TETRA TECH INC, DEF 14A, 1997-09-24

TETRA TECH INC
DEF 14A, 1997-09-24
ENGINEERING SERVICES

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SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12

TETRA TECH, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE>

TETRA TECH, INC.

----------------

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 28, 1997

------------------------

To the Stockholders of

TETRA TECH, INC.:

A Special Meeting of the Stockholders (the "Special Meeting") of Tetra Tech,
Inc., a Delaware corporation (the "Company"), will be held on Tuesday, October
28, 1997 at 10:00 a.m., Pacific Time, at the Company's principal executive
offices located at 670 North Rosemead Boulevard, Pasadena, California 91107, for
the following purposes as described in the accompanying Proxy Statement:

1. To consider and act upon a proposal to amend the Company's Certificate
of Incorporation to increase the number of authorized shares of common
stock, $.01 par value per share ("Common Stock"), from 20,000,000 to
30,000,000.

2. To transact such other business as may properly come before the Special
Meeting or any adjournment or adjournments thereof.

The Board of Directors has fixed the close of business on September 8, 1997
as the record date for the determination of stockholders entitled to vote at the
Special Meeting or any adjournment or adjournments thereof, and only record
holders of the Company's Common Stock and Series A Preferred Stock, $.01 par
value per share, at the close of business on that day will be entitled to vote.

By Order of the Board of Directors

Richard A. Lemmon
VICE PRESIDENT AND SECRETARY

Pasadena, California
September 26, 1997

YOU ARE URGED TO VOTE UPON THE MATTER PRESENTED AND TO SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. IT IS IMPORTANT FOR
YOU TO BE REPRESENTED AT THE SPECIAL MEETING. NOT VOTING WILL HAVE THE SAME
EFFECT AS VOTING "NO" ON PROPOSAL NO. 1. PROXIES ARE REVOCABLE AT ANY TIME AND
THE EXECUTION OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU
ARE PRESENT AT THE SPECIAL MEETING.
<PAGE>

TETRA TECH, INC.
670 NORTH ROSEMEAD BOULEVARD
PASADENA, CALIFORNIA 91107

------------------------

PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 28, 1997

------------------------

GENERAL INFORMATION

This Proxy Statement is being sent on or about September 26, 1997 in
connection with the solicitation of proxies by the Board of Directors of Tetra
Tech, Inc., a Delaware corporation (the "Company"). The proxies are for use at a
Special Meeting of Stockholders of the Company (the "Special Meeting"), which
will be held at 10:00 a.m., Pacific Time, on Tuesday, October 28, 1997, at the
Company's principal executive offices located at 670 North Rosemead Boulevard,
Pasadena, California 91107, and at any meetings held upon adjournment thereof.
The record date for the Special Meeting is the close of business on September 8,
1997 (the "Record Date"), and all holders of record of the Company's common
stock, $.01 par value per share (the "Common Stock"), and Series A Preferred
Stock, $.01 par value per share (the "Series A Stock"), on the Record Date are
entitled to notice of the Special Meeting and to vote at the Special Meeting and
any meetings held upon adjournment thereof.

A proxy form is enclosed. Whether or not you plan to attend the Special
Meeting in person, please date, sign and return the enclosed proxy as promptly
as possible, in the postage prepaid envelope provided, to ensure that your
shares will be voted at the Special Meeting. Any stockholder who returns a proxy
in such form has the power to revoke it at any time prior to its effective use
by filing an instrument revoking it or a duly executed proxy bearing a later
date with the Secretary of the Company or by attending the Special Meeting and
voting in person. Unless contrary instructions are given, any such proxy, if not
revoked, will be voted at the Special Meeting for approval of the proposed
amendment to the Company's Certificate of Incorporation to increase the number
of authorized shares of Common Stock from 20,000,000 to 30,000,000 (the
"Amendment"), and as recommended by the Board of Directors with regard to all
other matters, in its discretion.

The voting securities of the Company are the outstanding shares of Common
Stock and Series A Stock. At the Record Date, the Company had outstanding
16,564,080 shares of Common Stock and 1,231,840 shares Series A Stock. For each
share of Common Stock or Series A Stock held on the Record Date, a stockholder
is entitled to one vote on all matters to be considered at the Special Meeting.

Approval of the Amendment requires the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock and Series A Stock as of the
Record Date entitled to vote on this matter at the Meeting. Neither an
abstention nor a broker non-vote is an affirmative vote and, therefore, both
will have the same legal effect as a vote against the approval of the proposed
Amendment. Broker non-votes occur when a broker holding shares of Common Stock
in street name withholds its vote on certain non-routine matters because the
broker has not received instructions from the beneficial owner of those shares
and does not have discretionary authority to vote on such non-routine matters
without specific instructions. Brokers holding shares in street name must
receive specific instructions from the beneficial owners in order to have the
authority to vote, in person or by proxy, on certain non-routine matters. When a
beneficial owner does not give specific instructions to the broker, the broker,
as the holder of record, is entitled to vote only on "routine" matters and must
withhold its votes as to any "non-routine" matters. Where a proxy solicitation
includes a non-routine proposal and the broker does not receive specific

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instructions from the beneficial owner, the resulting proxy is considered a
"limited proxy." Shares represented by limited proxies are considered present
for quorum purposes, but are not considered present for purposes of determining
the total number of shares with voting power present with regard to a non-
routine proposal. The resulting broker non-vote of such a limited proxy will be
treated as an abstention on such non-routine proposal. The proposed Amendment is
a non-routine proposal.

The cost of preparing, assembling, printing and mailing this Proxy Statement
and the accompanying form of proxy, and the cost of soliciting proxies relating
to the Special Meeting, will be borne by the Company. The Company may request
banks and brokers to solicit their customers who beneficially own Common Stock
listed of record in names of nominees, and will reimburse such banks and brokers
for their reasonable out-of-pocket expenses of such solicitations. The original
solicitation of proxies by mail may be supplemented by telephone, telegram and
personal solicitation by officers, directors and regular employees of the
Company, but no additional compensation will be paid to such individuals.

The Common Stock is listed for trading under the symbol "WATR" on The Nasdaq
National Market ("Nasdaq"), which is operated by The Nasdaq Stock Market, Inc.
On September 8, 1997, the closing price for a share of Common Stock on Nasdaq
was $22.00.

The principal executive offices of the Company are located at 670 North
Rosemead Boulevard, Pasadena, California 91107, and the Company's telephone
number is (626) 351-4664.

THIS PROXY STATEMENT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING
OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE
"EXCHANGE ACT"). THESE STATEMENTS ARE FOUND PRINCIPALLY IN THE SECTION OF THIS
PROSPECTUS STATEMENT ENTITLED "THE WHALEN ACQUISITION." ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A
RESULT OF CERTAIN CONSIDERATIONS, INCLUDING THOSE DETAILED FROM TIME TO TIME IN
THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT AND THE EXCHANGE ACT.

PROPOSAL NO. 1
APPROVAL OF AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION

OVERVIEW

In July 1997, the Board of Directors declared advisable and unanimously
approved an amendment of the Company's Certificate of Incorporation to increase
the number of authorized shares of Common Stock from 20,000,000 shares to
30,000,000 shares. No increase in the number of shares of Preferred Stock of the
Company, currently 2,000,000 shares, is proposed or anticipated. As more fully
set forth below, the proposed Amendment is intended to permit the automatic
conversion of the outstanding shares of Series A Stock into shares of Common
Stock and to improve the Company's flexibility in meeting its future needs for
unreserved Common Stock.

