, and upon satisfaction of such other conditions as are required by current or future legislation (but with respect to future legislation, only to the extent that is provides conditions less burdensome to the director, officer, employee, agent or representative, and to the Corporation, than those provided previously). Such cost, charges and expenses incurred by other employees, agents and representatives may be so paid upon such terms

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and conditions, if any, as the Board deems appropriate. The Board may, in the manner set forth above, and upon approval of such director, officer, employee, agent or representative of the Corporation, authorize the Corporation’s counsel to represent such person, in any action, suit or proceeding, whether or not the Corporation is a party to such action, suit or proceeding.

Section 3. Procedure for Indemnification. Any indemnification or advance of costs, charges and expenses under this Article shall be made promptly, and in any event within 60 days, upon the written request of the director, officer, employee, agent or representative. The right to indemnification or advances as granted by this Article shall be enforceable by the director, officer, employee, agent or representative in any court of competent jurisdiction, if the Corporation denies such request, in whole or in part, or if no disposition thereof is made within 60 days. Such person’s costs and expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any such action that the claimant has not met the applicable standard of conduct, if any, required as a prerequisite to such indemnification or advances under the General Corporation Act, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including the Board or a committee thereof, its independent legal counsel, and its Shareholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct, nor the fact that there has been an actual determination by the Corporation (including the Board or a committee thereof, its independent legal counsel, and its Shareholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

Section 4. Other Rights: Continuance of Right to Indemnification. The indemnification or advance of costs, charges and expenses provided by this Article shall not be deemed exclusive of any other or future rights to which a person seeking indemnification may be

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entitled under any law (common or statutory), agreement, vote of Shareholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the Corporation. All rights to indemnification or advance of costs, charges and expenses under this Article shall be deemed to be a contract between the Corporation and each director, officer, employee, agent or representative of the Corporation described in Section 1 of this Article who serves or served in such capacity at any time while this Article is in effect. Any repeal or modification of this Article or any repeal or modification of relevant provisions of the General Corporation Act or any other applicable laws shall not in any way diminish any rights to indemnification of such director, officer, employee, agent or representative or the obligations of the Corporation arising hereunder.

Section 5. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any person who is or was or has agreed to become a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him or on his behalf in any such capacity, or arising out of his status as such, whether or not the Corporation would have the legal power to directly indemnify him against such liability.

Section 6. Savings Clause. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer, and each employee, agent and representative of the Corporation described in Section 1 of this Article, as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by an applicable portion of this Article that shall not have been invalidated to the full extent permitted by applicable law.

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ARTICLE X

SEAL

The Board shall provide a corporate seal which shall be in circular form.

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ARTICLE XI

AMENDMENT

These Bylaws may be altered, amended, supplemented or repealed, and new Bylaws adopted, by the Shareholders.

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HISTORY OF AMENDMENTS

1/28/89

R 3/8/89

R 1/9/93

R 1/7/95

A 1/31/03 Eliminate part-time employees as shareholders except by consent of Board of DirectorsArticle VIII

A 1/21/04 Various provisions: Art.II, Sec. 5; Art.III, Sec 14; Art. IV, Secs 4 & 5; Art. V, Sec 5                              (new); Art. VIII, Secs 1-4; and 6

A 1/28/05 Art.VIII, Sections 1 & 2

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EX-10.17

Exhibit 10.17

THE PBSJ CORPORATION

KEY EMPLOYEE SUPPLEMENTAL OPTION PLAN (KESOP)

Effective July 23, 2002

ARTICLE I

PURPOSE

The purpose of the Key Employee Supplemental Option Plan (hereinafter the “Plan”) is to reward key professionals with certain levels of monetary incentive in order to retain those key professionals beyond “mid-career” through the leadership phase of their careers and to provide further financial incentive for selected corporate officers to complete their careers with PBS&J. The Plan has two tiers, Tier 1: Key Employee Retention Program (KERP) and Tier 2: Supplemental Income Plan (SIP).

The Board of Directors of The PBSJ Corporation shall select the Participants based on formal nominations and recommendations from the Board of Directors of Post, Buckley, Schuh & Jernigan, Inc. (“PBS&J”) or their designees. The Board of Directors has been granted wide latitude in determining eligibility requirements and award amounts.

ARTICLE II

DEFINITIONS

2.1 “Award” shall mean Restricted Stock as used in Tier 1, KERP.

2.2 “Beneficiary” shall mean the person or persons who shall receive a benefit under this Plan as the result of a Participant’s death.

2.3 “Benefit” shall mean the supplemental retirement income provided under Tier 2, SIP.

2.4 “Benefit Commencement Date” shall mean the date upon which a Participant eligible to receive a benefit under the Plan Retires from his employment with the Company and commences to receive such benefit. The Benefit Commencement Date shall not precede a Participant’s 56^th birthday. In the case of a Participant who becomes disabled the Benefit Commencement Date shall have the meaning set forth in Section 4.5 hereof.

2.5 “Board” shall mean the Board of Directors of The PBSJ Corporation.

2.6 “Company” or “PBS&J” shall meant Post, Buckley, Schuh & Jernigan, Inc.

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2.7. “Corporation” shall mean The PBSJ Corporation.

2.8. “Participant” shall mean any employee of the Company, a subsidiary, or affiliate who is participating in this Plan in either Tier 1, Tier 2, or both.

2.9. “Gross Salary” shall mean a Participant’s stated annual salary exclusive of any bonus or other compensation.

2.10. “Plan” shall mean The PBSJ Corporation Key Employee Supplemental Option Plan as set forth herein and as amended from time to time.

2.11. “Restricted Stock” shall mean stock of The PBSJ Corporation bearing the following language: “The shares represented by this certificate were issued under the provisions of Section 83 of the Internal Revenue Code and as per terms of an agreement dated XX/XX/XXXX between the owner (as named on the face hereof) and The PBSJ Corporation . These shares are both forfeitable and non-transferable until the owner has both reached age fifty-six (56) and completed ten consecutive years (from the date of said agreement) in the continuous employment of The PBSJ Corporation and/or its subsidiaries.”

2.12. “Retirement” or “Retires” shall mean termination of employment and of the practice of engineering or such other discipline that Participant practices on behalf of PBS&J.

2.13. “Service” shall mean the number of years and fractions thereof, which represent the continuous employment of a Participant by the Company, a subsidiary or affiliate.

2.14. The use of the masculine gender in the provisions of this Plan shall be deemed to include the feminine gender unless the context indicates otherwise.

ARTICLE III

TIER 1 (KERP)

3.1 Purpose. Tier 1 Participants are those professionals in transition from “middle management” to “senior management” entering the leadership phase of their career with the Company. The purpose is to demonstrate the Participant’s value to the Company and encourage the Participant’s long-term career with the Company by increasing the Participant’s ownership in the Company. Tier 1 shall also be known as the Key Employee Retention Program or KERP.

3.2 Eligibility.

(a) The National Service Directors shall make nominations for Participants in the Plan annually to the PBS&J Board. PBS&J’s Chief Executive Officer shall determine the time and place for making such nominations. The PBS&J Board will make recommendations to The PBSJ Board and selection as a Participant requires unanimous approval by the Board of Directors of The PBSJ Corporation.

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(b) Participant should have a minimum of five (5) years as a Senior Associate in the PBS&J Incentive Plan; have demonstrated a consistent record of profitability and commitment to growth of the Company; and exemplify the Vision, Mission and Core Values of the Company.

3.3 Award. As an Award under Tier I the Participant will receive Restricted Stock annually, if nominated and selected, in an amount equal to five percent (5%) of the employee’s annual Gross Salary for a period of up to ten (10) years. A Participant must be renominated each year based on a continued demonstration of commitment and profitability to the Company. Such Restricted Stock would vest no earlier than age fifty-six (56). If the Participant reaches age 56 during the ten-year period, Restricted Stock awarded after age 56 would not vest until the end of the 10-year period.

3.4 Forfeiture; Disability; Death

(a) Forfeiture. A Participant shall forfeit any Restricted Stock awarded hereunder which has not vested if his/her employment is terminated as a result of (i) fraud, gross negligence, or willful misconduct; or (ii) the conviction of a felony involving moral turpitude, which conviction is no longer subject to appeal. Any determination of (i) shall be made by the Board in its complete discretion.

If Participant elects to terminate his/her employment any Restricted Stock that has not vested will be forfeited.

(b) Disability. If a Participant becomes disabled during the period in which any Restricted Stock has been awarded but has not yet vested and such disability prevents Participant from performing his/her assigned duties for the Company as described below then Participant’s employment shall terminate and such Restricted Stock awarded shall immediately vest in Participant. The vested stock owned by Participant shall be subject to sale back to the Corporation according to the By-Laws of the Corporation.

Periods of temporary disability and leaves of absence as provided in Section 6.4 hereof shall not be deemed to interrupt continuous employment.

A Participant shall be deemed disabled or suffering from a disability (herein referred to as “Disability” or “Disabled”) if, as a result of injury, sickness, or disease, he/she is prevented from performing all of the material duties of his/her regularly assigned responsibilities with the Company for a period of ninety (90) consecutive days or more. The Board shall make the determination of whether such person is Disabled for purposes of this Plan in its sole discretion.

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(c) Death. If a Participant’s death occurs during the period in which any Restricted Stock has not vested then the Restricted Stock awarded shall immediately vest and be subject to sale back to the Company according to the By-Laws of the Company.

ARTICLE IV

TIER 2 SUPPLEMENTAL INCOME PROGRAM (SIP)

4.1 Purpose. The Tier 2 SIP is designed to allow a participating PBS&J officer to extend the leadership phase of his/her Company career all the way to Retirement from PBS&J and thus receive an annual financial reward commencing at Retirement and extending into his/her early retirement years.

4.2 Eligibility.

(a) The Participant should have a minimum of ten (10) years as a Senior Associate as defined in the PBS&J Incentive Plan and be a corporate officer; have a consistent record of profitability and commitment to growth of the Company; exemplify the Vision, Mission and Core Values of the Company.

(b) To receive the full amount of the Benefit designated in Participant’s Agreement, the Participant must have reached age fifty-six (56) and have been in the Program for ten (10) years. The date of entry into the Program will be the date Company and Participant enter into an agreement (“Agreement”) establishing the Participant’s Benefit Level. Age fifty-six (56) is the minimum age for vesting in all or part of the designated Benefit under the SIP Program.

(c) If a Participant has reached age 56 for vesting in the Benefit but has not been in the Program the requisite ten (10) years and decides to Retire before attaining 10 years in the Program, the Participant will receive an annual payment on a pro rata basis determined by Participant’s tenure in the 10 year vesting requirement. [By way of example only, a Participant Retiring at age fifty-eight (58) and having only six (6) years in the Program would receive 60% of the annual Benefit Level provided in his/her Agreement.]

(d) Annual Benefit amounts while Participant is in the Program and before Retirement will increase by the 3% COLA each year, starting with the first anniversary of the Tier 2 agreement.

(e) Participants shall be eligible for upward movement through the Benefit Levels herein consistent with the Participant’s role and contribution to the Company, its Vision, Mission, and Core Values.

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4.3 Benefit Levels.

Level 1:	Vice Presidents	$15,000 per year up to 10 years
Level 2:	Senior Vice Presidents	Up to $35,000 per year for 10 years
Level 3:	Board of Directors	Up to $50,000 per year for 10 years
Level 4:	Executive Officers1	Up to $75,000 per year for 15 years

4.4 Forfeiture.

(a) To be eligible to receive the Benefit once the vesting requirements have been met and Participant has Retired, the Participant must not act in any capacity for any business enterprise which competes in a substantial degree with the Company or any subsidiary or affiliate thereof, nor engage in any activity which involves substantial competition with the Company for a period of one (1) year after Retiring from the Company without the consent of the Company. Such consent shall not be withheld unless the Participant’s competitive activities on behalf of another employer could be reasonably expected to significantly impact in an adverse manner the operations of the Division in which the Participant had been assigned prior to Retirement.

(b) Participant agrees not to reveal to any third party any trade secrets or other confidential or proprietary information of the Company, including but not limited to, client lists, operational methods, financial information or other information the Company generally regards and protects as confidential and proprietary.

(c) If Participant should violate subsections (a) and/or (b) above without the consent of the Company such Participant’s entire or remaining Benefit payments, as the case may be, shall be forfeited.

4.5 Disability Benefits.

(a) Disability Before Ten Years Participation. If a Participant becomes Disabled or suffers from a Disability prior to meeting either the age 56 requirement or 10 years in the program, he/she shall be entitled to receive a Benefit amount equal to that which the Participant would have been eligible to receive had he/she Retired on the same date as the date of determination of the Disability. That Benefit amount shall be calculated according to the provisions of paragraph 4.2(c). Said amount would be payable for ten (10) years commencing upon Participant’s determination of Disability, provided, however, that Participant must have been in the Plan for at least 6 months.

(b) Disability After Ten Years Participation. If a Participant becomes Disabled or suffers from a Disability after meeting the age 56 and 10 year tenure requirement for receiving his/her designated Benefit hereunder but before Benefit payments have

¹ Chairman, President, CEO, CFO, COO

5

commenced, the Participant shall be entitled to receive payments starting immediately for the entire 10-year Benefit period. The annual amount thereof shall be equal to the annual Benefit Level amount that the Participant was entitled to receive upon Retirement.

4.6 Death Benefits.

(a) Death Before Ten Years Participation. If a Participant’s death occurs prior to Retirement, his Beneficiary shall be entitled to receive a Death Benefit (hereinafter referred to as the “Death Benefit”) in an amount equal to that which the Participant would have been eligible to receive had he/she Retired on the same date as the date of death. That amount would be calculated according to the provisions of paragraph 4.2(c). Said amount would be payable for ten (10) years commencing upon Participant’s Death, provided, however, that Participant must have been in the Plan for at least 6 months.

(b) Death After Ten Years Participation. If a Participant’s death occurs after meeting the age 56 and 10 year tenure requirement for receiving his/her designated Benefit hereunder but before Benefit payments have commenced or before he has received all payments hereunder, the Participant’s Beneficiary shall be entitled to receive payments starting immediately for the entire Benefit period. The annual amount thereof shall be equal to the annual Benefit Level amount (or Disability) that the Participant had been receiving or was entitled to receive.

4.7 Suicide Disqualification. Notwithstanding Section 4.5 hereof, no Benefits shall be payable to a Beneficiary if the Participant’s death resulted from suicide within two (2) years after he/she becomes a Participant.

4.8 Designation of Beneficiary. Each Participant, immediately upon becoming a Participant, shall designate in writing the Beneficiary who shall receive a Benefit as a result of his death. The Participant may change the Beneficiary from time to time, at his discretion, by notifying the Company in writing.

In the event the Beneficiary dies before all Benefit payments to which the Beneficiary is entitled are made hereunder, the remaining payments shall be paid to the personal representative of the Beneficiary’s estate in accordance with applicable state law. If a Participant fails to designate a Beneficiary, or if no Beneficiary survives the Participant, the Benefit payments due hereunder shall be made to the personal representative of the Participant’s estate in accordance with applicable state law.

6

ARTICLE V

CLAIMS PROCEDURE

5.1. In the event a Participant (or Beneficiary) does not receive a distribution of a Benefit to which he/she believes he/she is entitled, he may present a claim to the Executive Committee. The claim for Benefits must be in writing and addressed to the Corporation.

The decision of the Board shall be made within sixty (60) days after receipt of a request for review and shall be communicated in writing to the claimant. Such written notice shall set forth the basis for the Board’s decision. If there are special circumstances (such as the need for a hearing) which require an extension of time for completing the review, the Board’s decision shall be rendered not later than one hundred twenty (120) days after receipt of a request for a review.

Should the Participant reject the Board’s determination the Parties will attempt to resolve their differences through mediation using a mutually agreed upon mediator whose costs shall be shared equally by the Parties. If the Parties cannot resolve the issue through mediation and one party institutes litigation it must be filed with a court of competent jurisdiction with venue in Miami-Dade County, Florida unless the Parties agree on another venue.

In any litigation involving this Plan, the prevailing party will be entitled to receive its reasonable attorneys’ fees and costs including any appellate proceedings.

ARTICLE VI

MISCELLANEOUS PROVISIONS

6.1 Source of Benefits. The Benefits which are provided by this Plan shall be paid by the Company to a Participant out of its general assets, purchase of annuities, restricted stock, or any other source, including the establishment of a trust, for the purpose of assuring the payment of Benefits; provided, however, that such assets remain subject to the claims of the general creditors of the Company. The Company, in its sole discretion, may apply for and procure as owner, and for its own benefit, insurance on the life of the Participant in such amounts and in such forms as the Company may choose. The Participant shall have no interest whatsoever in any such policy or policies, but, at the request of the Company, shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to which the Company has applied for insurance.