If the Amendment is approved by the stockholders, it will become effective
upon the filing of a Certificate of Amendment of Certificate of Incorporation
(the "Certificate of Amendment") with the Delaware Secretary of State. The text
of the second paragraph of Article IV of the Company's Certificate of
Incorporation will read as follows:

"The total number of shares of stock that the Corporation shall
have authority to issue is thirty-two million (32,000,000),
consisting of thirty million (30,000,000) shares of common stock,
par value $0.01, and two million (2,000,000) shares of preferred
stock, par value $0.01. The designations and the powers,
preferences and rights, and the qualifications, limitations or
restrictions thereof are as follows:"

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As of the close of business on the Record Date, of the 20,000,000 shares
authorized, 16,564,080 shares of Common Stock of the Company were issued and
outstanding, 2,926,642 shares of Common Stock were reserved for issuance upon
exercise of outstanding stock options and 463,915 shares were reserved for
future issuance under the Company's stock benefit plans. Accordingly, only
45,363 shares of Common Stock were unreserved on the Record Date. As of the
close of business on the Record Date, 1,231,840 shares of Series A Stock were
outstanding. Such shares of Series A Stock, upon conversion into shares of
Common Stock, shall be restored to the status of authorized but unissued shares
of Preferred Stock.

REASONS FOR AND POSSIBLE EFFECTS OF THE PROPOSED AMENDMENT

CONVERSION OF SERIES A STOCK

On June 11, 1997, the Company completed the acquisition of Whalen & Company,
Inc., a Delaware corporation ("WhalenCo"), and Whalen Service Corps Inc., a
Delaware corporation ("Whalen Service" and, collectively with WhalenCo, the
"Whalen Company"), pursuant to the terms of an Agreement and Plan of
Reorganization dated as of June 11, 1997 (the "Merger Agreement") among the
Company, WhalenCo, Whalen Service and the stockholders of WhalenCo and Whalen
Service (the "Whalen Stockholders"). The Merger Agreement provided for the
merger of WhalenCo and Whalen Service with and into the Company (the "Merger").

In connection with the Merger, the Company issued to the Whalen Stockholders
an aggregate of 1,680,000 shares of Common Stock and 1,231,840 shares of Series
A Stock. Pursuant to the Certificate of Designation of Preferences of Series A
Preferred Stock, as filed by the Company with the Delaware Secretary of State on
June 11, 1997, each share of Series A Stock will automatically be converted into
one share of Common Stock immediately upon the filing of the Certificate of
Amendment with the Delaware Secretary of State. IF THE AMENDMENT IS NOT
APPROVED, DANIEL A. WHALEN (THE "PRINCIPAL WHALEN STOCKHOLDER") MAY, PURSUANT TO
THE TERMS OF THE MERGER AGREEMENT, ELECT TO CAUSE THE COMPANY TO REPURCHASE ALL
SHARES OF SERIES A STOCK (THE "PUT OPTION") AT THE AVERAGE CLOSING PRICE OF THE
COMMON STOCK ON THE FIVE TRADING DAYS ENDING ON THE LAST TRADING DAY PRIOR TO
THE PRINCIPAL WHALEN STOCKHOLDER'S EXERCISE OF THE PUT OPTION. ACCORDINGLY,
ASSUMING AN AVERAGE CLOSING PRICE OF $23.00, THE COMPANY WOULD BE REQUIRED TO
PAY $28,332,320 TO THE WHALEN STOCKHOLDERS TO REDEEM THE SERIES A STOCK UPON THE
EXERCISE OF THE PUT OPTION.

The Company was not required to obtain stockholder approval of the Merger
under the Delaware General Corporation Law or Nasdaq rules and regulations since
the aggregate number of shares of Common Stock and Series A Stock issued to the
Whalen Stockholders represented less than 20% of the outstanding shares of
Common Stock on the effective date of the Merger.

FLEXIBILITY IN SHARE ISSUANCE

As indicated above, as of the Record Date, the Company had only 45,363
authorized but unreserved and unissued shares of Common Stock available for
future issuance. This severely limits the ability of the Board of Directors to
issue shares of Common Stock without seeking stockholder approval. Obtaining
stockholder approval is a time consuming, expensive process and could delay or
prevent the Company from taking such actions as potential acquisitions,
financings, stock splits, stock dividends or additional compensation plans.

If the Amendment is approved, approximately 8,813,523 authorized, unreserved
and unissued shares of Common Stock (after giving effect to the conversion of
the Series A Stock) will be available for issue from time to time for such
purposes as the Board of Directors may approve. No further vote of the
stockholders of the Company will be required, except as provided under Delaware
law or under the rules of Nasdaq or any other national securities exchange on
which shares of Common Stock of the Company are then listed. The availability of
additional shares for issue, without the delay and expense of

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obtaining the approval of stockholders at a subsequent special meeting, will
afford the Company greater flexibility in acting upon proposed transactions in
which shares of Common Stock may be issued.

POSSIBLE EFFECTS

The additional shares of Common Stock to be authorized by adoption of the
Amendment would have rights identical to the currently outstanding shares of
Common Stock of the Company. Adoption of the proposed Amendment and issuance of
the Common Stock would not affect the rights of the holders of currently
outstanding shares of Common Stock, except for effects incidental to increasing
the number of outstanding shares of Common Stock.

Stockholders should note that authorized but unissued stock could be issued
by the Board of Directors for the purpose of strategic acquisition
opportunities. The Company continuously evaluates the marketplace for these
opportunities to position itself to address existing and emerging markets. The
Company views acquisitions as a key component of its growth strategy, and
intends to use both securities and cash, as it deems appropriate, to fund such
acquisitions. In addition, the authorized but unissued stock could be issued by
the Board of Directors for the purposes of deterring proposals that are opposed
by the Board of Directors such as potential unsolicited takeover attempts. The
Board is not currently aware of any attempt to takeover or acquire the Company,
and has no current plans to issue additional shares of Common Stock other than
pursuant to the exercise of outstanding stock options and stock options that
might be granted in the future under the Company's employee benefit plans, or
pursuant to a possible split of the Common Stock.

The Board of Directors believes that the benefits of providing the Company
with the flexibility to issue shares without delay for any purpose outweighs the
possible disadvantages discussed above, and that it is prudent and in the best
interests of the stockholders to provide the greater flexibility that will
result from the approval of the proposed increase in authorized shares.

THE WHALEN ACQUISITION

THE WHALEN COMPANY

The Whalen Company provides a full range of wireless telecommunications site
development services for Personal Communications Services (PCS), cellular,
Enhanced Specialized Mobile Radio (ESMR), air-to-ground, microwave, paging fiber
optic and switching centers technology. It has successfully sited in excess of
10,000 locations for over 120 systems worldwide. The Company believes that the
acquisition of the Whalen Company provides the opportunity for the Company's
stockholders to recognize strategic and financial benefits.

The Company believes that the Merger represents a complementary technical
fit with its current capabilities. The consulting and engineering requirements
associated with the wireless telecommunications industry; the siting issues,
including site identification, leasing and zoning; the construction management
duties; and the environmental overlays have technical synergy with the Company's
existing expertise and established management systems. The Company also believes
that the Merger enhances its strategic objective of further balancing the
Company's revenue mix between federal and private sector programs, and will
increase the amount of the Company's business driven by economics rather than
regulatory requirements. The Whalen Company further allows the Company to
participate in the growing telecommunications market as an established service
provider. In addition, the Company's domestic and international office network
may help to facilitate the Whalen Company's growth, as geographic presence plays
a role in the marketing, sales and regulatory areas.

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THE FOREGOING STATEMENTS CONTAIN FORWARD-LOOKING STATEMENTS REGARDING THOSE
BENEFITS TO THE COMPANY THAT MANAGEMENT BELIEVES MAY BE ACHIEVED THROUGH THE
MERGER WITH THE WHALEN COMPANY. REALIZATION OF MANAGEMENT'S BELIEFS WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING MANAGEMENT'S SUCCESSFUL EXECUTION OF ITS
BUSINESS PLAN FOR INTEGRATING THE OPERATIONS OF THE WHALEN COMPANY, THE MARKET'S
RECEPTION TO THE COMBINATION OF THE COMPANY AND THE WHALEN COMPANY, AND OTHER
FACTORS BEYOND THE COMPANY'S CONTROL.