6.2 Employment Rights. This Plan shall not be deemed to create a contract of employment between the Company and any Participant and shall create no right for a Participant to continue in the Company’s employ for any specific period of time, or to create any other rights in a Participant or obligations on the part of the Company, except as are set forth herein, nor shall this Plan restrict the right of the Company to discharge or terminate a Participant.

7

6.3 Independence of Benefits. The amounts payable under this Plan shall be independent of, and in addition to, any other benefits or compensation payable to a Participant. This Plan shall not cause a change in a Participant’s compensation, nor have any effect whatsoever on benefits payable to a Participant under any benefit plan covering employees of the Company.

6.4 Leaves of Absence. A leave of absence granted by the Company to a Participant shall not be deemed an interruption in continuous employment of the Participant for purposes of determining eligibility pursuant to this Plan.

6.5 Assignability. A sale, transfer, alienation, assignment, pledge, collateralization, or attachment of any Award or Benefit provided by this Plan is prohibited and shall not be recognized nor deemed to be valid by the Company.

6.6 Withholding of Taxes. The Company shall withhold applicable federal, state, and local taxes from the Benefit payments due hereunder to the extent such withholding is required by reason of such laws.

6.7 Amendment and Termination of Plan. The Corporation intends to continue this Plan indefinitely. However, the Board of Directors of the Corporation reserves the right to amend, alter, modify, or revoke the Plan for its Participants at any time, without the approval of the shareholders of the Corporation provided:

(a) Such action shall apply equally to all Participants similarly situated;

(b) Such action shall not affect in any manner the Benefit payable to a Participant if payment of such Benefit commenced before such action was taken; and

(c) If such action has the effect of reducing or eliminating Benefits or making the eligibility requirements to receive a Benefit more stringent, each Participant shall be eligible to receive his/her stated Benefit or Disability Benefit which shall be the greater of:

(i) in Tier 1, the Restricted Stock already awarded as provided in Article 3 hereof with the vesting of that Restricted Stock according to the terms of Article 3, or any Award provided in accordance with any amendments, alterations, or modification of the Plan, which become effective after July 23, 2002.

(ii) in Tier 2,

a. the stated Benefit or Disability Benefit, as provided in Article 4 hereof calculated in accordance with Article 4 hereof based on his/her eligibility and Benefit Level immediately prior to the effective date of such amendment, alteration, modification or revocation, and such Benefit will be payable commencing upon the Benefit Commencement Date or death, as set forth in Article 4 hereof.

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b. the Benefit payable in accordance with any amendments, alterations, or modifications of the Plan, which become effective after July 23, 2002.

6.8. Administration. The Board shall have the full power and authority to interpret, construe, and administer this Plan on behalf of the Corporation and its interpretations and construction hereof shall be binding and conclusive on all Participants for all purposes. No member of the Corporation shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan unless attributable to his own willful misconduct or lack of good faith.

The criteria for eligibility for Tier Tier II and I outlined in this Plan are guidelines, and selection of Participants in either Tier who have not met all requirements is within the discretion of the Board.

6.9. Separate Account. To the extent required by law, the Company shall establish separate accounts for the Benefit of each Participant.

6.10 Separate Agreements. The Corporation shall enter into separate agreements (the “Agreement”) with Participants providing for the grant of Awards or Benefits described hereunder. In the event of any inconsistency between any such Agreement and the Plan, the Agreement shall govern.

6.11 Governing Law. The laws of the State of Florida shall govern this Plan without regard to the conflict of laws thereof.

6.12 Paragraph Captions. Paragraph and other captions contained in this Plan Document are for reference purposes only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Plan Document or any provision hereof.

End of Document

9

EX-10.18

Exhibit 10.18

AGREEMENT

THIS AGREEMENT (the “Agreement”) is entered into as of the 1st day of April, 1993, by and between The PBSJ Corporation and Post, Buckley, Schuh & Jernigan, Inc., Florida corporations with principal offices in Miami, Florida (collectively referred to herein as the “Corporation”, and John S. Shearer, a resident of the State of Florida (hereinafter referred to as the Employee”).

WHEREAS, the Corporation is engaged in the business of rendering engineering services, including consulting, planning and surveying as well as allied professional services; and

WHEREAS, the Employee is a member of a select group of management employees, is serving as Executive Vice President and a Director (of Post, Buckley, Schuh & Jernigan, Inc.) and has been instrumental in the development, expansion and success of the business of the Corporation; and

WHEREAS, the Corporation desires to provide the Employee with the additional benefits specified in this Agreement during the term of his employment with the Corporation.

NOW, THEREFORE, in consideration of the mutual covenents herein contained, the parties hereto agree as follows:

1. DEFINITIONS.

(a) “Board” shall mean the Board of Directors of the respective Corporation.

(b) “Stock” shall mean the common stock, par value $.01, of The PBSJ Corporation.

(c) “Restricted Stock” shall mean stock that is represented by certificates bearing the wording contained in Exhibit “A” (attached to and made a part hereof) on the back of said certificates.

(d) “Total Disability” shall mean the inability of the Employee to perform further services for the Corporation on a full-time basis due to physical or mental disability. The date on which the Employee begins to receive disability benefits under Social Security shall be evidence of the onset of said Total Disability.

(e) “Stock Ownership Plan” shall mean The PBSJ Corporation Stock Ownership Plan, as amended and restated through February 1, 1993 and as may be amended in the future.

-1-

2. BENEFIT. Simultaneous with the execution of this Agreement, the Corporation shall cause five hundred (500) shares of Restricted Stock to be issued to Employee. Thereafter, on April 1st in each of the next nine years (i.e., April 1, 1994 through April 1, 2002, inclusive) the Corporation shall cause an additional five hundred (500) shares of Restricted Stock to be issued to Employee, provided Employee is a full-time employee on each such April 1st. The total Restricted Stock contemplated to be issued herein is five thousand (5,000) shares.

3. STOCK OWNERSHIP PLAN. The employee will be credited with satisfying the requirement under the Stock Ownership Plan of having committed to the ownership of 5,000 shares of stock.

4. FEDERAL INCOME TAX CONSEQUENCES. The current Federal income tax consequences with respect to the receipt of Restricted Stock are set forth in Exhibit “B” (attached to and made a part hereof).

5. EMPLOYMENT RIGHTS. This Agreement shall not be deemed to create a contract of employment between the Corporation and the Employee, and shall create no right for the Employee to continue in the Corporation’s employ for any specified period of time, or to create any other rights in the Employee or obligations on the part of the Corporation, except as are set forth herein, nor shall this Agreement restrict the right of the Corporation to discharge or terminate the Employee.

6. PARTICIPATION IN OTHER EMPLOYEE BENEFIT PLANS. Any benefit under this Agreement shall not be deemed salary or other compensation to the Employee for the purpose of computing benefits to which he may be entitled under any pension plan or other arrangement of the Corporation for the benefit of its employees. Nothing contained herein shall in any manner modify, impair or affect the existing or future right or interest of the Employee to receive any employee benefits to which he would otherwise be entitled, or as a participant in any future incentive profit-sharing or bonus plan, stock option plan or pension plan of the Corporation, applicable generally to salaried employees. The rights and interests of the Employee to any employee benefits or as a participant or beneficiary in or under any or all such plans shall continue in full force and effect unimpaired, and the Employee shall have the right at any time hereafter to become a participant or beneficiary under or pursuant to any and all such plans.

7. ARBITRATION. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration conducted by and in accordance with the rules then in existence of the American Arbitration Association. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

-2-

8. AMENDMENT AND TERMINATION. The Board reserves the right to amend, alter, modify or revoke this Agreement at any time and for any reason.

9. GOVERNING LAW. This Agreement shall be construed in accordance with and governed by the laws of the State of Florida (without regard to the conflicts of laws thereof). All lawsuits and other proceedings related to this Agreement or the transactions herein described shall be commenced and held in Dade County, Florida and the employee waives all rights to object to the laying of venue in such jurisdiction. In the event of any litigation or arbitration arising by virtue of this Agreement, the prevailing party shall be entitled to an award of all court costs, litigation and arbitration expenses and attorneys’ fees at both trial and appellate levels.

10. NOTICES. Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been delivered and given for all purposes, if delivered personally to the party or to an officer of the party to whom the same is directed, or, whether or not the same is actually received, if sent by registered or certified mail, postage and charges prepaid, properly addressed to the addressee’s last known address.

11. INTEGRATED AGREEMENT. This Agreement constitutes the entire understanding and agreement among the parties hereto with respect to the subject matter hereof, and there are no agreements, understandings, restrictions, representations or warranties among the parties other than those set forth herein.

12. NO ORAL MODIFICATION. No modification or waiver of this Agreement or any part hereof shall be valid or effective unless in writing and signed by the party or parties sought to be charged therewith. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any breach or condition of this Agreement or of any other subsequent breach or condition, whether of like or different nature.

13. BINDING EFFECT. This Agreement is binding upon and shall inure to the benefit of the Corporation, its representatives, successors and assigns, and to the Employee, heirs and personal representatives and his designated beneficiaries. The Corporation and the Employee agree to execute any instruments and to perform any acts which are or may become necessary to effectuate this Agreement and to fulfill its terms.

14. PARAGRAPH CAPTIONS. Paragraph and other captions contained in this Agreement are for reference purposes only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.

-3-

IN WITNESS WHEREOF, the respective Corporation has caused this Agreement to be executed by its duly authorized officer and the Employee has hereunto set his hand and seal as of the date first above written.

ATTEST:		POST, BUCKLEY, SCHUH & JERNIGAN, INC.
By		By
	Secretary	Its	President
ATTEST:		THE PBSJ CORPORATION
By		By	/s/ William W. Randolph
	Asst. Secretary	Its	President
WITNESS:		EMPLOYEE:
/s/ Richard A. Wickett

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EXHIBIT “A”

THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED: (a) UNDER THE PROVISIONS OF SECTION 83 OF THE INTERNAL REVENUE CODE, AND (b) AS PER TERMS OF AN AGREEMENT DATED APRIL 1, 1993 BETWEEN SHAREHOLDER (AS NAMED ON THE FACE HEREOF) AND THE PBSJ CORPORATION (HEREINAFTER “CORPORATION”). THESE SHARES ARE BOTH FORFEITABLE AND NON-TRANSFERABLE IN THE EVENT THE SHAREHOLDER DOES NOT REMAIN IN THE CONTINUOUS FULL-TIME EMPLOYMENT OF THE CORPORATION AND/OR ITS SUBSIDIARIES FROM THE DATE OF ISSUANCE ON THE FACE HEREOF UNTIL JULY 8, 2007, EXCEPT IN THE CASE OF DEATH OR TOTAL DISABILITY (AS DEFINED IN SAID AGREEMENT).

THE BY-LAWS OF THIS CORPORATION CONTAIN RESTRICTIONS, LIMITATIONS, PREFERENCES AND QUALIFICATIONS INCIDENT TO OWNERSHIP, SALE AND TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE INCLUDING, AMONG OTHERS, PURCHASE OPTIONS; EVALUATION FORMULAS AND PROCEDURES TO DETERMINE PER SHARE SALE/PURCHASE VALUE/PRICE; INSTALLMENT PAYMENT PROVISIONS AND OPTIONS; OTHER RESTRICTIONS, LIMITATIONS, PREFERENCES AND QUALIFICATIONS; AND PROVISIONS RESTRICTING, LIMITING AND BINDING SHAREHOLDER’S GUARDIANS, HEIRS, PERSONAL REPRESENTATIVES, ASSIGNEES, AND OTHERS RESPECTING THE FOREGOING. COPIES OF SAID BY-LAWS MAY BE OBTAINED, WITHOUT CHARGE FROM THE OFFICE OF THIS CORPORATION. NO TRANSFER SHALL BE VALID OR SHALL BE REGISTERED ON THE BOOKS OF THE CORPORATION OF ANY SHARES UPON WHICH THE SHAREHOLDER IS INDEBTED TO THE CORPORATION. NO TRANSFER SHALL BE VALID OR BE REGISTERED ON THE BOOKS OF THE CORPORATION WITHOUT THE ORDER OF THE BOARD OF DIRECTORS.

EXHIBIT “B”

FEDERAL INCOME TAX CONSEQUENCES

In the case of Restricted Stock, an employee will generally not be deemed to have realized taxable income upon receipt of such shares. An employee will realize ordinary income on the date on which the Restricted Stock is no longer subject to forfeiture, in an amount equal to the fair market value of the shares on that date.

As an alternative, an employee may elect, upon the receipt thereof, to include in his gross income in that year the fair market value of such shares at the time they are issued. Such an election must be made within 30 days after the date of the issuance of Restricted Stock and may not be revoked by the employee except with the consent of the Internal Revenue Service. In the event that an election is made and the Restricted Stock is subsequently forfeited, an employee will not be entitled to a deduction with respect to the forfeiture.

The Corporation will be entitled to a deduction for the amount included in the ordinary income of the employee in the year in which such inclusion occurs.

EX-10.19

Exhibit 10.19

AMENDMENT TO SUPPLEMENTAL INCOME RETIREMENT AGREEMENT

THIS AMENDMENT (the “Amendment”) is entered into this 1st day of January, 2000, by and between The PBSJ Corporation and Subsidiaries, Florida corporations with principal offices in Miami, Florida (collectively referred to herein as the “Corporation”), and TODD J. KENNER , a resident of the State of Nevada, hereinafter referred to as the “Employee”).

RECITALS

A. The Corporation and the Employee entered into a Supplemental Income Retirement Agreement (the “Agreement”) dated August 23, 1996, which Agreement dealt with the employment of the Employee for a specified period and the payment to Employee of a Supplemental Income Retirement benefit.

WHEREAS, the parties hereto desire to amend the Agreement to reflect the current and revised understanding of the parties with respect to certain rights, obligations and benefits of the parties under the Agreement.

WHEREAS, the Board of Directors of the Corporation has approved the Supplemental Income Plan (the “Plan”), the purpose of which is to provide supplemental income retirement benefits to key employees of the Corporation; and

WHEREAS, the Board of Directors of the Corporation has determined, in its sole discretion, that the Employee satisfies the eligibility requirements for participation in the Plan at the Benefit Level set forth below.

NOW, THEREFORE, pursuant to Section 8.10 of the Plan, and in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

1. Eligibility for Benefits.

(a) Full Benefit. The Employee shall be eligible to receive a Full Benefit, as defined in Section 5.1 of the Plan, provided that the Employee (i) is at least 56 years old and has participated in the Plan for at least ten (10) years, and (ii) remains in the active and continuous employ of the Corporation until he is at least 56 years old. Plan participation begins with the effective date of the original Agreement. The Employee shall commence to receive his Full Benefit on the “Benefit Commencement Date” as defined in the Plan.

(b) Disability Benefit. In the event that the Employee is ineligible to receive a Full Benefit, he shall be eligible to receive a Disability Benefit equal to his Normal Benefit if he shall become disabled (as such term is defined in Section 4.2 of the Plan) after completing at least five (5) years of participation in the Plan. The Employee shall commence to receive his Disability Benefit at such time as the Employee (i) is 65 years of age; and (ii) would have been in the Plan for ten (10) years but for the disability (the “Disability Benefit Commencement Date”).

(c) Death Benefit. If the Employee dies prior to becoming eligible to receive a Full Benefit, the Employee’s designated beneficiary shall be entitled to receive an annual Death Benefit of $20,000, payable for a period of ten (10) years; provided, however, that in order to be eligible for a Death Benefit, the Employee must have participated in the Plan for at least six (6) months prior to the date of the Employee’s death.

2. Benefit Level. The intent of the Agreement and Amendment is to create an annual supplemental income retirement benefit at the Level 3 Executive level in the amount of $50,000.00 all as defined in Article V and VI of the Plan.

3. Amount of Benefit. In addition to the Restricted Stock benefit contained in the original Agreement dated August 23, 1996, the employee will receive an additional annual Normal Benefit amount of FIFTEEN THOUSAND DOLLARS ($ 15,000.00), payable commencing on the Full Benefit Commencement Date for a period of ten (10) years. The Corporation shall withhold applicable federal, state and local taxes from amounts due pursuant to the payment of any Benefit hereunder to the extent such withholding is required by reason of such laws.

4. Confidentiality. The Employee agrees that, during the period of his employment and thereafter, the Employee shall not, to the detriment of the Corporation, knowingly disclose or reveal to any unauthorized person any confidential or proprietary information relating to the Corporation, its subsidiaries or its affiliates. If the Employee reveals to any third party any trade secrets or financial or other confidential or proprietary information concerning the Corporation, the Employee’s entire or remaining Benefit payments, as the case may be, shall be forfeited.