TERMS OF THE MERGER

In connection with the Merger, the Whalen Stockholders received aggregate
consideration in the amount of $52,456,144, as follows:

(i) The Company issued to the Whalen Stockholders an aggregate of
1,680,000 shares of Common Stock and 1,231,840 shares of Series A Stock. For
purposes of the Merger Agreement, each share of Common Stock and Series A
Stock was valued at $15.25, for an aggregate value of $44,405,560.

(ii) The Company paid to the Whalen Stockholders cash in the aggregate
amount of $8,050,584.

On the business day prior to the Merger, WhalenCo distributed to the Whalen
Stockholders (i) cash in the amount of $4,138,396 and (ii) accounts receivable
having a net value of $18,455,838.

In determining the consideration to be paid in the Merger, the Company
investigated the Whalen Company and its business and determined an approximate
aggregate value of the Whalen Company to the Company based on investment factors
including the book value of the Whalen Company's assets, an appropriate multiple
of the Whalen Company's current and future earnings, the Whalen Company's
backlog and current contracts, the Whalen Company's revenues, the Whalen
Company's reputation in the field of wireless telecommunications site
development, and the compatibility of the Whalen Company's geographic scope and
technical capabilities. A final determination of such value was arrived at by
means of arm's length bargaining among the parties to the Merger Agreement.

FINANCIAL INFORMATION--HISTORICAL AND PRO FORMA

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REPORT OF DELOITTE & TOUCHE LLP

TO THE BOARD OF DIRECTORS AND STOCKHOLDER
OF WHALEN & COMPANY, INC.:

We have audited the accompanying balance sheet of Whalen & Company, Inc. as
of December 31, 1996, and the related statements of income, stockholder's equity
and cash flows for the year then ended. We have also audited the statements of
income, stockholder's equity and cash flows for the year ended December 31,
1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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. An audit also includes
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 financial statements present fairly, in all material
respects, the financial position of Whalen & Company, Inc. at December 31, 1996,
and the results of their operations and their cash flows for the years ended
December 31, 1996 and December 31, 1994 in conformity with generally accepted
accounting principles.

DELOITTE & TOUCHE LLP

San Jose, California
August 8, 1997

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE MANAGEMENT OF
WHALEN & COMPANY, INC.:

We have audited the accompanying balance sheet of Whalen & Company, Inc.
(the Company) as of December 31, 1995, and the related statements of operations,
stockholder's equity and cash flows for the year then ended. 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 in accordance with generally accepted auditing
standards. 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Whalen & Company, Inc. as of
December 31, 1995, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

San Francisco, California,
November 1, 1996

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WHALEN & COMPANY, INC.
BALANCE SHEETS
YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
1996 1995
--------- ---------
(IN THOUSANDS,
EXCEPT SHARE
AMOUNTS)
<S> <C> <C>
ASSETS

Current Assets:
Cash and equivalents...................................................................... $ 3,126 $ 783
Accounts receivable, less allowance for doubtful accounts of $2,020 and
$195 in 1996 and 1995, respectively..................................................... 24,941 15,205
Prepaid expenses and other................................................................ 472 566
--------- ---------
Total current assets.................................................................. 28,539 16,554

Property and Equipment, Net................................................................. 705 456
Other Assets................................................................................ 682 360
--------- ---------
Total....................................................................................... $ 29,926 $ 17,370
--------- ---------
--------- ---------

LIABILITIES AND STOCKHOLDER'S EQUITY

Current Liabilities:
Accounts payable.......................................................................... $ 1,119 $ 804
Accrued employee benefits................................................................. 2,830 2,766
Other accrued liabilities................................................................. 509 --
Deferred revenue.......................................................................... -- 2,511
Note payable to stockholder............................................................... 1,446 --
--------- ---------
Total liabilities..................................................................... 5,904 6,081
--------- ---------

Commitments and Contingencies (Note 5)

Stockholder's Equity:
Common stock, $1 par value; 150,000 shares authorized; 100 shares issued outstanding...... 10 10
Retained earnings......................................................................... 24,012 11,279
--------- ---------
Total stockholder's equity............................................................ 24,022 11,289
--------- ---------
Total....................................................................................... $ 29,926 $ 17,370
--------- ---------
--------- ---------
</TABLE>

See notes to financial statements.

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WHALEN & COMPANY, INC.
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Net Revenues:
Management fees................................................................ $ 45,773 $ 44,733 $ 41,145
Per-site fees.................................................................. 10,783 7,366 3,888
Contract termination fee....................................................... -- -- 900
--------- --------- ---------
Total net revenues......................................................... 56,556 52,099 45,933
Field Operating Expenses......................................................... 26,058 29,586 23,890
--------- --------- ---------
Operating Income................................................................. 30,498 22,513 22,043
General and Administrative Expenses.............................................. 11,220 6,193 3,976
--------- --------- ---------
Income From Operations........................................................... 19,278 16,320 18,067
--------- --------- ---------

Other Income (Expense), Net:
Interest income................................................................ 66 533 79
Interest expense............................................................... (35) (110) (234)
Other expense, net............................................................. (74) (756) (48)
--------- --------- ---------
Total other expense, net................................................... (43) (333) (203)
--------- --------- ---------
Income Before Income Taxes....................................................... 19,235 15,987 17,864
State Income Taxes............................................................... 385 500 357
--------- --------- ---------
Net Income....................................................................... $ 18,850 $ 15,487 $ 17,507
--------- --------- ---------
--------- --------- ---------
</TABLE>

See notes to financial statements.

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<PAGE>
WHALEN & COMPANY, INC.

STATEMENTS OF STOCKHOLDER'S EQUITY

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
------------------------ RETAINED STOCKHOLDER'S
SHARES AMOUNT EARNINGS EQUITY
----------- ----------- ---------- ------------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<S> <C> <C> <C> <C>
Balances, January 1, 1994............................................ 100 $ 10 $ 705 $ 715

Net income........................................................... -- -- 17,507 17,507
--- --- ---------- ------------

Balances, December 31, 1994.......................................... 100 10 18,212 18,222

Stockholder distribution............................................. -- -- (22,420) (22,420)
Net income........................................................... -- -- 15,487 15,487
--- --- ---------- ------------

Balances, December 31, 1995.......................................... 100 10 11,279 11,289

Stockholder distribution............................................. -- -- (6,117) (6,117)
Net income........................................................... -- -- 18,850 18,850
--- --- ---------- ------------

Balances, December 31, 1996.......................................... 100 $ 10 $ 24,012 $ 24,022
--- --- ---------- ------------
--- --- ---------- ------------
</TABLE>

See notes to financial statements.

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<PAGE>
WHALEN & COMPANY, INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
1996 1995 1994
---------- --------- ---------
(IN THOUSANDS)

<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................................... $ 18,850 $ 15,487 $ 17,507
Reconciliation of net income to net cash provided by
operating activities:
Depreciation................................................................ 510 170 60
Provision for doubtful accounts............................................. 1,825 195 --
Changes in assets and liabilities:
Accounts receivable....................................................... (11,561) 1,001 (14,119)
Prepaid expenses and other................................................ 94 (151) (291)
Contract termination receivable........................................... 180 180 (540)
Other assets.............................................................. (502) -- --
Accounts payable.......................................................... 315 755 35
Accrued employee benefits................................................. 64 422 1,495
Other accrued liabilities................................................. 509 (782) 553
Deferred revenue.......................................................... (2,511) 2,511 --
---------- --------- ---------

Net cash provided by operating activities................................. 7,773 19,788 4,700
---------- --------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of long-term investment.............................................. -- -- (25)
Sale of long-term investment.................................................. -- 25 --
Purchases of property and equipment........................................... (763) (369) (173)
Proceeds from sale of property and equipment.................................. 4 16 --
---------- --------- ---------

Net cash used in investing activities..................................... (759) (328) (198)
---------- --------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of note payable to stockholder....................................... 1,500 -- 1,002
Repayments of notes payable to stockholder.................................... (54) (3,069) (251)
Distribution to stockholder................................................... (6,117) (22,420) --
---------- --------- ---------

Net cash (used in) provided by financing activities....................... (4,671) (25,489) 751
---------- --------- ---------

NET CHANGE IN CASH AND EQUIVALENTS.............................................. 2,343 (6,029) 5,253

CASH AND EQUIVALENTS, BEGINNING OF YEAR......................................... 783 6,812 1,559
---------- --------- ---------

CASH AND EQUIVALENTS, END OF YEAR............................................... $ 3,126 $ 783 $ 6,812
---------- --------- ---------
---------- --------- ---------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest........................................................ $ -- $ 110 $ 234
---------- --------- ---------
---------- --------- ---------

Cash paid for income taxes.................................................... $ 53 $ 495 $ 40
---------- --------- ---------
---------- --------- ---------
</TABLE>

See notes to financial statements.

11
<PAGE>
WHALEN & COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

1. SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS -- Whalen & Company, Inc. (the "Company") is a
Delaware Chapter S corporation that was formed effective August 25, 1987. Dan
Whalen is the founder and sole stockholder of the Company.

The Company provides program and turnkey project development consulting
services on a contract basis to customers who build and operate wireless
networks. The Company offers a range of services from single-site deployments to
the implementation of complete wireless network systems. The Company has
consulting experience in PCS, cellular, ESMR, wireless, air-to-ground,
microwave, paging, fiber optic and switching center systems.

The Company provides services in North America, South America, Asia,
Australia and Europe.

FINANCIAL STATEMENT ESTIMATES -- The preparation of financial statements in
conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenues and expenses
during the reporting period. Significant estimates include a provision for
doubtful accounts. Actual results could differ from estimates.

CASH AND EQUIVALENTS -- Cash and equivalents include cash and highly liquid
debt instruments with original maturities of three months or less.

ACCOUNTS RECEIVABLE -- Accounts receivable includes billed and unbilled
accounts receivable. Total unbilled accounts receivable were $6,794,000 and
$3,061,000 as of December 31, 1996 and 1995, respectively.

CONCENTRATION OF CREDIT RISK -- Financial instruments which potentially
subject the Company to concentrations of credit risk consist primarily of cash
and equivalents and accounts receivable. The Company places its cash and
equivalents for safekeeping with high-credit-quality financial institutions. The
Company performs ongoing credit evaluations of its customers and generally
requires that customers remit payment for billed revenue within 30 days. The
Company maintains reserves for estimated credit losses. See Note 7 concerning
significant customers.

PROPERTY AND EQUIPMENT -- Property and equipment are stated at cost.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets ranging from two to seven years.

REVENUE RECOGNITION -- The Company recognizes management fee revenue as
project management and consulting services are performed in accordance with
customer contracts. The recognition of revenue related to per-site fees is
deferred until milestones in the Company's customer contracts have been met and
collection is reasonably assured. Per-site fees in 1996 include $8,407,000 from
a single customer of which $2,511,000 were related to 1995 and had been deferred
as of December 31, 1995 due to the uncertainty of collection as of that date.

REIMBURSABLE EXPENSES -- Certain expenses incurred by the Company are passed
on to customers in accordance with customer contract agreements. The Company
records the expense and reimbursement on a gross basis. The amounts included in
management fees and field operating expenses were $6,861,000, $7,122,000 and
$6,128,000 in 1996, 1995 and 1994, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS -- Financial instruments include cash
equivalents and long-term obligations. Cash equivalents are stated at cost which
approximates fair market value based on quoted

12
<PAGE>
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
market prices. The carrying amount of the Company's long-term obligations
approximates fair market value.

INCOME TAXES -- The Company's stockholder elected to be taxed as an S
corporation under the provisions of the Internal Revenue Code. Under these
provisions, the Company does not pay federal corporate income taxes on its
taxable income. As a Chapter S corporation, the Company is required to pay state
income taxes to the states in which it conducts business.

RECLASSIFICATIONS -- Certain reclassifications to the 1995 financial
statements have been made to conform to the 1996 presentation.

2. PROPERTY AND EQUIPMENT, NET

Property and equipment at December 31 consist of the following (in
thousands):

<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Furniture and fixtures...................................................... $ 197 $ 168
Office equipment............................................................ 247 127
Computer equipment.......................................................... 814 281
Computer software........................................................... 89 191
--------- ---------
1,347 767
Accumulated depreciation.................................................... (642) (311)
--------- ---------
$ 705 $ 456
--------- ---------
--------- ---------
</TABLE>

3. LONG-TERM RECEIVABLE

On December 8, 1994, the Company reached a settlement on a contract
termination with a customer relating to a contract to provide construction
administration services that was canceled prior to December 8, 1994. The
customer agreed to pay, as a settlement of all past and future amounts due,
$900,000 over five years beginning in 1994. As of December 31, 1996, $360,000 of
the settlement amount is still outstanding.

The Company has included $180,000 of the outstanding balance in current
accounts receivable for the portion due in 1997. The remaining amount of
$180,000 is due during 1998 and is included in other assets.

The principal amount of the receivable is adjusted each year for increases
in the Consumer Price Index.

4. LINE OF CREDIT

The Company has a revolving line of credit with a bank under which it may
borrow up to $5,000,000 through February 1998. Borrowings bear interest at the
bank's reference rate (8.25% at December 31, 1996) and are personally guaranteed
by the sole stockholder. There were no borrowings outstanding under the
revolving line of credit at December 31, 1996.

5. COMMITMENTS AND CONTINGENCIES

The Company leases office space for its corporate facilities. All leases are
classified as operating leases. The following is a schedule of the future
minimum rental payments required under operating leases

13
<PAGE>
5. COMMITMENTS AND CONTINGENCIES (CONTINUED)
that have initial or remaining noncancelable terms in excess of one year as of
December 31, 1996 (in thousands):

<TABLE>
<CAPTION>
1997................................................................. $ 87
<S> <C>
1998................................................................. 13
1999................................................................. 13
2000................................................................. 13
2001................................................................. 12
---------
Total minimum lease payments......................................... $ 138
---------
---------
</TABLE>

Lease payments charged to operations totaled $222,000, $153,000 and $80,000
for 1996, 1995 and 1994, respectively.

6. RELATED PARTY TRANSACTIONS

NOTE PAYABLE TO STOCKHOLDER

The sole stockholder of the Company advances the Company funds through notes
payable that are used for current operating and other costs and are due upon
demand. In 1994, the stockholder note payable accrued interest at a rate varying
from 7% to 9%. In January 1995, the note was amended to bear interest at a rate
of 9%. Total interest expense related to the stockholder note payable was
$21,000, $110,000 and $234,000 for 1996, 1995 and 1994, respectively.

At December 31, 1994, the Company had an outstanding stockholder note
payable of $3,069,000. The balance of the note payable was settled during 1995.
The Company paid income taxes and various expenses of the sole stockholder,
which were recorded as a reduction in the stockholder note payable balance.

In November 1996, the sole stockholder advanced the Company an additional
$1,500,000 which accrues interest at 8.5%.