5. Noncompetition. The Employee agrees that during the first year after termination of employment with the Corporation, the Employee shall not solicit professional work, directly or indirectly, either as an individual for the Employee’s own account, or as a partner or joint venture, or as an employee or agent for any person or as an officer, director, or shareholder of any business entity or otherwise, in the fields of engineering, architecture, planning, landscape architecture, land surveying and management/administration from any client of the Corporation on projects which have been or are currently being serviced by the Corporation. If the Employee should violate this Section 4, the Employee’s entire or remaining Benefit payments, as the case may be, shall be forfeited.

The Employee acknowledges that services under the Agreement and Amendment are of a special, unique, unusual, extraordinary, and intellectual character, and that a breach by the Employee of Sections 3 and 4 could cause the Corporation irreparable injury and damage and would therefore cause a breach of the Agreement and Amendment.

6. Reasons for Forfeiture. The Corporation shall stop payments to the Employee hereunder if the Employee is involved in fraud, or if the Corporation determines that the Employee has been grossly negligent or has been engaged in willful misconduct in the course of his employment. Nothing contained in the Agreement and Amendment shall in any way be construed to limit or otherwise waive the legal or equitable rights or remedies of the Corporation to recoup monies paid hereunder to the Employee if the Corporation determines that it is entitled to such recoupment.

7. Assignment. Neither the Employee nor any designated beneficiary, nor any other payee under the Agreement and Amendment, shall have any power to transfer, assign, anticipate, hypothecate or otherwise encumber in advance any Benefit payable hereunder, nor shall any Benefit payable be subject to seizure for the payment of any debts or judgments of the Employee or any payee or be transferable by the Employee or any payee by operation of law in the event of such person’s bankruptcy, insolvency or otherwise.

8. Employment Rights. The Agreement and Amendment, and the Plan, shall not be deemed to create a contract of employment between the Corporation and the Employee, and shall create no right for the Employee to continue in the Corporation’s employ for any specific period of time, or to create any other rights in the Employee or obligations on the part of the Corporation, except as are set forth herein or in the Plan, nor shall the Agreement, Amendment or the Plan restrict the right of the Corporation to discharge or terminate the Employee.

9. Termination of the Plan. The Employee acknowledges and agrees that The PBSJ Corporation, through its Board of Directors, has the right to amend, alter, modify or revoke the Plan for all participating employees at any time, without the approval of the shareholders of The PBSJ Corporation, except as specifically set forth in Section 8.7 of the Plan.

10. Participation in Other Employee Benefit Plans. Any retirement or disability compensation payable under the Agreement and Amendment shall not be deemed salary or other compensation to the Employee for the purpose of computing benefits to which he may be entitled under any pension plan or other arrangement of the Corporation for the benefit of its employees. Nothing contained herein shall in any manner modify, impair or affect the existing or future right or interest of the Employee to receive any employee benefits to which he would otherwise be entitled, or as a participant in any future incentive profit-sharing or bonus plan, stock option plan or pension plan of the Corporation, applicable generally to salaried employees. The rights and interests of the Employee to any employee benefits or as a participant or beneficiary in or under any or all such plans shall continue in full force and effect unimpaired, and the Employee shall have the right at any time hereafter to become a participant or beneficiary under or pursuant to any and all such plans.

11. Arbitration. Any controversy or claim arising out of or relating to the Agreement or Amendment, or the breach thereof, which has been processed through the claims procedure set forth in Article VII of the Plan, shall be settled by arbitration conducted by and in accordance with the rules then in existence of the American Arbitration Association. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

12. Governing Law. The Agreement and Amendment shall be construed in accordance with and governed by the laws of the State of Florida (without regard to the conflicts of laws thereof). All lawsuits and other proceedings related to the Agreement and Amendment or the transactions herein described shall be commenced and held in Dade County, Florida and the Employee waives all rights to object to the laying of venue in such jurisdiction. In the event of any litigation or arbitration arising by virtue of the Agreement and Amendment, the prevailing party shall be entitled to an award of all court costs, litigation and arbitration expenses and attorneys’ fees at both trial and appellate levels.

13. Notices. Any notice, payment, demand or communication required or permitted to be given by any provision of the Agreement and Amendment shall be in writing and shall be deemed to have been delivered and given for all purposes, if delivered personally to the party or to an officer of the party to whom the same is directed, or, whether or not the same is actually received, if sent by registered or certified mail, postage and charges prepaid, properly addressed to the addressee’s last known address.

14. Integrated Agreement. Except as expressly provided herein, the Agreement shall remain in full force and effect without any modification or waiver of any provision thereof. The Agreement, this Amendment, and the Plan, constitute the entire understanding and agreement among the parties hereto with respect to the subject matter hereof, and there are no agreements, understandings, restrictions, representations or warranties among the parties other than those set forth herein.

15. No Oral Modification. No modification or waiver of the Agreement and Amendment or any part hereof shall be valid or effective unless in writing and signed by the party or parties sought to be charged therewith. No waiver of any breach or condition of the Agreement and Amendment shall be deemed to be a waiver of any breach or condition of the Agreement and Amendment or of any other subsequent breach or condition, whether of like or different nature.

16. Binding Effect. The Agreement and Amendment is binding upon and shall inure to the benefit of the Corporation, its representatives, successors and assigns, and to the Employee, heirs and personal representatives and his designated beneficiaries. The Corporation and the Employee agree to execute any instruments and to perform any acts that are or may become necessary to effectuate the Agreement and Amendment and to fulfill its terms.

17. Paragraph Captions. Paragraph and other captions contained in the Agreement and Amendment are for reference purposes only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of the Agreement and Amendment or any provision hereof.

IN WITNESS WHEREOF, the respective Corporation has caused this Amendment to be executed by its duly authorized officer and the Employee has hereunto set his hand and seal as of the date first above written.

ATTEST:		POST, BUCKLEY, SCHUH & JERNIGAN, INC.
By	/s/ W. Scott DeLoach	By	/s/ Richard A. Wickett
	W. Scott DeLoach Assistant Secretary	Its	Sr. Executive VP
ATTEST:		THE PBSJ CORPORATION
By	/s/ Becky S. Schaffer	By	/s/ John B. Zumwalt, III
	Becky S. Schaffer Assistant Secretary	Its	President
WITNESS:		EMPLOYEE:
		By	/s/ Todd J. Kenner
			TODD J. KENNER

EXHIBIT A

In the event of my death, I hereby designate Sally Kenner (name) wife (relation) to receive the deferred compensation payments provided for in the foregoing Agreement. In the event that said beneficiary does not survive me, the payments shall be made to The Kenner Family Trust (name) __________________ (relation). In the event neither beneficiary designated above shall survive me or if neither beneficiary designated above can be located, all benefits to which I may from time to time be entitled shall be payable to my estate.

EMPLOYEE

/s/ Todd J. Kenner

TODD J. KENNER

Witness

Witness

3/29/00

Date

EX-10.20

Exhibit 10.20

KEY EMPLOYEE SUPPLEMENTAL INCOME PROGRAM

AGREEMENT (SIP)

THIS AGREEMENT (the “Agreement”) is entered into this 1^st day of January, 2004, by and between Post, Buckley, Schuh & Jernigan, Inc. (“PBS&J” or “the Company”) and The PBSJ Corporation (“PBSJ Corp”), Florida corporations with principal offices in Miami, Florida (collectively referred to herein as the “Corporation”), and Todd J. Kenner, a resident of the State of Nevada (hereinafter referred to as the “Participant”) and sometimes referred to collectively as “the Parties.” The term “PBS&J” shall include its subsidiaries and affiliates.

WHEREAS, PBS&J is engaged in providing consulting engineering services, including but not limited to design, planning, surveying, and allied professional services; and

WHEREAS, the Board of Directors of The PBSJ Corporation has approved The PBSJ Corporation Key Employee Supplemental Option Plan (KESOP) (hereinafter “the Plan”), a section of which is known as Tier 2. Tier 2 known as the Key Employee Supplemental Income Program or SIP (the “Program”) is designed to allow a participating PBS&J officer to extend the leadership phase of his/her PBS&J career all the way to Retirement from PBS&J and thus receive an annual financial reward commencing at Retirement and extending into his/her early retirement years.

WHEREAS, Participant is currently a Participant under the 1988 Supplemental Income Plan of The PBSJ Corporation with an Agreement dated August 23, 1996 and an Amendment dated January 1, 2000;

WHEREAS, the Board of Directors of The PBSJ Corporation has determined, in its sole discretion, that the Participant satisfies the eligibility requirements for participation in Tier 2 of the Plan as set forth below and Participant shall be “grandfathered” into the new KEY EMPLOYEE SUPPLEMENTAL OPTION PLAN (KESOP) with this Agreement replacing the earlier Amendment dated January 1, 2000. Upon execution of this Agreement the prior Amendment shall be null and void.

NOW, THEREFORE, pursuant to Article 4 of the Plan and in consideration of the mutual covenants herein contained, the Parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

1.1 “Beneficiary” shall mean the person or persons who shall receive a benefit under this Program as the result of a Participant’s death.

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1.2 “Benefit” shall mean the supplemental retirement income provided under Tier 2, SIP.

1.3 “Benefit Commencement Date” shall mean the date upon which a Participant eligible to receive a benefit under the Plan Retires from his/her employment with the Company and commences to receive such benefit. The Benefit Commencement Date shall not precede a Participant’s 56^th birthday. In the case of a Participant who becomes disabled the Benefit Commencement Date shall have the meaning set forth in Section 4.5 of the Plan.

1.4 “Board” shall mean the Board of Directors of The PBSJ Corporation.

1.5 “Company” or “PBS&J” shall mean Post, Buckley, Schuh & Jernigan, Inc., a subsidiary or affiliate.

1.6 “Corporation” shall mean The PBSJ Corporation.

1.7 “Participant” shall mean any employee of the Company, a subsidiary, or affiliate who is participating in this SIP Program.

1.8 “Plan” shall mean The PBSJ Corporation Key Employee Supplemental Option Plan as amended from time to time.

1.9 “Retirement” or “Retires” shall mean termination of employment and of the practice of engineering or such other discipline that Participant practices on behalf of PBS&J.

1.10 “Service” shall mean the number of years and fractions thereof, which represent the continuous employment of a Participant by the Company, a subsidiary or affiliate.

1.11 The use of the masculine gender in the provisions of this Plan shall be deemed to include the feminine gender unless the context indicates otherwise.

ARTICLE 2

ELIGIBILITY

2.1 Eligibility.

(a) The Participant shall be eligible to receive the full amount of the Benefit designated in this Agreement if the Participant has reached the age of fifty-six (56) and been in the Program for ten (10) years. The date of entry into the Program will be the date the Parties hereto entered into an Agreement establishing the Participant’s Benefit amount.

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(b) If Participant has reached age 56 for vesting in the Benefit but has not been in the Program the requisite ten (10) years and decides to Retire before attaining 10 years in the Program, the Participant will receive an annual payment on a pro rata basis determined by Participant’s tenure in the 10 year vesting requirement. [By way of example only, a Participant Retiring at age fifty-eight (58) and having only six (6) years in the Program would receive 60% of the annual Benefit provide in this Agreement.]

(c) Annual Benefit amounts while Participant is in the Program and before Retirement will increase by the 3% COLA each year, starting with the first anniversary of this agreement.

2.2 Amount of Benefit. The amount of Participant’s Annual Benefit payable under this Agreement shall be Forty Thousand Dollars ($40,000) payable in monthly installments commencing on the Benefit Commencement Date for a period often (10) years. The Corporation shall withhold applicable federal, state and local taxes from the amounts due pursuant to the payment of any Benefit hereunder to the extent such withholding is required by reason of such laws.

2.3 Forfeiture.

(a) To be eligible to receive the Benefit once the vesting requirements have been met and Participant has Retired, the Participant must not act in any capacity for any business enterprise which competes in a substantial degree with the Company or any subsidiary or affiliate thereof, nor engage in any activity which involves substantial competition with the Company for a period of one (1) year after Retiring from the Company without the consent of the Company. Such consent shall not be withheld unless Participant’s competitive activities on behalf of another employer could be reasonably expected to significantly impact in an adverse manner the operations of the Division in which the Participant had been assigned prior to Retirement.

Participant acknowledges that his/her services under this Agreement are of a special, unique, unusual, extraordinary, and intellectual character, and that a breach by Participant of this Section 2.3 could cause the Company irreparable injury and damage and would therefore, cause a breach of this Agreement.

(b) Participant agrees not to reveal to any third party any trade secrets or other confidential or proprietary information of the Company, including but not limited to, client lists, operational methods, financial information or other information the Company generally regards and protects as confidential and proprietary.

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(c) If Participant should violate subsections (a) and/or (b) above without the consent of the Company, such Participant’s entire or remaining Benefit payments, as the case may be, shall be forfeited.

(d) The Corporation shall stop payments to Participant hereunder if Participant is involved in fraud, or if the Corporation determines that Participant has been grossly negligent or has been engaged in willful misconduct in the course of his/her employment. Nothing contained in this Agreement shall in any way be construed to limit or otherwise waive the legal or equitable rights or remedies of the Corporation to recoup monies paid hereunder to Participant if the Corporation determines that it is entitled to such recoupment.

2.4. Disability Benefits.

(a) Disability Before Ten Years Participation. If Participant becomes disabled or suffers from a disability prior to meeting either the age 56 requirement or 10 years in the Program, he/she shall be entitled to receive a Benefit amount equal to that which the Participant would have been eligible to receive had he/she Retired on the same date as the date of determination of the disability. The Benefit amount shall be calculated according to the provisions of paragraph 2.1(b). Said amount would be payable for ten (10) years commencing upon Participant’s determination of disability, provided, however, that Participant must have been in the Program for at least 6 months.

Periods of temporary Disability and leaves of absence granted by the Company shall not be deemed to interrupt continuous employment.

A Participant shall be deemed Disabled or suffering from a Disability (herein referred to as “Disability” or “Disabled”) if, as a result of injury, sickness, or disease, he is prevented from performing all of the material duties of his/her regularly assigned responsibilities with the Company for a period of ninety (90) consecutive days or more. The Company shall make the determination of whether such person is Disabled for purposes of this Agreement.

(b) Disability After Ten Years Participation. If a Participant becomes disabled or suffers from a disability after meeting the age 56 and 10 year tenure requirement for receiving his/her designated Benefit hereunder but before Benefit payments have commenced, the Participant shall be entitled to receive payments starting immediately for the entire 10-year Benefit period. The annual amount thereof shall be equal to the annual Benefit Level amount that the Participant was entitled to receive upon Retirement.

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2.5 Death Benefits.

(a) Death Before Ten Years Participation. If a Participant’s death occurs prior to Retirement, his/her Beneficiary shall be entitled to receive a Death Benefit (hereinafter referred to as the “Death Benefit”) in an amount equal to that which the Participant would have been eligible to receive had he/she Retired on the same date as the date of death. The amount would be calculated according to the provisions of paragraph 2.1(b). Said amount would be payable for ten (10) years commencing upon Participant’s Death, provided, however, that Participant must have been in the Program for at least 6 months.

(b) Death After Ten Years Participation. If Participant’s death occurs after meeting the age 56 and 10-year tenure requirement for receiving his/her designated Benefit hereunder but before Benefit payments have commenced or before he has received all payments hereunder, Participant’s Beneficiary shall be entitled to receive payments starting immediately for the entire Benefit period. The annual amount thereof shall be equal to the annual Benefit amount (or Disability) that Participant had been receiving or was entitled to receive.

2.6 Suicide Disqualification. Notwithstanding Section 2.4 hereof, no Benefits shall be payable to a Beneficiary if Participant’s death resulted from suicide within two (2) years after he/she becomes a Participant.

2.7 Designation of Beneficiary. Participant, immediately upon becoming a Participant, shall designate in writing the Beneficiary who shall receive a Benefit as a result of his/her death. Participant may change the Beneficiary from time to time, as his/her discretion, by notifying the Company in writing.

In the event the Beneficiary dies before all Benefit payments to which the Beneficiary is entitled are made hereunder, the remaining payments shall be paid to the personal representative of the Beneficiary’s estate in accordance with applicable state law. If Participant fails to designate a Beneficiary, or if no Beneficiary survives Participant, the Benefit payments due hereunder shall be made to the personal representative of Participant’s estate in accordance with applicable state law.

ARTICLE 3

DISPUTE RESOLUTION

3.1 In the event Participant (or a Beneficiary) does not receive a distribution of a Benefit to which he believes he is entitled, he may present a claim to the Board of Directors of The PBSJ Corporation. The claim must be in writing and addressed to the Corporation.

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The decision of the Board shall be made within sixty (60) days after receipt of a request for review and shall be communicated in writing to Participant (or a Beneficiary). Such written notice shall set forth the basis for the Board’s decision. If there are special circumstances (such as the need for a hearing) which require an extension of time for completing the review, the Board’s decision shall be rendered not later than one hundred twenty (120) days after receipt of a request for a review.

Should Participant reject the Board’s determination, the Parties will attempt to resolve their differences through mediation using a mutually agreed upon mediator whose costs shall be shared equally by the Parties. If the Parties cannot resolve the issue through mediation and one Party institutes litigation it must be filed with a court of competent jurisdiction with venue in Miami-Dade County, Florida unless the Parties agree on another venue.

In any litigation involving this Agreement, the prevailing party will be entitled to receive its reasonable attorneys’ fees and costs including any appellate proceedings.

ARTICLE 4

MISCELLANEOUS

4.1 Assignment. Neither Participant nor any designated Beneficiary, nor any other payee under this Agreement, shall have any power to transfer, assign, anticipate, hypothecate or otherwise encumber in advance any Benefit payable hereunder, nor shall any Benefit payable be subject to seizure for the payment of any debts or judgments of any payee or be transferable by Participant to any payee by operation of law in the event of such person’s bankruptcy, insolvency or otherwise.

4.2 Employment Rights. This Agreement and the Plan shall not be deemed to create a contract of employment between the Corporation and Participant, and shall create no right for Participant to continue in the Corporation’s employ for any specific period of time, or to create any other rights in Participant or obligations on the part of the Corporation, except as are set forth herein or in the Plan, nor shall this Agreement or the Plan restrict the right of the Corporation to discharge or terminate Participant.

4.3 Termination of the Plan. Participant acknowledges and agrees that the Corporation through its Board of Directors, has the right to amend, alter, modify or revoke the Plan for all participating employees at any time, without the approval of the shareholders of The PBSJ Corporation, except as specifically set forth in the Plan.

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4.4 Participation in Other Employee Benefit Plans. Any Retirement or Disability compensation payable under this Agreement shall not be deemed salary or other compensation to Participant for the purpose of computing benefits to which he/she may be entitled under any pension plan or other arrangement of the Corporation for the benefit of its employees. Nothing contained herein shall in any manner modify, impair or affect the existing or future right or interest of Participant to receive any employee benefits to which he/she would otherwise be entitled, or as a participant in any future incentive profit-sharing or bonus plan, stock option plan or pension plan of the Corporation applicable generally to salaried employees. The rights and interests of Participant to any employee benefits or as a participant or beneficiary under any or all such plans shall continue in full force and effect unimpaired, and Participant shall have the right at any time hereafter to become a participant or beneficiary under or pursuant to any and all such plans.

4.5 Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Florida without regard to the conflicts of laws thereof. All lawsuits and other proceedings related to this Agreement or the transactions herein described shall be commenced in a court of competent jurisdiction in Miami-Dade County, Florida unless the parties mutually agree otherwise.

4.6 Notices. Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been delivered and given for all purposes, if delivered personally to the party or to an officer of the party to whom the same is directed, or, whether or not the same is actually received, if sent by registered or certified mail, postage and charges prepaid, properly addressed to the addressee’s last known address.

4.7 Integrated Agreement. This Agreement and the Plan constitute the entire understanding and agreement among the parties hereto with respect to the subject matter hereof, and there are no agreements, understandings, restrictions, representations or warranties among the parties other than those set forth herein.

4.8 No Oral Modification. No modification or waiver of this Agreement or any part hereof shall be valid or effective unless in writing and signed by the Party or Parties sought to be charged therewith. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any breach or condition of this Agreement or of any other subsequent breach or condition, whether of like or different nature.

4.9 Binding Effect. This Agreement is binding upon and shall inure to the benefit of the Corporation, its representatives, successors and assigns, and to Participant, his/her heirs and personal representatives and/or designated beneficiaries. The Corporation and Participant agree to execute any instruments and to perform any acts, which are or may become necessary to effectuate this Agreement and to fulfill its terms.

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4.10 Paragraph Captions. Paragraph and other captions contained in this Agreement are for reference purposes only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.

IN WITNESS WHEREOF, the respective Corporation has caused this Agreement to be executed by its duly authorized officer and Participant has hereunto set his/her hand and seal as of the date first written above.

Attest:		Post, Buckley, Schuh & Jernigan, Inc.
By:	/s/ Charles D. Nostra	By:
	Charles D. Nostra, Assistant Secretary	Its:
Attest:		The PBSJ Corporation
By:	/s/ Becky S. Schaffer	By:	/s/ Richard A. Wickett
	Assistant Secretary	Its:
Witness:		Todd J. Kenner
		/s/ Todd. J. Kenner

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BENEFICIARY

In the event of my death, I hereby designate Sally Kenner (name), Wife (relation) to receive the deferred compensation payments provided for in the forgoing Agreement. In the event that said beneficiary does not survive me, the payments shall be made to Todd & Sally Kenner Family Trust (name), ___________________ (relation). In the event neither beneficiary designated above shall survive me or if neither beneficiary designated above can be located, all benefits to which I may from time to time be entitled shall be payable to the personal representative of my estate in accordance with applicable state laws.

EMPLOYEE

/s/ Todd. J. Kenner

Date: 8/9/2004

Witness

Witness

EX-10.21

Exhibit 10.21

CONSULTING/SUPPLEMENTAL RETIREMENT/DEATH BENEFITS

AGREEMENT

THIS AGREEMENT (the “Agreement”) is entered into as of the 24^th day of September, 1986, by and between Post, Buckley, Shuh & Jernigan, Inc., the PBSJ Corporation, Florida corporations with principal offices in Miami, Florida (together hereinafter referred to as the “Corporation”), Phillip E. Searcy, 5436 N. Dean Road, Orlando, Florida 32817 (hereinafter referred to as the “Employee”).

WHEREAS, the Corporation is engaged in the business of rendering engineering services, including consulting, planning and surveying as well as allied professional services; and

WHEREAS, the Employee has been employed continuously by the Corporation since December 1, 1972, has served as an officer and director for many years and has been instrumental in the development, expansion and success of the business of the Corporation; and

WHEREAS, the Corporation, through its Board of Directors, recognized that the future services of the Employee will be of great value to the Corporation; and

WHEREAS, the Employee is willing to continue in thye employ of the Corporation on a full-time basis for the period specified in this Agreement and on the terms and conditions herein set forth; and

WHEREAS, the Corporation and the Employee desire to replace that certain employment agreement between the Corporation and the Employee, dated May 30, 1985, as amended, with this Agreement; and

WHEREAS, the Corporation desires to provide to the Employee the additional retirement, disability and death benefits specified in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

1. Employment.

(a) The Corporation agrees to employ the Employee and the Employee agrees to serve the Corporation, during the employment term specified in paragraph 2 hereof in an executive capacity similar to his past and present activities for the Corporation, with such additional duties as may be reasonably assigned to him from time to time by the Board of Directors of the Corporation.

(b) During the employment term specified in paragraph 2 hereof, the Employee shall treat with strict confidentiality the business affairs of the Corporation and its subsidiaries and affiliates and shall devote his entire time and attention exclusively to the business of the Corporation. Notwithstanding the foregoing, the Employee may invest his assets in any form or manner as will not require any services on his part in the associations in which such investments are made. In addition, the Employee may serve as a director of or advisor to any company, corporation, partnership or association which is unrelated to the Corporation, provided such service is approved in advance by the Board of Directors of the Corporation. If the Employee is elected or appointed as an officer or director of the Corporation during the employment term specified in paragraph 2 hereof, he shall serve in said capacity or capacities without additional compensation. The Employee will not be required to perform any services hereunder which will necessitate moving his residence from Orlando, Florida, unless he agrees, in writing, to such relocation.

2. Employment Term. The term of employment of the Employee hereunder shall commence on the date of execution of this Agreement, and shall continue until January 1, 1996 nor until terminated in accordance with this Agreement. Upon mutual written agreement of the Employee and the Corporation, the employment term specified in this paragraph 2 may be shortened or extended for additional periods on the terms, provisions and conditions set forth herein or as otherwise mutually acceptable to the Corporation and the Employee.

3. Employment Compensation. The Corporation shall pay to the Employee during the term of employment specified in paragraph 2 hereof, as salary for his services, the amount of One Hundred Fifty Thousand Dollars ($150,000) per annum. Such employment compensation shall be payable as prescribed by the Corporation’s regular payroll system but in no event less often than in equal monthly installments. The employment compensation amount specified in this paragraph 3 may be adjusted by mutual consent of the Corporation and the Employee, and any such adjustment shall operate as an automatic amendment of said employment compensation amount.

4. Consulting. The Corporation acknowledges the valuable business asset represented by the experience and judgment of the Employee as it has evolved and continues to mature during the period of the Employee’s association with the Corporation. The Corporation desires to secure the continued availability of this business acumen as a corporate asset beyond the period of employment specified in paragraph 2. Accordingly, in order to preserve this asset to the Corporation, the Employee shall remain reasonably available to serve the Corporation as a consultant or advisor for a period of fifteen (15) years commencing on the date of termination of the Employee’s active and daily employment with the Corporation. During each such year of availability, Employee agrees to serve as a consultant or advisor to the Corporation for a period of up to forty-five (45) days upon request by the Corporation and subject to the conditions specified below. The performance of advisory and consulting services to and for the Corporation, as provided in this paragraph 4, shall be subject to the following conditions:

(a) The employee shall not be required to render consulting or advisory services during vacation periods or during periods of personal or family illness or other incapacity.

(b) To the extent such services are not reasonably required to be performed at a particular location, they may be performed at such place or places as the Employee may designate from time to time.

(c) The Employee shall be entitled to designate up to three one-month periods (which may or may not be consecutive) during which he shall not be required to render consulting or advisory services.

(d) The Employee shall be entitled to at least ten (10) business days’ notice prior to the commencement of any proposed consulting or advisory assignment.

(e) The Employee shall be subject to the same confidentiality requirements as a consultant or advisor as he was during the term of his employment.

5. Consulting Compensation. In consideration of his availability as a consultant or advisor to the Corporation during the period specified in paragraph 4, Employee shall receive the amount of Thirty-Seven Thousand Five Hundred Dollars ($37,500) per year (the “Consulting Retainer”). The annual Consulting Retainer shall constitute payment to Employee for his availability and up to forty-five (45) days of actual service to the Corporation as a consultant or advisor during any such year of availability. In the event the Corporation desires consulting or advisory services from Employee in addition to the aforementioned forty-five (45) days, such service and the compensation therefore shall be subject to the mutual agreement of the Corporation and the Employee. The Consulting Retainer shall be paid whether or not Employee is requested by the Corporation to provide consulting or advisory services and shall be payable in a manner consistent with the Corporation’s regular payroll system but in no event less often than in equal monthly installment. The amount of the Consulting Retainer payable under this Agreement shall be increased at the end of each calendar year commencing with the year 1986 and ending with the year preceding the last year during which consulting payments are made under this Agreement by a percentage of such amount equal to the lesser of (1) three percent (3%), or (2) the increase in the national Consumer Price Index (“CPI”) as published by the United States Government for such year. Adjustments shall be effective on January 1 based on the CPI for the prior year computed from December to December. For the purposes of this Agreement, the CPI referred to shall be all items shown on the U.S. city average for urban wage earners and clerical workers (including single workers), all items, groups, subgroups and special groups of items as promulgated by the Bureau of Labor Statistics of the U.S. Department of Labor. If the U.S. Department of Labor ceases to publish the above-described CPI, then such CPI as may be published by such Department most nearly approaching said discontinued CPI shall be used in making the above adjustments. If the Department discontinues any such CPI, then such CPI as may be published by another U.S. Government agency, as most nearly approximated the CPI first above referred to, shall govern, subject to the application of an appropriate conversion factor to be furnished by the governmental agency publishing the adopted CPI.

6. Normal Retirement Supplemental Income.

(a) The employee is eligible for Normal Retirement from active and daily employment with the Corporation at any time after: (1) the expiration of that portion of the initial employment term specified in paragraph 2 which ends on January 1, 1994, (2) he has completed ten (10) years of employment with the Corporation, and (3) he has been a party to this Agreement for five (5) years from the date set forth above. The Employee’s disability as defined in paragraph 8 shall not prevent the satisfaction of this condition. In such event, Employee shall be deemed to have satisfied the foregoing condition as of January 1, 1994.

Upon the Employee’s Normal Retirement from active and daily employment with the Corporation, the Corporation shall pay to the Employee supplemental income in an amount determined under paragraph 10 hereof for a period of fifteen (15) years. Such supplemental income shall be payable in monthly installments on the first business day of each calendar month and shall commence on the first business day of the first calendar month after the month of the Employee’s Normal Retirement from active and daily employment with the Corporation.

(b) If the Employee should die or become disabled after Normal Retirement but before receiving all 180 monthly payments hereunder, the Corporation shall continue to make monthly payments to the Employee in the case of disability, or to Employee’s surviving designated beneficiary or beneficiaries, as specified in Exhibit A Attached hereto. Such payments shall be in an amount equal to twice the monthly amount paid or payable as supplemental income pursuant to paragraph 10 and shall continue until the remaining monthly payments have been paid. If no beneficiaries have been designated, or if the designated beneficiaries have predeceased the Employee, or if the beneficiaries cannot be found, such payments shall be made to the Employee’s estate for the remaining payment periods. If the Employee’s designated beneficiaries survive the Employee but thereafter die before all remaining payments have been made, the Corporation shall continue to make the remaining monthly payments to the estate of the designated beneficiary last to die. In any event, the Corporation may at any time elect to substitute payment hereunder in the form of a lump-sum amount having a present value actuarially equivalent to the total remaining supplemental income payments or a paid-up annuity having a value which shall produce the remaining monthly payments under this Agreement.

7. Deferred Retirement Supplemental Income. If the Employee, with the approval of the Board of Directors of the Corporation, continues in active and daily employment with the Corporation after he becomes eligible for Normal Retirement, the amount of supplemental income specified in paragraph 10 hereof shall be increased by the amounts set forth in Exhibit B for each full year that receipt of such supplemental income is deferred and shall be paid commencing on the latter of the first business day of the first calendar month after the month in which the Employee actually retired from active and daily employment by the Corporation. Supplemental income under this paragraph 7 shall be paid in the same manner as specified in paragraph 6 hereof during the Employee’s lifetime and after his death.

8. Effect of Disability. The Employee’s employment with the Corporation shall be terminated if the Employee is prevented from performing his duties for a continuous period of three (3) months by reason of any illness, incapacity or

disability which may be medically determined in a manner to the reasonable satisfaction of the Board of Directors of the Corporation. Any such disability shall automatically defer any supplemental income payments under this Agreement until the Employee’s sixty-fifth (65^th) birthday unless Employee and the Corporation shall mutually agree otherwise.

9. Death Benefits Prior to Retirement. If the Employee should die while employed by the Corporation but prior to becoming entitled to supplemental income under paragraph 6 or 7 hereof, the Corporation shall pay a death benefit equal to twice the amount of supplemental income specified in paragraph 10 hereof. Such death benefit shall be paid every year for fifteen (15) years, under the same terms and conditions as specified in paragraph 6 hereof. Notwithstanding any other provision of this Agreement, no benefits shall be payable under this Agreement if the Employee’s death results from suicide, whether or not the Employee was sane or insane, within two (2) years after the Employee became a party to this Agreement.

10. Amount of Supplemental Income. The amount of supplemental income payable under this Agreement as of the date hereof shall be Thirty-Seven Thousand Five Hundred Dollars ($37,500) per year. The amount of supplemental income payable under this Agreement shall be increased at the end of each calendar year commencing with the year 1986 and ending with the year preceding the last year during which supplemental income payments are made under this Agreement by a percentage of such amount equal to the lesser of (1) three percent (3%), or (2) the increase in the CPI as published by the United States Government for such year. Adjustments shall be made in the manner described in paragraph 5.