7. MAJOR CUSTOMER INFORMATION

Customers which accounted for 10% or more of total revenues were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
----- ----- -----
<S> <C> <C> <C>
Customer A............................................................... 27% 72% 89%
Customer B............................................................... 18 -- --
Customer C............................................................... 16 -- --
Customer D............................................................... 15 -- --
Customer E............................................................... 10 -- --
</TABLE>

At December 31, 1996, three customers' balances accounted for 40%, 26% and
11% of accounts receivable. At December 31, 1995, one customer's balance
accounted for 73% of accounts receivable.

8. EMPLOYEE BENEFITS PLAN

The Company maintains a 401(k) plan for employees who have completed 12
consecutive months of service and during that period have worked 1,000 hours.
The Company makes matching contributions to the plan based on the amounts
contributed by eligible employees. Company contributions to the plan totaled
$264,000, $223,000 and $105,000 for 1996, 1995 and 1994, respectively.

14
<PAGE>
9. SUBSEQUENT EVENT

On June 11, 1997, the Company entered into an Agreement and Plan of
Reorganization with Tetra Tech, Inc., a Delaware corporation (the "Agreement").
The Agreement provided for the merger of the Company, along with Whalen Service
Corps Inc., with Tetra Tech, Inc. for aggregate consideration of $52,456,000.

The consideration consisted of 1,680,000 shares of Tetra Tech, Inc. common
stock with a $.01 par value ("Common Stock"), 1,231,840 shares of Tetra Tech,
Inc. Series A convertible preferred stock with a $.01 par value ("Series A
Stock") and $8,051,000 in cash.

Each share of Series A Stock will automatically be converted into one share
of Common Stock immediately upon the filing of an amendment to Tetra Tech,
Inc.'s Certificate of Incorporation which increases the number of authorized
shares of Common Stock to a number sufficient to permit the conversion of all
the outstanding shares of Series A Stock.

As part of the Agreement, on the business day prior to the merger, the
Company distributed to the stockholder (i) cash in the amount of $4,138,000 and
(ii) accounts receivable having a net value of $18,456,000.

* * * * *

15
<PAGE>
WHALEN & COMPANY, INC.
UNAUDITED BALANCE SHEETS
AS OF MARCH 31, 1997 AND DECEMBER 31, 1996

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
----------- ------------
(IN THOUSANDS, EXCEPT
SHARE AMOUNTS)
<S> <C> <C>
ASSETS

CURRENT ASSETS:
Cash and equivalents.................................................................. $ 2,260 $ 3,126
Accounts receivable, less allowance for doubtful accounts of $2,020 for each
respective period................................................................... 29,595 24,941
Prepaid expenses and other............................................................ 831 472
----------- ------------
Total current assets................................................................ 32,686 28,539
PROPERTY AND EQUIPMENT, NET............................................................. 1,015 705
OTHER ASSETS............................................................................ 180 682
----------- ------------
TOTAL................................................................................... $ 33,881 $ 29,926
----------- ------------
----------- ------------

LIABILITIES AND STOCKHOLDER'S EQUITY

CURRENT LIABILITIES:
Accounts payable...................................................................... $ 1,002 $ 1,119
Accrued employee benefits............................................................. 2,245 2,830
Other accrued liabilities............................................................. 719 509
Note payable to stockholder........................................................... 1,476 1,446
----------- ------------
Total liabilities................................................................... 5,442 5,904
----------- ------------
STOCKHOLDER'S EQUITY:
Common stock, $1 par value; 150,000 shares authorized; 100 shares issued and
outstanding......................................................................... 10 10
Retained earnings..................................................................... 28,429 24,012
----------- ------------
Total stockholder's equity.......................................................... 28,439 24,022
----------- ------------
TOTAL................................................................................... $ 33,881 $ 29,926
----------- ------------
----------- ------------
</TABLE>

See notes to financial statements.

16
<PAGE>
WHALEN & COMPANY, INC.
UNAUDITED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996

<TABLE>
<CAPTION>
THREE THREE
MONTHS MONTHS
ENDED MARCH ENDED MARCH
31, 1997 31, 1996
----------- -----------
(IN THOUSANDS)
<S> <C> <C>

NET REVENUES:
Management fees.......................................................................... $ 13,821 $ 8,993
Per-site fees............................................................................ 833 3,501
----------- -----------
Total net revenues..................................................................... 14,654 12,494
FIELD OPERATING EXPENSES................................................................... 7,470 5,312
----------- -----------
OPERATING INCOME........................................................................... 7,184 7,182
GENERAL AND ADMINISTRATIVE EXPENSES........................................................ 3,206 2,035
----------- -----------
INCOME FROM OPERATIONS..................................................................... 3,978 5,147
----------- -----------
OTHER INCOME (EXPENSE), NET:
Interest income.......................................................................... 47 87
Interest expense......................................................................... (36) (5)
Other expense, net....................................................................... (149) (157)
----------- -----------
Total other expense, net............................................................... (138) (75)
INCOME BEFORE INCOME TAXES................................................................. 3,840 5,072
STATE INCOME TAXES......................................................................... -- --
----------- -----------
NET INCOME................................................................................. $ 3,840 $ 5,072
----------- -----------
----------- -----------
</TABLE>

See notes to financial statements.

17
<PAGE>
WHALEN & COMPANY, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996

<TABLE>
<CAPTION>
THREE THREE
MONTHS MONTHS
ENDED MARCH ENDED MARCH
31, 1997 31, 1996
----------- -----------
(IN THOUSANDS)
<S> <C> <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income............................................................................... $ 3,840 $ 5,072
Reconciliation of net income to net cash provided by operating activities:
Depreciation........................................................................... (96) 58
Changes in assets and liabilities:
Accounts receivable.................................................................. (4,654) (570)
Prepaid expenses and other........................................................... (359) (30)
Other assets......................................................................... 502 --
Accounts payable..................................................................... (117) (770)
Accrued employee benefits............................................................ (585) (617)
Other accrued liabilities............................................................ 210 742
----------- -----------
Net cash (used in) provided by operating activities................................ (1,259) 3,885
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment...................................................... (238) (118)
Disposal of property and equipment....................................................... 24 --
----------- -----------
Net cash used in investing activities.............................................. (214) (118)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase of note payable to stockholder.................................................. 30 --
Contribution by stockholder.............................................................. 577 --
----------- -----------
Net cash provided by financing activities.......................................... 607 --
----------- -----------
NET CHANGE IN CASH AND EQUIVALENTS......................................................... (866) 3,767
CASH AND EQUIVALENTS, BEGINNING OF PERIOD.................................................. 3,126 783
----------- -----------
CASH AND EQUIVALENTS, END OF PERIOD........................................................ $ 2,260 $ 4,550
----------- -----------
----------- -----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest................................................................... $ 35 $ 5
----------- -----------
----------- -----------
Cash paid for income taxes............................................................... $ -- $ --
----------- -----------
----------- -----------
</TABLE>

See notes to financial statements.

18
<PAGE>
WHALEN & COMPANY, INC.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996

1. BASIS OF PRESENTATION

The accompanying balance sheet as of March 31, 1997, the statements of
income and the statements of cash flows for the three-month periods ended March
31, 1997 and 1996 are unaudited, and in the opinion of management include all
adjustments, which are of a normal recurring nature, necessary for a fair
presentation of the financial position and the results of operations for the
period presented.

The financial statements should be read in conjunction with the audited
financial statements and the notes thereto for the year ended December 31, 1996
included in the Tetra Tech, Inc. Form 8-K/A filed August 25, 1997.

The results of operations for the three-month period ended March 31, 1997
are not necessarily indicative of the results to be expected for the fiscal year
ending September 28, 1997.

2. CURRENT ASSETS

The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents. Cash equivalents
totaled $1,900,000 and $2,200,000 at March 31, 1997 and 1996, respectively.

3. RELATED PARTY TRANSACTIONS

The sole stockholder of the Company advances the Company funds through notes
payable that are used for current operating and other costs and are due upon
demand and bear interest at a rate of 9%. Total interest expense related to the
stockholder note payable was $30,000 and $0 for the three months ended March 31,
1997 and 1996, respectively.