11. Termination of Employment.

(a) If, at any time (except in the event of a Change in Control as described below) (1) the Employee wishes to terminate his employment with the Corporation, or (2) the Corporation wishes to terminate the Employee’s employment with the Corporation because of a determination by the Board of Directors of the Corporation that the Employee has failed to perform his duties in a reasonably satisfactory manner, then such party may so terminate the Employee’s employment with the Corporation by giving the other party six (6) months’ prior written notice of such termination. In the case of the Employee’s failure to perform his employment duties in a manner reasonably satisfactory to the Board of Directors of the Corporation, the date of termination of the Employee’s employment with the Corporation may be determined at the discretion of the Corporation. Upon the Employee’s termination of employment for cause by the Corporation under this paragraph 11, the Employee shall forfeit all rights to receive the Consulting Retainer payments and supplemental income hereunder unless, as to supplemental income only, at the time of such termination he has satisfied the requirements of paragraph 6 hereof and has not forfeited his rights hereunder pursuant to paragraphs 14 or 15 hereof.

b) The Employee’s employment with the Corporation shall not be deemed to have been terminated because of the Employee’s absence from active and daily employment by reason of a bona fide temporary illness or disability (not exceeding a period of ninety (90) days), authorized vacation, temporary leave of absence granted by

the Corporation for reasons of professional advancement, education, health or government service, or military leave for any period required to be treated as a leave of absence by virtue of any valid law or agreement.

c) Notwithstanding the foregoing, in the event of (i) a Change of Control (as defined below) of the PBSJ Corporation or of Post, Buckley, Schuh & Jernigan, Inc. (“PBSJ Inc.”) and (ii) the termination of the Employee’s employment by the Corporation or any successor thereto for any reason other than for Cause (as defined below), or the voluntary termination by the Employee of his employment hereunder for Good Reason (as defined below) at any time at least six months after the effective date of the Change in Control, all of the terms and conditions of this Agreement shall remain in full force and effect, and shall be binding upon the Corporation, except that the Employee shall be deemed to have satisfied each of the conditions to eligibility for Normal Retirement set forth in paragraph 6 (a) immediately prior to the effectiveness of any such Change in Control. In the event of a termination for Cause under this paragraph 11(c), the Corporation shall have no further obligation under this Agreement to make any payments to, or bestow any benefits on, the Employee from and after the date of said termination, other than payments or benefits accrued for him (including deferred retirement benefits) prior to the date of said termination.

For purposes of this paragraph 11(c), a “Change in Control” shall be deemed to have taken place if:

(i) any person (as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, but excluding the Corporation, any of its subsidiaries, The PBSJ Corporation Profit Sharing Trust and the PBSJ Corporation Employee Stock Ownership Plan and Trust), should acquire direct or indirect ownership of 80% or more of the voting power of the then outstanding securities of the PBSJ Corporation or PBSJ Inc. by any means whatsoever; or

(ii) the shareholders of the PBSJ Corporation or PBSJ Inc. should approve any one of the following transactions:

(x) the sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, the assets of the PBSJ Corporation or PBSJ Inc.; or

(y) any consolidation or merger of the PBSJ Corporation or PBSJ Inc. in which the PBSJ Corporation or PBSJ Inc., as the case may be, is not the surviving corporation, other than a merger of the PBSJ Corporation, or PBSJ Inc. in which the holders of the common stock of the PBSJ Corporation or PBSJ Inc. immediately prior to the merger have the same proportionate ownership of the surviving corporation immediately after the merger.

For purposes of this paragraph 11(c), Cause shall mean (i) fraud or misappropriation of corporate funds; or (ii) conviction of a felony involving moral turpitude and such conviction is no longer subject to direct appeal.

For purposes of this paragraph 11, “Good Reason” shall be deemed to exist under any of the following circumstances:

(i) the Employee has been assigned any duties inconsistent with his position, duties, responsibilities and status with the Corporation immediately prior to the effective date of the Change in Control (the “Effective Date”), or has been assigned reporting responsibilities, titles or offices of a lesser scope than those in effect immediately prior to the Effective Date, or he has been removed from, or not re-elected to, any of such positions, except in connection with the termination of his employment for Cause;

(ii) the Corporation has reduced the Employee’s base salary as in effect immediately prior to the Effective Date or has failed to give him annual salary increases consistent with performance review ratings as compared with other employees of the same or similar rank;

(iii) the Corporation has required the Employee to be based at any office or location other than that at which the Employee is based at the Effective Date, except for travel reasonably required in the performance of the Employee’s responsibilities;

(iv) the Corporation has failed to comply with any provision of this Agreement.

12. Prior Agreements. This Agreement supersedes and terminates in all respects that certain employment agreement executed by and between the Corporation and the Employee dated Ma 30, 1985, as amended.

13. Working Facilities and Expenses. During the employment term specified in paragraph 2 hereof, the Employee shall be furnished with an office, stenographic and administrative help, and such other facilities, services and assistance which shall be suitable to his position and adequate for the performance of his duties. In addition, during the employment term or any period of consulting or advisory service, the Corporation shall reimburse the Employee for all reasonable expenses incurred by him for entertainment, travel, promotion and similar items in connection with the performance of his duties as undertaken, assigned or required.

14. Reasons for Forfeiture. The Corporation shall stop payments to the Employee hereunder if the Employee is involved in fraud, or if the Corporation determines that the Employee has been grossly negligent or has been engaged in willful misconduct in the course of his employment. Nothing contained in this Agreement shall in any way be construed to limit or otherwise waive the legal or equitable rights or remedies of the Corporation to recoup monies paid hereunder to the Employee if the Corporation determines that it is entitled to such recoupment.

Competition and Confidentiality. If, following retirement pursuant to paragraph 6 or 7, and through the period until all payments have been made under this Agreement, the Employee competes with the Corporation, reveals to any third party any trade secrets or financial or other confidential information concerning the Corporation, does not perform required services pursuant to paragraph 4 hereof, or is convicted of a felony, any supplemental income thereafter payable hereunder shall be forfeited. As used in this Agreement, “compete” shall mean entering into, performing or engaging, directly or indirectly, in the rendering of engineering services or allied Professional services similar to those provided by the Corporation, including but not limited to consulting, planning and surveying, either as an individual for his own account, or as a partner or joint venturer, or as an employee or agent for any person or as an officer, director, or shareholder of any business entity or otherwise, within the State of Florida, or any state in which the Corporation has an office or offices.

Employee acknowledges that his services under this Agreement are of a special, unique, unusual, extraordinary, and intellectual character, and that a breach by Employee of this paragraph 15 could cause the Corporation irreparable injury and damage and would therefore cause a breach of this Agreement.

16. Insurance Benefits. As additional compensation to the employee for services performed, after the Employee’s retirement from active and daily employment with the Corporation, the Corporation shall continue to pay for and provide to the Employee and his wife major medical and hospitalization insurance benefits of equal coverage and substantially similar to those major medical and hospitalization insurance benefits paid for and provided to senior executives of the Corporation, provided, however, that such insurance shall not provide coverage or benefits substantially less valuable or protective now in effect for the Employee. Said insurance benefits shall be paid for and provided to the Employee and his wife for so long as either of them shall live. Notwithstanding the fact that said period of coverage extends beyond the period specified in paragraphs, 4, 6, and 7 of this Agreement, the Corporation and the Employee hereby agree that said lifetime insurance coverage is in the nature of supplemental income to the Employee, without any further or additional services from the Employee to the Corporation. The payment for and furnishing to the Employee of said lifetime insurance benefits by the Corporation is subject to and conditioned upon the Employee’s compliance with the terms and conditions of this Agreement.

17. Assignment. Neither the Employee nor any designated beneficiary, nor any other payee under this Agreement, shall have any power to transfer, assign, anticipate, hypothecate or otherwise encumber in advance any of the supplemental income payable hereunder, nor shall any supplemental income payable be subject to seizure for the payment of any debts or judgments of the Employee or any payee or be transferable by the Employee or any payee by operation of law in the event of such person’s bankruptcy, insolvency or otherwise.

18. Participation in Other Employee Benefit Plans. Any retirement or disability compensation payable under this Agreement shall not be deemed salary or other

compensation to the Employee for the purpose of computing benefits to which he may be entitled under any pension plan or other arrangement of the Corporation for the benefit of its employees. Nothing contained herein shall in any manner modify, impair or affect the existing or future right or interest of the Employee to receive any employee benefits to which he would otherwise be entitled, or as a participant in any future incentive profit-sharing or bonus plan, stock option plan or pension plan of the Corporation, applicable generally to salaried employees. The rights and interests of the Employee to any employee benefits or as a participant or beneficiary in or under any or all such plans shall continue in full force and effect unimpaired, and the Employee shall have the right at any time hereafter to become a participant or beneficiary under or pursuant to any and all such plans.

19. Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration conducted by and in accordance with the rules then in existence of the American Arbitration Association. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

20. Life Insurance and Funding.

(a) The Corporation, in its sole discretion, may apply for and procure as owner and for its own benefit insurance on the life of the Employee in such amounts and in such forms as the Corporation may choose. The Employee shall have no interest whatsoever in any such policy or policies, but, at the request of the Corporation, shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to which the Corporation has applied for insurance.

(b) The supplemental income provided here in shall constitute an unfunded promise of the Corporation, and the benefits and rights of the Employee or his beneficiary or estate to supplemental income under this Agreement shall be solely those of an unsecured creditor of the Corporation. Any insurance policy or other assets acquired or held by the Corporation in connection with the liabilities assumed by its pursuant to this Agreement shall not be deemed to be held under any trust for the benefit of the Employee of his estate or a beneficiary thereof or to be security for the performance of the obligations of the Corporation but shall be and remain a general, unpledged and unrestricted asset of the Corporation.

21. Professional Liability Coverage. The Corporation shall provide coverage to and for the Employee, as a named insured, under any Architects/Engineers Professional Liability Insurance policy maintained by the Corporation. Said coverage provided to the Employee shall be coextensive with coverage to the Corporation both as to amount and description of services covered. The term and length of coverage under said policy shall extend to liability as a result of services performed by the Employee pursuant to this Agreement.

22. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Florida (without regard to the conflicts of laws thereof). All lawsuits and other proceedings related to this Agreement or the transactions herein described shall be commenced and held in Dade County, Florida and the Employee waives all rights to object to the laying of venue in such jurisdiction. In the

event of any litigation or arbitration arising by virtue of this Agreement, the prevailing party shall be entitled to an award of all court costs, litigation and arbitration expenses and attorneys’ fees at both trial and appellate levels.

23. Notices. Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been delivered and given for all purposes, if delivered personally to the party or to an officer of the party to whom the same is directed, or, whether or not the same is actually received, if sent by registered or certified mail, postage and charges prepaid, properly addressed to the addressee’s last known address.

24. Claims Procedure. In the event Employee (or Beneficiary) does not receive a distribution of benefits to which he or she is entitled, he or she may present a claim to the Board of Directors of the Corporation. The claim for benefits must be in writing and addressed to the Corporation. If the claim for benefits is denied, the Corporation shall notify the Employee (or Beneficiary) of the basis for the denial, any additional material or information necessary for the Employee (or Beneficiary) to perfect his or her claim, and the steps which the Employee (or Beneficiary) must take to have the claim for benefits reviewed.

If a claim for benefits has been denied, Employee (or Beneficiary) may file a written request for a review of his or her claim by the Board of Directors. The decision of the Board of Directors shall be made within sixty (60) days after receipt of a request for review and shall be communicated in writing to the claimant. Such written notice shall set forth the basis for the Board of Directors’ decision shall be rendered not later than one hundred twenty (120) days after receipt of a request for a review.

25. Integrated Agreement. This Agreement constitutes the entire understanding and agreement among the parties hereto with respect to the subject matter hereof, and there are no agreements, understandings, restrictions, representations or warranties among the parties other than those set forth herein.

26. No Oral Modification. No modification or waiver of this Agreement or any part hereof shall be valid or effective unless in writing and signed by the party or parties sought to be charged therewith. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any breach or condition of this Agreement or of any subsequent breach or condition, whether of like or different nature.

27. Binding Effect. This Agreement is binding upon and shall inure to the benefit of the Corporation, its representatives, successors and assigns, and to the Employee, heirs and personal representatives and his designated beneficiaries. The Corporation and the Employee agree to execute any instruments and to perform any acts which are or may become necessary to effectuate this Agreement and to fulfill its terms.

28. Paragraph Captions. Paragraph and other captions contained in this Agreement are for reference purposes only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.

IN WITNESS WHEREOF, the respective Corporation has caused this Agreement to be executed by its duly authorized officer and the Employee has hereunto set his hand and seal as of the date first above written.

			POST, BUCKLEY, SCHUH & JERNIGAN, INC.
ATTEST:
By		By
ATTEST:		Its
By		By
	Secretary
		Its
WITNESS:
		EMPLOYEE:
mw/k/glass.002
15.	1/12/88

EX-10.22

Exhibit 10.22

AGREEMENT

This Agreement is made this 1st day of April, 2005 by and among The PBSJ Corporation (“PBSJ”), a corporation organized under the laws of the state of Florida, and Rosario Licata (“Licata”), an individual.

Recitals

WHEREAS, on March 31, 2005, Licata voluntarily tendered her resignation as Accounting Manager, effective immediately upon receipt by PBSJ; and

WHEREAS, PBSJ has accepted the resignation of Licata as Accounting Manager, effective March 31, 2005; and

WHEREAS, Licata is a participant of The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust (the “Plan”); and

WHEREAS, each party to this Agreement enters into this Agreement freely and voluntarily, and either upon the advice of counsel or after having been afforded ample opportunity to seek the advice of counsel;

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1. Licata hereby assigns, conveys and transfers to PBSJ any and all interests he now or hereafter has in the Plan, or any other benefit plan established by PBSJ, and Licata agrees that, immediately upon delivery of any check(s) or other payments representing any distribution of funds from the Plan, or any other benefit plan established by PBSJ, to Licata, Licata will immediately and unconditionally endorse such check(s) or transfer such amounts to PBSJ, without restriction.

2. Licata represents and warrants to PBSJ that she does not own, directly or indirectly, any shares of the capital stock of PBSJ.

3. In the event that the total value of Licata’s total distribution(s) from the PBSJ 40l(k) profit sharing plan exceeds the total amount of misappropriated funds taken by and/or used for the benefit of Licata, as determined by an audit to be conducted by the PBSJ Audit Committee, the difference shall be refunded to Licata;

4. In the event that the total value of Licata’s total distribution(s) from the PBSJ 40l(k) profit sharing plan is less than the total amount of misappropriated funds taken by and/or used for the benefit of Licata, as determined by an audit to be conducted by the PBSJ Audit Committee, the difference shall be paid by Licata to PBSJ in a manner and at a time to be determined solely in the discretion of PBSJ;

5. Licata agrees that, in regard to the calculations contemplated by paragraphs 3 and 4 above, the determination of the PBSJ Audit Committee shall be final and binding on her.

6. Licata agrees to relinquish any and all ownership and equity she has in the real properties located at: 2751 South Ocean Drive, N404, Hollywood, Florida 33019, and 4000 Collins Avenue, At. 201, Miami Beach, Florida, to PBSJ. The parties agree that Licata shall have the right to keep the real property located at 19010 SW 188^th Street, Miami, Florida 33187.

Licata hereby irrevocably makes, constitutes and appoints John Zumwalt, signing singly, with full power of substitution (the “Attorney”), to be Licata’s true and lawful Attorney-In-Fact for his, and in his name, place and stead to do each and all of the following acts on behalf of Licata: (i) to endorse such checks and transfer such amounts referenced in paragraph 1. above, and (ii) to appoint, in writing, any person or persons, either natural or juridical, as additional Attorneys-In-Fact for the undersigned with the powers so designated in such appointment. Licata hereby ratifies and confirms all that said Attorney shall lawfully do or cause to be done by virtue hereof; and Licata hereby waives any and all notice of any such actions or transactions and furthermore agrees and covenants with any and all persons, partnerships, corporations or entities that Licata will be bound by actions or transactions entered into in reliance on this Power of Attorney, even if such actions or transactions shall have been performed or executed after the revocation of this Power of Attorney unless such revocation shall have been effectively communicated in writing to the Attorney. The undersigned agrees to hold harmless the Attorney for all actions taken by Attorney pursuant to this Power of Attorney other than for Attorney’s gross negligence or intentional misconduct. The parties acknowledge that the Power of Attorney provided for here is irrevocable and coupled with an interest.

Licata hereby resigns from any and all positions that she holds with PBSJ or any of its affiliates, effective as of March 31, 2005.

Licata agrees to fully cooperate with PBSJ in order to carry out and accomplish the full intent and purposes of this Agreement.

Nothing in this Agreement shall be construed to constitute any party to this Agreement a partner, joint venturer or agent of any other party to this Agreement. No party to this Agreement shall have, or represent itself as having, any authority to bind another party to this Agreement in any respect.

No provision of this Agreement shall be interpreted or construed against any party because that party or its legal representative drafted it.

All disputes between the parties shall be governed by — and this Agreement shall be construed in accordance with — the laws of the state of Florida, without regard to its principles of conflicts of laws.

No provision of this Agreement may be changed, waived or amended except in a writing signed by the parties. No failure or delay in exercising any right or remedy shall operate as a waiver, nor shall any single or partial exercise of any right or remedy preclude any other exercise of such right or remedy. A waiver in writing of any default shall apply only to the specific default identified in the waiver and shall not extend to any other defaults, whether or not of a similar nature.

This Agreement contains the entire understanding of the parties regarding Licata’s 401(k) profit sharing account. It supersedes all previous agreements and understandings between the parties regarding those matters. Each party specifically acknowledges and agrees that it has neither made nor relied upon any representation in entering this Agreement other than those specifically set forth above.

NOW THEREFORE, the undersigned have executed this Agreement as of the day and year first written above.

THE PBSJ CORPORATION
By:	/s/ John Zumwalt, III
Name: Title:

/s/ Rosario Licata

Rosario Licata

EX-10.23

Exhibit 10.23

Execution Copy

AGREEMENT

This Agreement (the “Agreement”) is made this 22^nd day of April, 2005, by and among The PBSJ Corporation (“PBSJ”), a Florida corporation, William Scott DeLoach (“WSD”), an individual, and Dani Blair DeLoach (“DBD”), an individual (collectively “the DeLoaches”).

Recitals

A. Each party to this Agreement enters into this Agreement freely and voluntarily, and upon the advice of counsel.

B. WSD and DBD have acquired numerous assets of real and personal property which are now held by them or in their name individually or jointly, or in any other capacity, and in various trusts, partnerships, corporations and other entities, or by their children (the “Covered Persons”).

C. The DeLoaches desire to transfer possession and ownership of the Assets (as defined below) to PBSJ pursuant to and as more particularly described in this Agreement.

D. The DeLoaches acknowledge and agree that PBSJ has an equitable interest and other ownership interests in the Assets.

E. The DeLoaches acknowledge and agree that they will receive valuable benefits under the Agreement, including partial satisfaction of WSD’s restitutionary obligation to PBSJ to the extent of the realizable value of the Assets transferred to PBSJ under this Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1. Incorporation of Recitals. The foregoing Recitals are hereby incorporated into and made part of this Agreement.

2. Transfer of Ownership. The DeLoaches agree to and hereby do assign, convey and transfer to PBSJ (or its designee) any and all of the right, title, interest, claim and demand which any of the Covered Persons hold individually or jointly, directly or indirectly, in any and all assets, real and personal properties, and rights, of every kind and description and wherever located, as they exist on the date of this Agreement, other than the Retained Assets (as such term is defined below), (collectively, the “Assets”), including without limitation:

(a) Real Property. The real property itemized below.

(i) 3916 Island Estates Place, Aventura, (Miami-Dade County) Florida 33160, a single family residential home with the legal description as follows: Lot 3, Block 2 (f/k/a Lot 9, Block 1) Island Estates according to the Plat thereof recorded in Plat Book 155, Page 3, which is a replat of a part of Tract “A”, Two Islands in Dumfoundling Bay, according to the Plat thereof recorded in Plat Book 141, Page 66 both of the Public Records of Miami-Dade County, Florida. Folio No.: 28-2210-085-0090.

(ii) 19111 Collins Avenue, Unit 1805, Sunny Isles Beach, (Miami-Dade County) Florida, a condominium unit located at 1911 Collins Avenue, Sunny Isles, FL with the legal description as follows: Condominium Unit No. 1805 in OCEAN TWO CONDOMINIUM, according to the Declaration thereof, recorded June 26, 2001 under Clerk’s File No. 01R-331639 in Official Records Book 19740, at Page 2800 of the Public Records of Miami-Dade County, Florida, as amended and/or supplemented from time to time. Folio No.: 31-2202-042-2150.

(iii) 28 Baker Road, Key Largo (Monroe County), Florida, property with the legal description as follows: Lot 28, in Block 3, HARBOR COURSE SECTION FOUR, OCEAN REEF PLAT NO. 13, according to the Plat thereof, as recorded in Plat Book 7, at Page 8 of the Public Records of Monroe County, Florida.

(iv) 25 Angelfish Cay Drive, Key Largo (Monroe County), Florida, property with the legal description as follows: Lot 25, Angelfish Cay, OCEAN REEF PLAT NO. 5, according to the Plat thereof, as recorded in Plat Book 6, at Page 17 of the Public Records of Monroe County, Florida.

(b) Personal Property. All personal property including, but not limited to, jewelry, artwork, vehicles, personal watercraft, boats, and furniture, fixtures and other personal property located on the real property being transferred to PBSJ, and those items identified on Attachment 1 to this Agreement.

(c) Cash and Securities. All cash on hand or in bank deposits and all certificates of deposit and all securities or other financial instruments and bank accounts or other deposit accounts, and all ownership interest in any business or entity including without limitation any corporation, limited liability company.

(d) Insurance Policies. Rights under any insurance policies and annuities to which any Covered Person is named as a beneficiary and all equity in any such policies.

(e) Tax, Insurance and Other Escrows. Rights under any tax, insurance, or other escrows relating to the Assets or any similar deposits.

(f) Property Not Otherwise Described. Except as otherwise provided in Paragraph 3 below, all other assets, properties and rights of every kind and nature owned or held by any of the Covered Persons individually or together with any other person or entity, or in which any of them has an interest, known or unknown, fixed, unfixed, choate or inchoate, accrued, absolute, contingent, or otherwise, whether or not specifically referred to in this Agreement (“Other Assets”).

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3. Retained Assets. Anything in Paragraph 2 to the contrary notwithstanding, there shall be excluded from the assets, properties, and rights to be transferred to the PBSJ under this Agreement the following items (collectively, the “Retained Assets”):

(i) 1000 Island Boulevard, Unit 2912, Aventura (Miami-Dade Co.), FL. A condominium with the legal description as follows: Condominium Unit No. 2912, according to the Declarations thereof , recorded on November 15, 1990 under Clerk’s File No. 1990 R 417344, in Official Records Book 14786, on Page 752 of the Public Records of Miami-Dade County, Florida, as amended and/or supplemented from time to time. Folio No. 28-2210-075-3000.

(ii) One of the Lexus automobiles currently titled in the name of WSD and to be agreed upon by the parties.

(iii) The personal property listed on Attachment 2 to this Agreement. Attachment 2 will include the personal effects of WSD and DBD and their children (including certain DBD family heirlooms) and will be agreed upon by the parties to this Agreement as soon as possible following the date of this Agreement.

(iv) That certain Term Life Insurance Policy obtained through the AICPA Life Insurance Trust renewable October 1 of each year with a death benefit of $2 million, including any benefits payable thereunder after the date of this Agreement; provided however that any rebate made after the date of this Agreement of premiums paid with respect to such insurance policy prior to the date of this Agreement shall not be deemed a Retained Asset.

4. No Assumption of Liabilities. PBSJ shall not assume by virtue of this Agreement or the transactions contemplated hereby, and shall have no liability for, any debts, liabilities or obligations of any of the Covered Persons of any kind, character or description whatsoever regardless of whether any such debt, liability or obligation is disclosed in this Agreement or in any Attachment hereto.

5. Acknowledgements.

(a) Each of the DeLoaches acknowledges and agrees that PBSJ will not make any further monthly payments to WSD in consideration for his cooperation and that WSD’s cooperation obligations shall continue under this Agreement.

(b) The parties acknowledge that PBSJ has directed the real property in Paragraph 2(a) to be titled in the name of Seminole Development II, Inc.

6. Evacuation and Condition of Property. The DeLoaches will promptly upon request of PBSJ remove all of the Retained Assets from the real property listed in Paragraph 2(a) and vacate such premises, and will at all times provide PBSJ unfettered access to all of the Assets. The DeLoaches warrant that each of the Assets to be transferred under this Agreement will be securely held for PBSJ in its current condition until such time as the Assets have been transferred to PBSJ.

7. Cooperation. WSD agrees to make himself available to PBSJ as frequently as necessary and as reasonably requested by PBSJ in order to assist PBSJ in the investigation of the accounting irregularities and misappropriation of funds at PBSJ and will cooperate with PBSJ in such investigation and in seeking the recovery of PBSJ funds.

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8. Waiver of Rights. The DeLoaches hereby waive any and all rights, including any rights of special equity or distribution of the Assets that in any way varies from the terms described herein and any and all security interests or liens that any of the Covered Persons may have on or in the Assets. The DeLoaches warrant that the Assets listed in Paragraph 2 are an accurate and complete representation of their holdings of real property (except for the real property included in the Retained Assets). The DeLoaches hereby agree that in the event the current titling of the Assets do not accurately reflect the ownership of such Assets, the DeLoaches will take all actions reasonably necessary to have all Assets, whether titled individually, jointly, with another party, or held in the name of a partnership, corporation, trust or entity in which they have an individual or joint interest, transferred to PBSJ immediately.

9. No Transfers. The DeLoaches in the exercise and control over all Assets transferred hereby shall not effect any transfer of the Assets that will adversely affect other rights PBSJ may receive by virtue of this Agreement.

10. Power of Attorney. Each of WSD and DBD hereby irrevocably make, constitute and appoint John Zumwalt and Bill Pruitt, and each of them, signing singly, with full power of substitution (the “Attorney”) to be each of their true and lawful Attorney-In-Fact for him or her, and in his or her name, place and stead to do each and all of the following acts on behalf of WSD and DBD, individually, with respect to the Assets:

(i) to negotiate, enter into and execute all documents or instruments necessary or appropriate to effectuate and/or complete the financing, refinancing or sale of real or personal property;

(ii) to execute all documents or instruments necessary or appropriate to take such other actions referenced herein,

(iii) to appoint, in writing, any person or persons, either natural or juridical, as additional Attorneys-In-Fact for the undersigned with the powers so designated in such appointment.

Each of William Scott DeLoach and Dani Blair DeLoach hereby individually and on behalf of each of the Covered Persons ratifies and confirms all that said Attorney shall lawfully do or cause to be done by virtue hereof; and hereby waives any and all notice of any such actions or transactions and furthermore agrees and covenants with any and all persons, partnerships, corporations, or entities that William Scott DeLoach or Dani Blair DeLoach will be bound by actions or transactions entered into in reliance on this Power of Attorney, even if such actions or transactions shall have been performed or executed a purported revocation of this Power of Attorney. The undersigned agree to hold harmless the Attorney for all actions taken by Attorney pursuant to this Power of Attorney other than for Attorney’s gross negligence or intentional misconduct. The parties acknowledge that the Power of Attorney provided for here is irrevocable and coupled with an interest.

11. Further Assurances.

(a) Immediately upon execution of this document each party shall execute, acknowledge and deliver all quit claim and other deeds necessary to transfer the real property described in Paragraph 2(a). Additionally, each party shall execute a bill of sale to PBSJ for all Assets transferred.

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(b) The Covered Persons shall execute any form required by any lender to terminate any open line of credit such Covered Person has with such lender. Without limiting the foregoing, the DeLoaches agree not to make any additional draws or advances against any line of credit or borrowing secured by the Assets. Each party shall thereafter execute, acknowledge and deliver all documents or instruments reasonably required to carry out the provisions of this Agreement as may be necessary from time to time.

12. Partial Restitution. The transfer of such Assets referenced in Paragraph 2 above, and the transfer, assignment and delivery of the indicia of ownership of the Assets shall be in partial satisfaction of WSD’s restitutionary obligation to PBSJ to the extent of the realizable value of the Assets transferred to PBSJ under this Agreement.

13. Cooperation and Assistance. WSD Further agrees that he will cooperate and work with and at the request of PBSJ to recover all amounts that may be owed to PBSJ as a result of the misappropriation of its assets and any and all properties obtained by any person or entity with any misappropriated PBSJ funds, regardless of whether such misappropriation was effected by a third party or without WSD’s knowledge, assistance or acquiescence.

14. Not Settlement and Release. This Agreement is not intended by the parties to be a settlement or release of claims PBSJ may have against any Covered Party; provided however, that PBSJ agrees not to assert any claim to an ownership interest in the Retained Assets.

15. No Preclusion. Nothing herein shall preclude either party from bringing an action to enforce the provisions of this Agreement.

16. Interpretation of Agreement. No provision of this Agreement shall be interpreted or construed against any party because that party or its legal representative drafted it.

17. Accurate Disclosure of Assets. The DeLoaches hereby represent and warrant that to the best of their knowledge they have provided PBSJ with a true and accurate disclosure of their financial circumstances, including, but not limited to, all holdings of real and personal property, whether held individually, jointly, by any of their minor children, or by virtue of an interest in a trust, partnership, corporation or entity. Each of WSD and DBD further represents and warrants that he and she, respectively, have not transferred, legally or fraudulently, any property of any kind, whether real or personal to any other individual, trust, partnership, corporation or entity for the purpose of avoiding transfer of ownership to PBSJ.

18. Independent Advice of Counsel. Each party represents that they have had the opportunity and right to independent legal advice by an attorney of their selection in the negotiation of this Agreement. Each party fully understands the facts as set forth in this Agreement and has signed this Agreement freely and voluntarily intending to be bound by it. Each acknowledges that there has been no duress, coercion, or undue pressure to sign this Agreement. Each party acknowledges that they have relied upon the advice of only their own respective legal counsel. Each party represents that he or she has in no way relied upon any communications, direct or indirect, from the other party’s legal representatives, and each represents there have been no communications from the other party’s legal representatives, directly or indirectly, which have in any way induced the party to enter into this Agreement.

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19. Jurisdiction, Venue and Service of Process. The parties hereby agree irrevocably and unconditionally: (a) to submit to any legal action or proceeding to enforce, ratify, or interpret the provisions of this Agreement to the exclusive jurisdiction of the state or federal courts in the State of Florida; and (b) waive any objection that they may now or hereafter have to the venue of Miami-Dade County for any such action or proceeding or any objection that such action or proceeding was brought in an inconvenient forum. Each of the DeLoaches expressly consents and accepts service of process through their attorney, Jane Moscowitz, at 1111 Brickell Avenue, Suite 2050, Miami, FL 33131.

20. Attorney’s Fees, Costs and Suit Money. Each party shall pay his or her respective attorney’s fees associated with the preparation and negotiation of this Agreement. Further, a party who fails to comply with any provision or obligation contained in this Agreement shall fully pay the other party’s attorneys’ fees, costs and other expenses reasonably incurred in enforcing the Agreement and resulting from the noncompliance.

21. Modification or Revocation. No provision of this Agreement may be changed, waived or amended except in a writing signed by the parties. No failure to delay in exercising any right or remedy shall operate as a waiver, nor shall any single or partial exercise of any right or remedy preclude any other exercise of such right or remedy. A waiver in writing of any default shall apply only to the specific default identified in the waiver and shall not extend to any other defaults, whether or not of a similar nature.

22. No-Third Party Beneficiaries. This Agreement is not intended to confer upon any other person any rights or remedies hereunder.

23. Entire Agreement. This Agreement and all exhibits, schedules and attachments hereto contain the entire understanding of the parties regarding the Assets. It supersedes all previous agreements and understandings between the parties regarding those matters, other than the Agreement dated March 28, 2005 between PBSJ and WSD, to which DBD hereby consents. Each party specifically acknowledges and agrees that it has neither made nor relied upon any representation in entering this Agreement other than those specifically set forth above.

24. Severability. If any portion of this Agreement is held illegal, unenforceable, void or voidable by any Court, each of the remaining terms hereof will nevertheless remain in full force and effect of a separate contract. In that event, this Agreement is to be deemed modified and amended to the extent necessary to render it valid and enforceable.

25. Incompetence. Each of the parties agrees that, in the event that a party is adjudicated incompetent, this Agreement shall continue in full force and effect, and the rights and obligations hereunder of the party adjudicated incompetent shall inure to and become the responsibility of the duly appointed guardian of the property of such party.

26. Successors and/or Assigns. This Agreement shall be binding upon the heirs, successors and assigns and legal representatives of the parties hereto, as if in each and every case they were expressly named.

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27. Effect and Failure to Enforce. The failure of a party to insist on strict performance of any provision of this Agreement shall not act as a waiver of any other subsequent breach.

28. Governing Law. This Agreement shall be governed by the laws of the State of Florida.

29. Headings and Captions. The headings and captions contained in this Agreement are for purposes of reference only and shall not affect the meaning or interpretation of the terms and provisions of this Agreement.

30. Counterparts. This Agreement may be executed in two or more counterparts (including facsimile versions), each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument.

[Remainder of this page intentionally left blank.]

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NOW THEREFORE, the undersigned have executed this Agreement as of the day and year first written above.

THE PBSJ CORPORATION
By:	/s/ John B. Zumwalt, III
Name:	John B. Zumwalt, III
Title:	Chairman and CEO

STATE OF FLORIDA

COUNTY OF MIAMI-DADE

The foregoing instrument was subscribed and sworn to before me on this 22 day of April, 2005, by John B. Zumwalt, III who is personally known to me or who produced FL:DL as identification.

	/s/ Stefani R. Dailey
[SEAL]	NOTARY PUBLIC
	Stefani R. Dailey
	Name of Notary Printed
	My Commission Expires: January 22, 2007
	My Commission Number is: DD 166208
/s/ William Scott DeLoach
William Scott DeLoach

STATE OF FLORIDA

COUNTY OF MIAMI-DADE

The foregoing instrument was subscribed and sworn to before me on this              day of April, 2005, by William Scott DeLoach, who is personally known to me or who produced                                                                                   as identification.