4. SUBSEQUENT EVENT

Each share of Series A Stock will automatically be converted into one share
of common stock immediately upon the filing of an amendment to Tetra Tech,
Inc.'s Certificate of Incorporation which will increase the number of authorized
shares of Common Stock to a number sufficient to permit the conversion of all
the outstanding shares of Series A Stock. If an amendment to Tetra Tech, Inc.'s
Certificate of Incorporation is not executed by December 10, 1997, the holders
of the Series A Stock may put the Series A Stock to Tetra Tech, Inc. for cash at
the average closing price of the Company's common stock on the five days ending
one day prior to the exercise of the put.

19
<PAGE>
TETRA TECH, INC. AND WHALEN & COMPANY, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED SEPTEMBER 29, 1996

(IN THOUSANDS EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
HISTORICAL (NOTE 1)
-------------------------- PRO FORMA (NOTE 2)
TETRA TECH, WHALEN & -------------------------
INC. COMPANY, INC. ADJUSTMENTS CONSOLIDATED
----------- ------------- ----------- ------------

<S> <C> <C> <C> <C>
Gross Revenue............................................. $ 220,099 $ 56,556 $ -- $ 276,655
Subcontractor costs..................................... 59,062 -- -- 59,062
----------- ------------- ----------- ------------

Net Revenue............................................... 161,037 56,556 -- 217,593

Cost of Net Revenue....................................... 122,084 26,058 1,726 149,868
----------- ------------- ----------- ------------

Gross Profit.............................................. 38,953 30,498 (1,726) 67,725

Selling, General and Adminstrative Expenses............... 21,218 11,220 1,864 34,302
----------- ------------- ----------- ------------

Income From Operations.................................... 17,735 19,278 (3,590) 33,423

Interest Expense.......................................... 1,076 35 700 1,811
Interest Income........................................... 300 66 -- 366
Other Income (Expense), net............................... -- (74) -- (74)
----------- ------------- ----------- ------------

Income Before Income Taxes................................ 16,959 19,235 (4,290) 31,904

Income Tax Expense........................................ 6,854 385 5,892 13,131
----------- ------------- ----------- ------------

Net Income................................................ $ 10,105 $ 18,850 $ (10,182) $ 18,773
----------- ------------- ----------- ------------
----------- ------------- ----------- ------------

Net Income Per Common Share (Note 3)...................... $ 0.70 $ 1.08
----------- ------------
----------- ------------

Shares Used in Per Share Calculations (Note 3)............ 14,452 17,364
----------- ------------
----------- ------------
</TABLE>

See accompanying notes to unaudited pro forma condensed consolidated financial
statements.

20
<PAGE>
TETRA TECH, INC. AND WHALEN & COMPANY, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED JUNE 29, 1997

(IN THOUSANDS EXCEPT PER SHARE DATA)

<S> <C> <C> <C> <C>
Gross Revenue............................................. $ 171,406 $ 39,624 $ -- $ 211,030
Subcontractor costs..................................... 38,447 -- -- 38,447
----------- ------------- ----------- ------------
Net Revenue............................................... 132,959 39,624 -- 172,583
Cost of Net Revenue....................................... 100,077 26,519 (3,542) 123,054
----------- ------------- ----------- ------------
Gross Profit.............................................. 32,882 13,105 3,542 49,529
Selling, General and Administrative Expenses.............. 17,390 12,365 (960) 28,795
----------- ------------- ----------- ------------
Income From Operations.................................... 15,492 740 4,502 20,734
Interest Expense.......................................... 127 -- 525 652
Interest Income........................................... 201 -- -- 201
Other Income (Expense).................................... -- 27 -- 27
----------- ------------- ----------- ------------
Income Before Income Taxes................................ 15,566 767 3,977 20,310
Income Tax Expense........................................ 6,464 -- 1,992 8,456
----------- ------------- ----------- ------------
Net Income................................................ $ 9,102 $ 767 $ 1,985 $ 11,854
----------- ------------- ----------- ------------
----------- ------------- ----------- ------------
Net Income Per Common Share (Note 3)...................... $ 0.61 $ 0.67
----------- ------------
----------- ------------
Shares Used in Per Share Calculations (Note 3)............ 14,918 17,784
----------- ------------
----------- ------------
</TABLE>

See accompanying notes to unaudited pro forma condensed consolidated financial
statements.

21
<PAGE>
TETRA TECH, INC. AND WHALEN & COMPANY, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS)

1. PERIODS PRESENTED

On June 11, 1997, Tetra Tech, Inc. ("Tetra Tech") purchased 100% of the
capital stock of Whalen & Company, Inc. and Whalen Service Corps Inc.
(collectively, "WAC") for approximately $43,070 consisting of cash and Tetra
Tech common and preferred stock. The common and preferred stock was issued in a
private placement and had a combined value of approximately $33,304. Tetra
Tech's stock was valued based upon the extended restriction period and economic
factors specific to Tetra Tech's circumstances which resulted in a fair
valuation approximately 28% below the then prevailing market price.

The Unaudited Pro Forma Condensed Consolidated Statements of Operations have
been prepared by combining the separate historical financial statements of Tetra
Tech and WAC for the year ended September 29, 1996 and the nine months ended
June 29, 1997. The historical statements of operations for WAC included in the
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year
ended September 29, 1996 represent the results of operations for the year ended
December 31, 1996. The historical statement of operations for WAC included in
the Unaudited Pro Forma Condensed Consolidated Statement of Operations for the
nine months ended June 29, 1997 represents the results of operations for the
period October 1, 1996 through May 31, 1997. The Statement of Operations for the
period June 1, 1997 through June 29, 1997 for WAC is reflected in the historical
Condensed Consolidated Statement of Operations of Tetra Tech for the period
ended June 29, 1997.

An Unaudited Pro Forma Condensed Consolidated Balance Sheet has not been
prepared as WAC is included in the Unaudited Condensed Consolidated Balance
Sheet at June 29, 1997 for Tetra Tech, Inc. as filed in Tetra Tech's Quarterly
Report on Form 10-Q for the period ended June 29, 1997.

2. PRO FORMA ADJUSTMENTS RELATED TO THE ACQUISITION

The adjustments to Cost of Net Revenue of $1,726 and $3,542 and the
adjustments to Selling, General and Administrative Expenses of $547 and $1,947
for the year ended September 29, 1996 and the nine months ended June 29, 1997,
respectively, represent salary and bonus expense adjustments for WAC employees
and WAC's principal stockholder. Prior to the acquisition, WAC was an S
corporation and made distributions to its principal stockholder in lieu of
increased salary and bonus. Immediately prior to the acquisition, WAC declared a
one-time bonus of approximately $5,000 for certain employees as a result of
terms negotiated in the acquisition. The pro forma adjustments reflect the net
effect of the bonus that would have been recognized under Tetra Tech's
established bonus policy, net of the bonuses declared by WAC, and the terms of
the Employment Agreement between Tetra Tech and the principal stockholder for
each of the periods provided.

The adjustments to Selling, General and Administrative Expenses of $1,317
and $987 for the year ended September 29, 1996 and the nine months ended June
29, 1997, respectively, represent the amortization of intangible assets
resulting from the acquisition. The intangible assets are amortized on a
straight-line basis over thirty years.

The adjustments to Interest Expense of $700 and $263 for the year ended
September 29, 1996 and the nine months ended June 29, 1997, respectively,
represent expense on borrowings under Tetra Tech, Inc.'s existing credit
facility that relate to the acquisition of WAC. Such adjustments are based upon
the average interest rates and terms of the credit facility for the periods
presented.