	/s/ Stefani R. Dailey
[SEAL]	NOTARY PUBLIC
	Stefani R. Dailey
	Name of Notary Printed
	My Commission Expires: January 22, 2007
	My Commission Number is: DD 166208

8

NOW THEREFORE, the undersigned have executed this Agreement as of the day and year first written above.

THE PBSJ CORPORATION

By:

Name:

Title:

STATE OF FLORIDA

COUNTY OF MIAMI-DADE

The foregoing instrument was subscribed and sworn to before me on this 22 day of April, 2005, by William Scott DeLoach who is personally known to me or who produced                                                                                   as identification.

	/s/ Darlene Carrera
[SEAL]	NOTARY PUBLIC
	Darlene Carrera
	Name of Notary Printed
	My Commission Expires: 11-29-05
	My Commission Number is: DD 075275
/s/ William Scott DeLoach
William Scott DeLoach

STATE OF FLORIDA

COUNTY OF MIAMI-DADE

The foregoing instrument was subscribed and sworn to before me on this 22 day of April, 2005, by William Scott DeLoach. who is personally known to me or who produced as identification.

	/s/ Darlene Carrera
[SEAL]	NOTARY PUBLIC
	Darlene Carrera
	Name of Notary Printed
	My Commission Expires: 11-29-05
	My Commission Number is: DD 095275

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/s/ Dani Blair DeLoach

Dani Blair DeLoach

STATE OF FLORIDA

COUNTY OF MIAMI-DADE

The foregoing instrument was subscribed and sworn to before me on this 22 day of April. 2005, by William Scott DeLoach, who is personally known to me or who produced                                                                                   as identification.

	/s/ Darlene Carrera
[SEAL]	NOTARY PUBLIC

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EX-10.24

Exhibit 10.24

AGREEMENT

This Agreement is made this 23rd day of November, 2005 by and among The PBSJ Corporation (“PBSJ”), a corporation organized under the laws of the state of Florida, and Maria Marietta Garcia (“Garcia”), an individual.

Recitals

WHEREAS, Garcia is a participant of The PBSJ Employee Profit Sharing and Stock Ownership Plan and Trust (the “Plan”); and

WHEREAS, Garcia is the direct or indirect beneficial owner of certain shares of the capital stock of PBSJ; and

WHEREAS, each party to this Agreement enters into this Agreement freely and voluntarily, and upon the advice of counsel;

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1. Garcia hereby assigns, conveys and transfers to PBSJ any and all interests she now or hereafter has in the Plan, or any other benefit plan established by PBSJ, and Garcia agrees that, immediately upon delivery of any check(s) or other payments representing any distribution of funds from the Plan, or any other benefit plan established by PBSJ, to Garcia, Garcia will immediately and unconditionally endorse such check(s) or transfer such amounts to PBSJ, without restriction.

2. Garcia hereby irrevocably transfers, assigns and delivers to PBSJ all right, title and interest of whatever nature she has or may have, now or at any time in the future, directly or indirectly, in any and all shares of the capital stock of PBSJ. Garcia agrees to execute all stock powers and other instruments and to take all such other actions as are necessary or appropriate to carry out the purposes of this paragraph.

3. Garcia hereby irrevocably makes, constitutes and appoints John Zumwalt, signing singly, with full power of substitution (the “Attorney”), to be Garcia’s true and lawful Attorney-In-Fact for his, and in his name, place and stead to do each and all of the following acts on behalf of Garcia: (i) to endorse such checks and transfer such amounts referenced in paragraph 1, above, (ii) to execute such stock powers or other instruments or to take such other actions referenced in paragraph 2. above, (iii) to appoint, in writing, any person or persons, either natural or juridical, as additional Attorneys-In-Fact for the undersigned with the powers so designated in such appointment. Garcia hereby ratifies and confirms all that said Attorney shall lawfully do or cause to be done by virtue hereof; and Garcia hereby waives any and all notice of any such actions or transactions and furthermore agrees and covenants with any and all persons, partnerships, corporations or entities that Garcia will be bound by actions or transactions entered into in

reliance on this Power of Attorney, even if such actions or transactions shall have been performed or executed after the revocation of this Power of Attorney unless such revocation shall have been effectively communicated in writing to the Attorney. The undersigned agrees to hold harmless the Attorney for all actions taken by Attorney pursuant to this Power of Attorney other than for Attorney’s gross negligence or intentional misconduct. The parties acknowledge that the Power of Attorney provided for here is irrevocable and coupled with an interest.

4. The endorsement of such checks and the transfer of such amounts referenced in paragraph 1 above, and the transfer, assignment and delivery of the shares of the capital stock of PBSJ referenced in paragraph 2 above shall be in partial restitution for any liability Garcia has or may have to PBSJ.

5. Within ten business days of the execution of this agreement, PBSJ shall pay Garcia the sum of $50,000,

Nothing in this Agreement shall be construed to constitute any party to this Agreement a partner, joint venturer or agent of any other party to this Agreement. No party to this Agreement shall have, or represent itself as having, any authority to bind another party to this Agreement in any respect.

No provision of this Agreement shall be interpreted or construed against any party because that party or its legal representative drafted it.

All disputes between the parties shall be governed by — and this Agreement shall be construed in accordance with—the laws of the state of Florida, without regard to its principles of conflicts of laws.

No provision of this Agreement may be changed, waived or amended except in a writing signed by the parties. No failure or delay in exercising any right or remedy shall operate as a waiver, nor shall any single or partial exercise of any right or remedy preclude any other exercise of such right or remedy. A waiver in writing of any default shall apply only to the specific default identified in the waiver and shall not extend to any other defaults, whether or not of a similar nature.

This Agreement contains the entire understanding of the parties regarding Garcia’s 401(k) profit sharing account and Garcia’s shares of the capital stock of PBSJ. It supersedes all previous agreements and understandings between the parties regarding those matters. Each party specifically acknowledges and agrees that it has neither made nor relied upon any representation in entering this Agreement other than those specifically set forth above.

NOW THEREFORE, the undersigned have executed this Agreement as of the day and year first written above.

THE PBSJ CORPORATION
By:	/s/ John B. Zumwalt, III
Name:	John B. Zumwalt, III
Title:	Chairman

/s/ Maria Marietta Garcia

Maria Marietta Garcia

EX-10.25

Exhibit 10.25

NON-NEGOTIABLE PROMISSORY NOTE

US $91,800 As of February 23, 2006

FOR VALUE RECEIVED, the undersigned, PBSJ Corporation, a Florida corporation (“Maker”), hereby promises to pay to Kathryn J. Wilson (“Payee”), at such place as Payee shall designate in writing, in lawful money of the United States of America, the principal sum of Ninety-one thousand eight hundred and no/100 Dollars (US $91,800), together with interest thereon, or on so much thereof as is from time to time outstanding, at the rates hereinafter set forth below, the principal sum and interest being payable as set forth below.

Section I. Rate of Interest

From and after the date hereof through December 30, 2006, interest shall accrue on the outstanding principal balance hereof at 7.5% per annum, which is the prime rate of Maker’s primary bank lender (the “Prime Rate”) as of the date hereof. On each December 31^st following the date hereof through and including December 31, 2010, the interest rate hereunder shall be reset to the Prime Rate as of the date thereof, such that from such December 31^st through the next succeeding December 30^th, interest shall accrue on the outstanding principal balance hereof at such Prime Rate.

Section II. Payment of Principal and Interest

Subject to Sections III, IV and V, on the 1st day of each month commencing March 1, 2006 and ending January 1, 2011, Maker shall pay to Payee $1 of principal and all interest accrued but not paid prior to such date. On February 28, 2011, Maker shall pay to Payee the remaining principal balance hereof then outstanding and not subject to a claim of set-off by Maker and all interest accrued but not paid prior to such date.

Section III. Prepayments

Maker shall have the right to prepay the indebtedness evidenced by this Note, in full or in part, at any time, without penalty, fee or charge.

Section IV. Events of Default

The occurrence of any of the following events or conditions shall constitute an “Event of Default” hereunder:

(a) Except as set forth in Section V, Maker shall fail to make any payment of principal or interest under this Note when due, and such failure shall have continued for 30 days after written notice from Payee to Maker;

(b) Maker shall: (i) file a voluntary petition or assignment in bankruptcy or a voluntary petition or assignment or answer seeking liquidation, reorganization, arrangement, readjustment of Maker’s debts, or any other relief under 11 U.S.C. §§ 101 et. seq. as the same may be amended (the “Bankruptcy Code”), or under any other act or law pertaining to insolvency or debtor relief, whether state, federal, or foreign, now or hereafter existing; (ii) enter into any agreement indicating consent to, approval of, or acquiescence in, any such petition or proceeding; (iii) apply for or permit the appointment, by consent or acquiescence, of a receiver, custodian or trustee of all or a substantial part of Maker’s property; (iv) make an assignment for the benefit of creditors; (v) be unable or shall fail to pay Maker’s debts generally as such debts become due, or (vi) admit in writing Maker’s inability or failure to pay Maker’s debts generally as such debts become due; or

(c) There occurs (i) a filing or issuance against Maker of an involuntary petition in bankruptcy or seeking liquidation, reorganization, arrangement, readjustment of Maker’s debts or any other relief under the Bankruptcy Code, or under any other act or law pertaining to insolvency or debtor relief, whether state, federal or foreign, now or hereafter existing; (ii) the involuntary appointment of a receiver, liquidator, custodian or trustee of Maker or for all or a substantial part of Maker’s property; or (iii) the issuance of a warrant of attachment, execution or similar process against all or any substantial part of the property of Maker and any of such (i) – (iii) shall not have been discharged (or provision shall not have been made for such discharge), or stay of execution thereof shall not have been procured, within ninety (90) days from the date of entry thereof.

Upon any Event of Default, the total outstanding principal and all interest payable hereunder shall become immediately due and payable.

Section V. Set-Off

Upon notice to Payee specifying in reasonable detail the basis therefor, Maker may set-off any Claim it may have against Payee against amounts otherwise payable under this Note. The exercise of such right of set-off by Maker in good faith, whether or not ultimately determined to be justified, will not constitute an Event of Default under this Note. Neither the exercise of nor the failure to exercise such right of set-off will constitute an election of remedies or limit Maker in any manner in the enforcement of any other remedies that may be available to it. For purposes of this Section V, “Claims” means any claims arising from any loss, liability, damage, expense (including costs of investigation and defense and reasonable attorneys’ fees and expenses) or diminution of value sustained by Maker.

Section VI. General Provisions

In no event shall the amount of interest due or payable hereunder exceed the maximum rate of interest allowed by applicable law, and in the event any such payment is inadvertently paid by Maker or inadvertently received by Payee, then such excess sum shall be credited as a payment of principal, unless Maker shall notify Payee, in writing, that Maker elects to have such excess sum returned to Maker forthwith. It is the express intent hereof that Maker not pay and Payee not receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be legally paid by Maker under applicable law.

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Neither this Note nor any unpaid proceeds hereof may be assigned, negotiated or otherwise transferred by Payee, except by will or pursuant to the laws of descent and distribution.

THIS NOTE, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS).

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IN WITNESS WHEREOF, the undersigned Maker has hereunto executed this instrument as of the day and year first above written.

MAKER:
The PBSJ Corporation
By:	/s/ John B. Zumwalt, III
Name:	John B. Zumwalt, III
Title:	Chairman, CEO

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EX-10.26

Exhibit 10.26

NON-NEGOTIABLE PROMISSORY NOTE

US $ 1,242,000 As of February 23, 2006

FOR VALUE RECEIVED, the undersigned, PBSJ Corporation, a Florida corporation (“Maker”), hereby promises to pay to Richard A. Wickett (“Payee”), at such place as Payee shall designate in writing, in lawful money of the United States of America, the principal sum of One million two hundred forty-two and no/100 Dollars (US $1,242,000), together with interest thereon, or on so much thereof as is from time to time outstanding, at the rates hereinafter set forth below, the principal sum and interest being payable as set forth below.

Section I. Rate of Interest

From and after the date hereof through December 30, 2006, interest shall accrue on the outstanding principal balance hereof at 7.5% per annum, which is the prime rate of Maker’s primary bank lender (the “Prime Rate”) as of the date hereof. On each December 31^st following the date hereof through and including December 31, 2010, the interest rate hereunder shall be reset to the Prime Rate as of the date thereof, such that from such December 31^st through the next succeeding December 30^th, interest shall accrue on the outstanding principal balance hereof at such Prime Rate.

Section II. Payment of Principal and Interest

Subject to Sections III, IV and V, on the 1st day of each month commencing March 1, 2006 and ending January 1, 2011, Maker shall pay to Payee $1 of principal and all interest accrued but not paid prior to such date. On February 28, 2011, Maker shall pay to Payee the remaining principal balance hereof then outstanding and not subject to a claim of set-off by Maker and all interest accrued but not paid prior to such date.

Section III. Prepayments

Maker shall have the right to prepay the indebtedness evidenced by this Note, in full or in part, at any time, without penalty, fee or charge.

Section IV. Events of Default

The occurrence of any of the following events or conditions shall constitute an “Event of Default” hereunder:

(a) Except as set forth in Section V, Maker shall fail to make any payment of principal or interest under this Note when due, and such failure shall have continued for 30 days after written notice from Payee to Maker;

(b) Maker shall: (i) file a voluntary petition or assignment in bankruptcy or a voluntary petition or assignment or answer seeking liquidation, reorganization, arrangement, readjustment of Maker’s debts, or any other relief under 11 U.S.C §§ 101 et. seq, as the same may be amended (the “Bankruptcy Code”), or under any other act or law pertaining to insolvency or debtor relief, whether state, federal, or foreign, now or hereafter existing; (ii) enter into any agreement indicating consent to, approval of, or acquiescence in, any such petition or proceeding; (iii) apply for or permit the appointment, by consent or acquiescence, of a receiver, custodian or trustee of all or a substantial part of Maker’s property; (iv) make an assignment for the benefit of creditors; (v) be unable or shall fail to pay Maker’s debts generally as such debts become due, or (vi) admit in writing Maker’s inability or failure to pay Maker’s debts generally as such debts become due; or

(c) There occurs (i) a filing or issuance against Maker of an involuntary petition in bankruptcy or seeking liquidation, reorganization, arrangement, readjustment of Maker’s debts or any other relief under the Bankruptcy Code, or under any other act or law pertaining to insolvency or debtor relief, whether state, federal or foreign, now or hereafter existing; (ii) the involuntary appointment of a receiver, liquidator, custodian or trustee of Maker or for all or a substantial part of Maker’s property; or (iii) the issuance of a warrant of attachment, execution or similar process against all or any substantial part of the property of Maker and any of such (i) – (iii) shall not have been discharged (or provision shall not have been made for such discharge), or stay of execution thereof shall not have been procured, within ninety (90) days from the date of entry thereof.

Upon any Event of Default, the total outstanding principal and all interest payable hereunder shall become immediately due and payable.

Section V. Set-Off

Upon notice to Payee specifying in reasonable detail the basis therefor, Maker may set-off any Claim it may have against Payee against amounts otherwise payable under this Note. The exercise of such right of set-off by Maker in good faith, whether or not ultimately determined to be justified, will not constitute an Event of Default under this Note. Neither the exercise of nor the failure to exercise such right of set-off will constitute an election of remedies or limit Maker in any manner in the enforcement of any other remedies that may be available to it. For purposes of this Section V, “Claims” means any claims arising from any loss, liability, damage, expense (including costs of investigation and defense and reasonable attorneys’ fees and expenses) or diminution of value sustained by Maker.

Section VI. General Provisions

In no event shall the amount of interest due or payable hereunder exceed the maximum rate of interest allowed by applicable law, and in the event any such payment is inadvertently paid by Maker or inadvertently received by Payee, then such excess sum shall be credited as a payment of principal, unless Maker shall notify Payee, in writing, that Maker elects to have such excess sum returned to Maker forthwith. It is the express intent hereof that Maker not pay and Payee not receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be legally paid by Maker under applicable law.

Neither this Note nor any unpaid proceeds hereof may be assigned, negotiated or otherwise transferred by Payee, except by will or pursuant to the laws of descent and distribution.

THIS NOTE, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS).

IN WITNESS WHEREOF, the undersigned Maker has hereunto executed this instrument as of the day and year first above written.

MAKER:
The PBSJ Corporation
By:	/s/ John B. Zumwalt, III
Name:	John B. Zumwalt, III
Title:	Chairman, CEO

EX-10.27

Exhibit 10.27

TOLLING AGREEMENT

THIS TOLLING AGREEMENT (“Agreement”) is made and entered into as of this 16^th day of March, 2006 (the “Effective Date”), by and between Kathryn J. Wilson (“Wilson”), on the one hand, and The PBSJ Corporation, and its subsidiaries and affiliates including but not limited to Post, Buckley, Schuh & Jernigan, Inc., PBS&J Construction Services, Inc., Seminole Development II, Inc., PBS&J Caribe Engineering, C.S.P., and Post, Buckley, International, Inc. (collectively “PBSJ,” and together with Wilson, the “Parties”).