The adjustments to Income Tax Expense of $4,239 and $1,992 for the year
ended September 29, 1996 and the nine months ended June 29, 1997, respectively,
represent the income tax effect of the pro forma

22
<PAGE>
adjustments (since WAC was, as indicated above, an S corporation taxpayer) and
an adjustment to reflect the consolidated effective income tax rate.

3. EARNINGS PER SHARE

The adjustments to Shares Used in Per Share Calculations of 2,912 shares and
2,866 shares for the year ended September 29, 1996 and the nine months ended
June 29, 1997, respectively, represent the number of additional shares that
would have been outstanding had the shares issued in the acquisition been
outstanding for the entire periods reflected.

The unaudited pro forma consolidated Net Income Per Common Share was
computed by dividing the pro forma consolidated Net Income by the pro forma
weighted average number of common shares and common stock equivalents
outstanding for each period.

23
<PAGE>
CERTAIN OTHER ITEMS RELATED TO THE ACQUISITION

REGISTRATION RIGHTS AGREEMENT

The shares of Common Stock and Series A Stock issued by the Company to the
Whalen Stockholders in connection with the Merger were not registered under the
Securities Act. Accordingly, such shares of Common Stock and Series A Stock are
restricted securities under the Securities Act and may not be resold or
transferred unless first registered under the federal securities laws or unless
an exemption from such registration is available.

In order to provide the Whalen Stockholders with liquidity, the Company
entered into a Registration Rights Agreement, dated as of June 11, 1997, with
the Whalen Stockholders (the "Registration Rights Agreement"). Under the
Registration Rights Agreement, the Company has agreed to file a Registration
Statement on Form S-3 providing for the sale by the Whalen Stockholders,
pursuant to Rule 415 under the Securities Act, of their shares of Common Stock
issued in connection with the Merger, including those shares issued upon
conversion of the shares of Series A Stock (collectively, the "Registrable
Securities"). The Company will use commercially reasonable efforts to cause such
Registration Statement to become effective on or before December 10, 1997 and to
keep such Registration Statement continuously effective for a period ending on
the date on which all Whalen Stockholders are eligible to sell their Registrable
Securities under Rule 144(k) (or similar successor Rule) under the Securities
Act.

In addition, in the event that the Company determines to register any shares
of Common Stock, or any securities convertible into or exchangeable or
exercisable for shares of Common Stock (other than a registration relating to
the sale of securities to employees of the Company pursuant to an employee
benefit plan or pursuant to a transaction of the type described in Rule 145
under the Securities Act), the Whalen Stockholders are entitled to include their
Registrable Securities in such registration.

AMENDMENT OF CREDIT AGREEMENT

In connection with the Merger, the Company entered into the Second Amendment
dated as of June 20, 1997 (the "Second Amendment") to its Credit Agreement dated
as of September 15, 1995 with Bank of America Illinois (as amended by the Second
Amendment, the "Credit Agreement") for the principal purpose of increasing the
revolving credit facility thereunder (the "Facility"). The Credit Agreement
currently provides for a Facility of $25,000,000, including standby letters of
credit up to a maximum amount of $10,000,000 outstanding at any one time. The
Facility is scheduled to be reduced to $20,000,000 on May 30, 1998 and to
$15,000,000 on May 30, 1999. Interest on borrowings under the Facility is
payable at the Company's option at a base rate (Federal funds rate plus 0.50% or
the bank's reference rate) as defined in the Credit Agreement or (b) at a
eurodollar rate plus a margin which ranges from 0.75% to 1.25%. Borrowings under
the Facility are secured by the stock of four of the Company's subsidiaries,
including Whalen & Company, Inc. Such subsidiaries have also guaranteed the
Company's obligations under the Credit Agreement. The Credit Agreement contains
various covenants including, but not limited to, restrictions related to
tangible net worth, net income, additional indebtedness, asset sales, mergers
and acquisitions, creations of liens, and dividends on capital stock (other than
stock dividends). The Facility matures on May 30, 2000 or earlier at the
discretion of the Company upon payment in full of loans and other obligations.
As of June 29, 1997, borrowings under the Facility totalled $8,000,000 and
outstanding letters of credit totalled $954,974.

FORMATION OF NEW SUBSIDIARIES

Immediately following the Merger, the Company formed Whalen & Company, Inc.,
a Delaware corporation ("New WhalenCo"), and Whalen Service Corps Inc., a
Delaware corporation ("New Whalen Service"), as wholly-owned subsidiaries. On
June 12, 1997, the Company transferred the former assets and liabilities of
WhalenCo to New WhalenCo, and transferred the former assets and liabilities of
Whalen Service to New Whalen Service. New WhalenCo currently engages in the
business formerly engaged in by

24
<PAGE>
WhalenCo, and New Whalen Service currently engages in the business formerly
engaged in by Whalen Service.

ACCOUNTING TREATMENT

The Merger was treated as a purchase for accounting purposes. In accordance
with purchase accounting principles, the final determination of the purchase
price and the allocation of net assets acquired was derived from the fair values
of the consideration paid and the net assets.

MARKET INFORMATION

On May 16, 1997, the business day prior to the date on which the Company
announced the letter of intent to acquire the Whalen Company, the closing price
of the Common Stock on Nasdaq was $16.25. On June 11, 1997, the closing date of
the Merger, the closing price of the Common Stock on Nasdaq was $20.00.

VOTE REQUIRED

The approval of the Amendment requires the affirmative vote of a majority of
the outstanding shares of Common Stock and Series A Stock as of the Record Date
entitled to vote on this matter at the Special Meeting. Neither an abstention
nor a broker non-vote is an affirmative vote and, therefore, both will have the
same effect as a vote against the Amendment. See "General Information."

RECOMMENDATION OF THE BOARD OF DIRECTORS

FOR ALL OF THE FOREGOING REASONS, THE BOARD BELIEVES THAT THE AMENDMENT IS
IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND UNANIMOUSLY
RECOMMENDS A VOTE "FOR" APPROVAL THEREOF. PROXIES WILL BE VOTED FOR THIS
PROPOSAL UNLESS OTHERWISE SPECIFICALLY INDICATED.

25
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS,
DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information regarding the ownership of the
Company's Common Stock as of September 1, 1997 by (i) all those persons known by
the Company to own beneficially more than 5% of the Company's Common Stock, (ii)
each director and certain executive officers of the Company, and (iii) all
executive officers and directors as a group. Except as otherwise noted, the
Company knows of no agreements among its stockholders which relate to voting or
investment power over its Common Stock.

<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
SHARES SHARES
BENEFICIALLY BENEFICIALLY
NAME OF BENEFICIAL OWNER(1) OWNED OWNED(1)
- ------------------------------------------------------------------- ----------- ---------------
<S> <C> <C>
Li-San Hwang(2).................................................... 1,119,357 6.3%
Tetra Tech, Inc.
670 N. Rosemead Blvd.
Pasadena, California 91107

Daniel A. Whalen(3)................................................ 2,911,840 16.4
Whalen & Company, Inc.
3675 Mt. Diablo Blvd.
Suite 360
Lafayette, California 94549

Pilgrim Baxter & Associates, Ltd.(4)............................... 1,450,864 8.3
Harold J. Baxter
Gary I. Pilgrim
1255 Drummers Lane
Wayne, Pennsylvania 19087

The Northwestern Mutual Life Insurance Company(5).................. 934,500 5.3
720 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202

RCM Capital Management, L.L.C.(6)
RCM Limited L.P.
RCM General Corporation............................................ 1,374,300 7.9
Four Embarcadero Center, Suite 2900
San Francisco, California 94111

Dresdner Bank AG(7)................................................ 1,374,300 7.9
Jurgen-Ponto-Platz 1
60301 Frankfurt, Germany

J. Christopher Lewis(8)............................................ 48,311 *

Patrick C. Haden(9)................................................ 13,131 *

James J. Shelton(10)............................................... 7,226 *

Thomas D. Brisbin(11).............................................. 16,232 *

Charles R. Faust(12)............................................... 39,702 *

James M. Jaska(13)................................................. 30,241 *

All directors and executive officers as a group (12 persons)(14)... 4,451,489 25.0
</TABLE>

- ------------------------

* Amount represents less than 1% of the Company's Common Stock.

26
<PAGE>
(1) Unless otherwise indicated, the persons named in the table have sole voting
and sole investment power with respect to all shares of Common Stock shown
as beneficially owned by them, subject to community property rules where
applicable and the information contained in this table and these notes.
Includes 1,231,840 shares of Common Stock issuable upon conversion of the
outstanding shares of Series A Stock. See Note(3).

(2) Excludes an aggregate of 16,415 shares of Common Stock owned by Dr. Hwang's
adult children as to which Dr. Hwang disclaims beneficial ownership.
Includes 5,468 shares issuable with respect to stock options exercisable
within 60 days after September 1, 1997.

(3) Mr. Whalen was elected a director of the Company, the Executive Vice
President--Telecommunications of the Company and the President of each of
New WhalenCo and New Whalen Service as of the effective date of the Merger.
Includes 1,185,646 shares of Common Stock issuable upon conversion of
shares of Series A Stock held by the Registrant. Also includes (i) 10,500
shares of Common Stock and 7,699 shares of Common Stock issuable upon
conversion of Series A Stock held by Daniel A. Whalen and Katharine C.
Whalen as Trustees for the MJW Whalen Trust 1997--D, (ii) 10,500 shares of
Common Stock and 7,699 shares of Common Stock issuable upon conversion of
Series A Stock held by Daniel A. Whalen and Katharine C. Whalen as Trustees
for the ACW Whalen Trust 1997--D, (iii) 10,500 shares of Common Stock and
7,699 shares of Common Stock issuable upon conversion of Series A Stock
held by Daniel A. Whalen and Katharine C. Whalen as Trustees for the MCW
Whalen Trust 1997--D, (iv) 10,500 shares of Common Stock and 7,699 shares
of Common Stock issuable upon conversion of Series A Stock held by Daniel
A. Whalen and Katharine C. Whalen as Trustees for the MJW Whalen Trust
1997--K, (v) 10,500 shares of Common Stock and 7,699 shares of Common Stock
issuable upon conversion of Series A Stock held by Daniel A. Whalen and
Katharine C. Whalen as Trustees for the ACW Whalen Trust 1997--K, and (vi)
10,500 shares of Common Stock and 7,699 shares of Common Stock issuable
upon conversion of Series A Stock held by Daniel A. Whalen and Katharine C.
Whalen as Trustees for the MCW Whalen Trust 1997--K.

(4) All information regarding share ownership is taken from and furnished in
reliance upon the Schedule 13G (Amendment No. 4), dated as of June 20,
1997, jointly filed by Pilgrim Baxter & Associates, Ltd., Harold J. Baxter
and Gary I. Pilgrim.

(5) All information regarding share ownership is taken from and furnished in
reliance upon the Schedule 13G (Amendment No. 1), dated February 7, 1997,
filed by The Northwestern Mutual Life Insurance Company.

(6) All information regarding share ownership is taken from and furnished in
reliance upon the Schedule 13G, dated February 3, 1997, jointly filed by
RCM Capital Management, L.L.C., RCM Limited L.P. and RCM General
Corporation.

(7) All information regarding share ownership is taken from and furnished in
reliance upon the Schedule 13G, dated February 7, 1997, filed by Dresdner
Bank AG. RCM Capital Management, L.L.C. is a wholly owned subsidiary of
Dresdner Bank AG.

(8) Includes 7,323 shares issuable with respect to stock options exercisable
within 60 days after September 1, 1997.

(9) Excludes an aggregate of 1,718 shares of Common Stock owned by Mr. Haden's
wife as to which Mr. Haden disclaims beneficial ownership. Includes 7,323
shares issuable with respect to stock options exercisable within 60 days
after September 1, 1997.

(10) Includes 2,344 shares held by James J. Shelton, Sarah Belle Shelton and
James J. Shelton, Jr., Trustees of the James J. Shelton and Sarah Belle
Shelton Family Trust dated August 19, 1987, and 4,882 shares issuable with
respect to stock options exercisable within 60 days after September 1,
1997.

27
<PAGE>
(11) Includes 15,937 shares issuable with respect to stock options exercisable
within 60 days after September 1, 1997.

(12) Includes 6,047 shares issuable with respect to stock options exercisable
within 60 days after September 1, 1997. Additionally, Dr. Faust's minor
children own an aggregate of 1,406 shares of Common Stock as to which Dr.
Faust disclaims beneficial ownership.

(13) Includes 29,922 shares issuable with respect to stock options exercisable
within 60 days after September 1, 1997.

(14) Includes 117,609 shares issuable with respect to stock options exercisable
within 60 days after September 1, 1997.

INDEPENDENT PUBLIC ACCOUNTANTS

Deloitte & Touche LLP, certified public accountants, is acting as the
Company's independent auditors for the fiscal year ending September 28, 1997.
The Company has been advised that Deloitte & Touche LLP is independent with
respect to the Company within the meaning of the Securities Act and the
applicable published rules and regulations thereunder. A representative of that
firm is expected to be available at the Special Meeting to respond to
appropriate questions.

OTHER MATTERS

The Board of Directors does not know of any other matters to be presented at
the Special Meeting, but, if other matters do properly come before the Special
Meeting, it is intended that the persons named as proxies in the proxy will vote
on them in accordance with their best judgment.

By Order of the Board of Directors

Richard A. Lemmon
VICE PRESIDENT AND SECRETARY

Pasadena, California
September 26, 1997

28
<PAGE>

COMMON STOCK

PROXY TETRA TECH, INC.
BOARD OF DIRECTORS

The undersigned hereby appoints Li-San Hwang and Richard A. Lemmon, or
either of them, the true and lawful attorneys and proxies of the undersigned,
with full power of substitution, to vote all shares of the Common Stock, $.01
par value ("Common Stock"), of TETRA TECH, INC. which the undersigned is
entitled to vote, at a Special Meeting of the Stockholders of TETRA TECH, INC.
to be held at the principal executive offices of TETRA TECH INC., 670 N.
Rosemead Boulevard, Pasadena, California 91107 on Tuesday, October 28, 1997 at
10:00 a.m., Pacific Time, and at any and all adjournments thereof, on the
proposals set forth below and any other matters properly brought before the
Meeting.

1. PROPOSAL TO APPROVE THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION:

/ / FOR / / AGAINST / / ABSTAIN

2. Such other matters as may properly come before the Meeting.

THE DIRECTORS RECOMMEND A VOTE FOR APPROVAL OF THE AMENDMENT TO THE
COMPANY'S CERTIFICATE OF INCORPORATION.

(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
<PAGE>
(CONTINUED FROM OTHER SIDE)

Unless a contrary direction is indicated, this Proxy will be voted FOR
approval of the Amendment to the Company's Certificate of Incorporation; if
specific instructions are indicated, this Proxy will be voted in accordance
therewith.

All proxies to vote at said Meeting or any adjournment thereof heretofore
given by the undersigned are hereby revoked. Receipt of the Notice of Annual
Meeting and Proxy Statement dated September 26, 1997 is acknowledged.

Please mark, sign, date and return this Proxy in the accompanying prepaid
envelope. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TETRA
TECH, INC.
Dated: _______________, 1997
____________________________
(Signature)
____________________________
(Signature)

Please sign exactly as your name
appears hereon. When shares are
held by joint tenants, both
should sign. When signing as
attorney, as executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation,
please sign in full corporate
name by President or other
authorized officer. If a
partnership, please sign in
partnership name by authorized
person.