Recitals

WHEREAS, at various times Wilson was an employee and officer of PBSJ (collectively the “Affiliation Period”);

WHEREAS, Wilson and PBSJ are parties to a Key Employee Retention Program Agreement dated January 1, 2005, amended to the date hereof (collectively the “Agreements”);

WHEREAS, PBSJ believes it may have claims against Wilson arising out of acts, conduct, events or circumstances related to, arising from, or in connection with the Affiliation Period and/or the Agreements;

WHEREAS, Wilson expressly denies any claim(s), fault, improper acts(s) or alleged wrongdoing of any kind;

WHEREAS, the Parties wish to postpone or avoid the inconvenience, expense, and distraction of possible litigation by PBSJ against Wilson, while fully preserving any rights of PBSJ that exist as of the date of this Agreement to commence legal action against Wilson at a future date, which, but for this Agreement, might otherwise be time-barred by any applicable statute of limitations, laches, and other possible time-bars and defenses based in whole or in part on the time which may elapse from the accrual of such claims to the filing of an action (all of which time-bars and defenses, including, the statute of limitations and laches, are referred to as “Time Defenses”);

WHEREAS, PBSJ and Wilson have the power and authority to enter into this Agreement and no other parties are necessary to join herein in order to toll the statute of limitations and other Time Defenses; and,

NOW THEREFORE, in consideration of PBSJ forbearing from initiating a lawsuit, arbitration or any other legal proceedings against Wilson at the present time, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Terms and Conditions

1. All of the foregoing Recitals are true and correct and are incorporated herein as part of the Agreement for all purposes.

2. With respect to any and all claims or causes of action, known or unknown, relating to, arising out of, or in connection with, the Affiliation Period and/or the Agreements, including but not limited to claims for alleged breach of fiduciary duty, fraud, negligence, gross negligence, negligent misrepresentation, breach of contract, or any other claims or causes of action whatsoever (collectively, the “Tolled Claims”), the Parties hereby stipulate that any applicable statute of limitations or other Time Defenses applicable to the Tolled Claims shall be deemed tolled from the effective date of this Agreement until the earlier of: (a) the expiration of four (4) calendar years from the date of the execution of this Agreement; or (b) the termination of this Agreement by either PBSJ or

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Wilson in accordance with the terms and conditions of this Agreement. The period of time during which any applicable statute of limitations or other Time Defenses applicable to the Tolled Claims shall be deemed tolled is hereinafter referred to as the “Tolling Period.” The Tolling Period shall run from the date of execution of this Agreement until termination of this Agreement as provided herein. For purposes of clarity, the tolling of the statute of limitations and other Time Defenses during the Tolling Period shall survive any termination hereof, such that any Tolled Claim which would have been barred as a result of the expiration of the statute of limitations or other Time Defense with respect to such claim at any time during the Tolling Period may be brought by PBSJ at any time prior to the termination of the Tolling Period and Wilson may not assert the expiration of the statute of limitation during such period or any other Time Defense as a defense to any such Tolled Claim brought by PBSJ.

3. Wilson further agrees that she shall not interpose in any lawsuit or action between the Parties related to the Tolled Claims: (a) a defense that the applicable statute of limitations shall have expired during the Tolling Period and/or (b) any Time Defenses based on the passage of time during the Tolling Period. The agreement set forth in this paragraph 3 shall survive any termination of this Agreement.

4. Either party to this Agreement may terminate the Tolling Period by giving the other party sixty (60) days prior written notice by certified mail of the termination of the Tolling Period. Any applicable statute of limitations or other Time Defenses which apply to the Tolled Claims shall begin to run again from the effective date of termination of the Tolling Period.

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5. This Agreement may not be used or relied upon for any purpose other than the enforcement of its terms. This Agreement shall not be admissible in any proceeding and shall not be used by either party in any proceeding, except solely for the purpose of establishing, if the matter is contested, the tolling of any statute of limitations or other Time Defenses for the specific and limited period of time under such terms as are set forth in this Agreement. In the event that the terms of this Agreement are enforced in the context of a jury-trial in which any issue pertaining to the applicability of the statute of limitations or Time Defenses is submitted to the jury, the Court shall instruct the jury on the application of the statute of limitations or other Time Defenses as altered by the terms of this Agreement, but shall not disclose this Agreement or its existence to the jury or otherwise make reference to the existence of any agreement by the parties to alter or modify the application of the statute of limitation or other Time Defense. Nothing in this Agreement constitutes an admission by any party that, in the absence of this Agreement, the statute of limitations and/or any other Time Defense has or would have run or become applicable, and this Agreement shall not be used in any proceeding as evidence of any such admission, express or implied.

6. Nothing in this Agreement shall operate to revive any claims of PBSJ of whatever nature which are already barred, in whole or in part, by any Time Defenses, or the passage of time, as of the date of execution of this Agreement.

7. Nothing in this agreement shall operate as a waiver of or prejudice any party’s right to assert that the statute of limitations or any other Time Defenses have been tolled or have not yet run for reasons other than the execution of this Agreement.

8. Nothing in this Agreement shall be construed as an admission of any fault, liability or wrongdoing by Wilson. Further, nothing in this Agreement shall be construed as a waiver of any defenses of Wilson to any claims of PBSJ which are not related to the passage of time all of which are expressly reserved by Wilson.

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9. This Agreement may be signed in counterparts, each of which shall he deemed an original, and all such counterparts constituting one Agreement. The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile shall be deemed to be their original signatures for all purposes. Each party signing this Agreement represents that she or it has read the Agreement, understands it, and intends to be legally bound by all of its terms.

10. Each Party hereby acknowledges and agrees: (a) that in the negotiation and drafting of this Agreement she or it has had the opportunity to consult with counsel of her or its choice; (b) that her or its counsel has had an opportunity to contribute to the negotiation and drafting of this Agreement; and (c) that the principle of construing a document most strictly against its drafter shall not apply with respect to the interpretation of this Agreement.

11. The signatories to this Agreement represent and warrant that they have the authorization and power to bind the party on whose behalf they are signing.

12. Any and all notices under this Agreement shall be in writing, and shall be addressed and provided to the Parties as follows:

To PBSJ: Becky S. Schaffer, Esq. The PBSJ Corporation 5300 West Cypress Street Tampa, FL 33607

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with a copy to:	Gary Epstein, Esq. Greenberg Traurig, P.A. 1221 Brickell Avenue Miami, Florida 33131
To Wilson:	Kathryn J. Wilson [address]
with a copy to:

13. the rights and obligations of the Parties created by this Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without regard lo conflicts of law.

14. This Agreement may not be amended, modified, or supplemented, except in writing duly executed and delivered by both Parties to this Agreement.

15. This Agreement constitutes the full and complete agreement of the parties concerning the subject matter of the Agreement, and there are no covenants, conditions, or terms other than those expressly set forth in this Agreement.

16. The parties agree to take all actions reasonably necessary to effectuate the terms and purpose of this Agreement

IN WITNESS WHEREOF, the Parties have hereunto set their hands and seals as of the date first hereinabove written.

WITNESSES:	PBSJ Corporation
	By:	/s/ John B. Zumwalt, III
	Print Name:	John B. Zumwalt, III
	Title:	Chairman & CEO

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WITNESSES:	Kathryn J. Wilson
	By:	/s/ Kathryn J. Wilson
	Print Name:	Kathryn J. Wilson
	Title:

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EX-10.28

Exhibit 10.28

TOLLING AGREEMENT

THIS TOLLING AGREEMENT (“Agreement”) is made and entered into as of this 16^th day of March, 2006 (the “Effective Date”), by and between Richard Wickett (“Wickett”), on tilt one hand, and The PBSJ Corporation, and its subsidiaries and affiliates including but not limited to Post, Buckley, Schuh & Jernigan, Inc., PBS&J Construction Services, Inc., Seminole Development II, Inc., PBS&J Caribe Engineering, C.S.P., and Post, Buckley, International, Inc. (collectively “PBSJ,” and together with Wickett, the “Parties”).

Recitals

WHEREAS, at various times Wickett was an employee, officer, and director of PBSJ (collectively the “Affiliation Period”);

WHEREAS, Wickett and PBSJ are parties to a Stock Buy/Sell Agreement dated February 28, 2005, a Key Employee Retention Program Agreement dated January 1, 2005, and a Supplemental Retirement/Death Benefits Agreement dated December 17, 1987, each as amended to the date hereof (collectively the “Agreements”);

WHEREAS, PBSJ believes it may have claims against Wickett arising out of acts, conduct, events or circumstances related to, arising from, or in connection with the Affiliation Period and/or the Agreements;

WHEREAS, Wickett expressly denies any claim(s), fault, improper acts(s) or alleged wrongdoing of any kind;

WHEREAS, the Parties wish to postpone or avoid the inconvenience, expense, and distraction of possible litigation by PBSJ against Wickett, while fully preserving any rights of PBSJ that exist as of the date of this Agreement to commence legal action

against Wickett at a future date, which, but for this Agreement, might otherwise be time-barred by any applicable statute of limitations, laches, and other possible time-bars and defenses based in whole or in part on the time which may elapse from the accrual of such claims to the filing of an action (all of which time-bars and defenses, including, the statute of limitations and laches, are referred to as “Time Defenses”);

WHEREAS, PBSJ and Wickett have the power and authority to enter into this Agreement and no other parties are necessary to join herein in order to toll the statute of limitations and other Time Defenses; and,

NOW THEREFORE, in consideration of PBSJ forbearing from initiating a lawsuit, arbitration or any other legal proceeding against Wickett at the present time, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Terms and Conditions

1. All of the foregoing Recitals are true and correct and are incorporated herein as part of the Agreement for all purposes.

2. With respect to any and all claims or causes of action, known or unknown, relating to, arising out of, or in connection with, the Affiliation Period and/or the Agreements, including but not limited to claims for alleged breach of fiduciary duty, fraud, negligence, gross negligence, negligent misrepresentation, breach of contract, or any other claims or causes of action whatsoever (collectively, the “Tolled Claims”), the Parties hereby stipulate that any applicable statute of limitations or other Time Defenses applicable to the Tolled Claims shall be deemed tolled from the effective date of this Agreement until the earlier of: (a) the expiration

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of four (4) calendar years from the date of the execution of this Agreement; or (b) the termination of this Agreement by either PBSJ or Wickett in accordance with the terms and conditions of this Agreement. The period of time during which any applicable statute of limitations or other Time Defenses applicable to the Tolled Claims shall be deemed tolled is hereinafter referred to as the “Tolling Period.” The Tolling Period shall run from the date of execution of this Agreement until termination of this Agreement as provided herein. For purposes of clarity, the tolling of the statute of limitations and other Time Defenses during the Tolling Period shall survive any termination hereof, such that any Tolled Claim which would have been barred as a result of the expiration of the statute of limitations or other Time Defense with respect to such claim at any time during the Tolling Period may be brought by PBSJ at any time prior to the termination of the Tolling Period and Wickett may not assert the expiration of the statute of limitation during such period or any other Time Defense as a defense to any such Tolled Claim brought by PBSJ.

3. Wickett further agrees that he shall not interpose in any lawsuit or action between the Parties related to the Tolled Claims: (a) a defense that the applicable statute of limitations shall have expired during the Tolling Period and/or (b) any Time Defenses based on the passage of time during the Tolling Period. The agreement set forth in this paragraph 3 shall survive any termination of this Agreement.

4. Either party to this Agreement may terminate the Tolling Period by giving the other party sixty (60) days prior written notice by certified mail of the termination of the Tolling Period. Any applicable statute of limitations or other Time Defenses which apply to the Tolled Claims shall begin to run again from the effective date of termination of the Toiling Period.

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5. This Agreement may not be used or relied upon for any purpose other than the enforcement of its terms. This Agreement shall not be admissible in any proceeding and shall not be used by either party in any proceeding, except solely for the purpose of establishing, if the matter is contested, the tolling of any statute of limitations or other Time Defenses for the specific and limited period of time under such terms as are set forth in this Agreement. In the event that the terms of this Agreement are enforced in the context of a jury-trial in which any issue pertaining to the applicability of the statute of limitations or Time Defenses is submitted to the jury, the Court shall instruct the jury on the application of the statute of limitations or other Time Defenses as altered by the terms of this Agreement, but shall not disclose this Agreement or its existence to the jury or otherwise make reference to the existence of any agreement by the parties to alter or modify the application of the statute of limitations or other Time Defenses. Nothing in this Agreement, constitutes an admission by any party that, in the absence of this Agreement, the statute of limitations and/or any other Time Defense has or would have run or become applicable, and this Agreement shall not be used in any proceeding as evidence of any such admission, express or implied.

6. Nothing in this Agreement shall operate to revive any claims of PBSJ of whatever nature which are already barred, in whole or in part, by any Time Defenses, or the passage of time, as of the date of execution of this Agreement.

7. Nothing in this agreement shall operate as a waiver of or prejudice any party’s right to assert that the statute of limitations or any other Time Defenses have been tolled or have not yet run for reasons other than the execution of this Agreement.

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8. Nothing in this Agreement shall be construed as an admission of any fault, liability or wrongdoing by Wickett. Further, nothing in this Agreement shall be construed as a waiver of any defenses of Wickett to any claims of PBSJ which are not related to the passage of time all of which are expressly reserved by Wickett.

9. This Agreement may be signed in counterparts, each of which shall be deemed an original, and all such counterparts constituting one Agreement. The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile shall be deemed to be their original signatures for all purposes. Each party signing this Agreement represents that he or it has read the Agreement, understands it, and intends to be legally bound by all of its terms.

10. Each Party hereby acknowledges and agrees: (a) that in the negotiation and drafting of this Agreement he or it has had the opportunity to consult with counsel of his or its choice; (b) that his or its counsel has had an opportunity to contribute to the negotiation and drafting of this Agreement; and (c) that the principle of construing a document most strictly against its drafter shall not apply with respect to the interpretation of this Agreement.

11. The signatories to this Agreement represent and warrant that they have the authorization and power to bind the party on whose behalf they are signing.

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12. Any and all notices under this Agreement shall be in writing, and shall be addressed and provided to the Parties as follows:

To PBSJ:	Becky S. Schaffer, Esq. The PBSJ Corporation 5300 West Cypress Street Tampa, FL 33607
with a copy to:
	Gary Epstein, Esq. Greenberg Traurig, P. A. 1221 Brickell Avenue Miami, Florida 33131
To Wickett:	Richard Wickett [address]
with a copy to:	Neil Sonnett, Esq. One Biscayne Tower 2 South Biscayne Boulevard Suite 2600 Miami, Florida 33131

13. The rights and obligations of the Parties created by this Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without regard to conflicts of law.

14. This Agreement may not be amended, modified, or supplemented, except in writing duly executed and delivered by both Parties to this Agreement.

15. This Agreement constitutes the full and complete agreement of the parties concerning the subject matter of the Agreement, and there are no covenants, conditions, or terms other than those expressly set forth in this Agreement.

16. The parties agree to take all actions reasonably necessary to effectuate the terms and purpose of this Agreement.

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IN WITNESS WHEREOF, the Parties have hereunto set their hands and seals as of the date first hereinabove written.

WITNESSES:	PBSJ Corporation
	By:	/s/ John B. Zumwalt, III
	Print Name:	John B. Zumwalt, III
	Title:	Chairman & CEO
		3/16/06
WITNESSES:	Richard Wickett
	By:	/s/ Richard Wickett
	Print Name:	Richard Wickett
	Title:

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EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

I, John B. Zumwalt III, certify that:

1. I have reviewed this report on Form 10-K of the PBSJ Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by the report based on such evaluation; and

c) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

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

Date: January 26, 2007	/s/ John B. Zumwalt III
	John B. Zumwalt III
	Chairman of the Board and
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

I, Donald J. Vrana, certify that:

1. I have reviewed this report on Form 10-K of the PBSJ Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Annual Report;

6. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by the report based on such evaluation; and

c) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

4. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

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

Date: January 26, 2007	/s/ Donald J. Vrana
	Donald J. Vrana
	Senior Vice President and
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certificate Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officers of the PBSJ Corporation (the “Company”) hereby certify, to such officers’ knowledge, that:

(i) the accompanying Annual Report on Form 10-K of the Company for the period ended December 31, 2005 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 26, 2007	/s/ John B. Zumwalt III
	John B. Zumwalt III
	Chairman of the Board and
	Chief Executive Officer

Date: January 26, 2007	/s/ Donald J. Vrana
	Donald J. Vrana
	Senior Vice President and
	Chief Financial Officer