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                              LAWGIBB GROUP
                              2000 Annual Report

Company Profile
As one of the world's leading  engineering,  environmental and design consulting
companies, LawGibb Group provides a wide array of multi-disciplinary services to
the industrial, commercial and government markets.

Headquartered  in  Atlanta,  the  Company's  global  network  of more than 3,500
professionals provides the technical depth and geographic diversity that enables
LawGibb to serve clients  worldwide  while  maintaining a strong local presence.
With  specialists  in  more  than 30  scientific  and  engineering  disciplines,
LawGibb's  staff  works from over 100  offices and 30  countries  with  projects
spanning 160 countries.

On the cover: Scientific Dive Team, Miami, Florida
Consisting of scientists,  including  geologists and biologists,  LAWGIBB's dive
team supports natural  resource  services such as repair and assessment of coral
reef injuries,  restoration and monitoring of damaged seagrass beds, and benthic
surveys.

SELECTED FINANCIAL DATA
(Dollars in thousands, except per share data)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
                                     2000          1999          1998          1997            1996
----------------------------------------------------------------------------------------------------
<S>                                <C>           <C>           <C>           <C>            <C>
INCOME STATEMENT DATA:
   Gross Fees                      $304,413      $293,128      $311,162      $310,791       $323,179

   Net Fees                        $263,220      $257,195      $274,920      $277,701       $286,282

   Net Income                      $ 12,146      $  8,220      $  8,422      $  4,081       $  1,910

   Earnings Per Share:
      Basic                        $   4.22      $   3.04      $   3.71      $   1.77       $   1.00

      Diluted                      $   3.20      $   2.17      $   2.77      $   1.60      $    1.00

   Cash Dividends Per Share        $     --      $     --      $     --      $     --       $    --

BALANCE SHEET DATA:
   Working Capital                 $ 48,035      $ 40,202      $ 39,060      $ 32,415       $ 28,459

   Total Assets                    $145,704      $138,831      $150,911      $145,768       $138,697

   Long Term Liabilities           $ 27,319      $ 30,104      $ 54,056      $ 54,935       $ 50,303

   Shareholders' Equity            $ 54,152      $ 46,020      $ 29,042      $ 19,341       $ 17,590
----------------------------------------------------------------------------------------------------
</TABLE>
                                                                               1
<PAGE>

Message From The Chairman

As we reflect on the year 2000, we do so with a strong sense of pride  resulting
from the hard work and commitment by our employees  throughout LAWGIBB Group. We
achieved an enormous amount this past year, and the impact our work has had upon
our clients and our  environment  is noteworthy.  Often,  we fail to realize the
immense effect that engineering and scientific  professional  services have upon
our  lives,  ranging  from  important  economic  and  environmental  issues,  to
technological advances and social concerns.

Financial Overview
The year 2000  proved to be a  successful  year for LAWGIBB  Group.  We achieved
record-level earnings in excess of $12 million, while improving net fees in both
the U.S. and in our international operations.  While reductions in our effective
income tax rate served to bolster 2000's  financial  results,  stronger net fees
per day over the  second  half of the year,  as  compared  to the  corresponding
period of 1999,  are a definite cause for optimism as we move forward into 2001.
Our balance sheet position  continues to improve,  and our debt position is also
at a record-low level.

2000 In Review
Reaching  specific  goals and adhering to our guiding  principles  made the year
2000 an exciting one for LAWGIBB.  In the U.S., we made  significant  strides in
growing our  highways and  transportation  markets.  By  expanding  our existing
service  lines,   we  won  numerous   significant   state  DOT  contracts.   The
technological revolution, which continues at an increasingly high pitch, affords
unlimited  opportunities  in  many  different  areas.  As a key  player  in  the
telecommunications  industry,  LAWGIBB  continues  to expand its  market  share,
having  doubled  revenues  in this  sector  in one year.  Our Asset  Reliability
Management  Services  (ARMS) group is expanding  rapidly,  with enormous  growth
potential based upon a vast and diverse market.  By providing  corporations with
new  avenues  to improve  their  bottom  line  through  maximizing  the value of
clients'  facilities  and  infrastructure  investments,  LAWGIBB  helps  clients
increase their return on investment.

In  our  international  operations,  the  February  2000  acquisition  of  Arcus
Engineering  Consultants  has  enhanced  our  capabilities  in the  highways and
transportation  market  sectors,  and  has  also  been  a  key  element  in  the
transformation of our South African business into one that is more reflective of
the demographics of South Africa. In the UK, our architectural  design group was
commissioned to undertake the architectural,  mechanical,  electrical, civil and
structural  design of the new air traffic  control  center located in Prestwick,
Scotland. The "Scottish Eye on the Sky," as it is known, will handle air traffic
control for a 650,000 square mile area covering Scotland and the North Atlantic.
Additionally, new Runway Friction Analysis System software, which had been under
development  for five years,  was launched by our Airports  group in conjunction
with the UK Civil Aviation Authority's requirements.

2
<PAGE>

Looking Ahead
Our primary  emphasis for 2001  continues  to be to meet our  clients'  needs by
understanding  and addressing  their issues and concerns and to respond to these
needs with the expertise and seasoned  experience of our team of  professionals.
Moreover,  we will focus upon services that greatly impact people's  lives,  the
environment, and the infrastructure of our communities.

We view the growing  importance of water  resources  management to be a critical
area, not only for the immediate  future,  but also over the long-term.  Federal
regulations,  such as EPA's Clean Water and Safe Drinking  Water Acts,  Phase II
Stormwater Rule, and HUD's Real Estate Assessment  Center program,  are creating
opportunities across many of our business lines.

Additionally,  the  immense  potential  benefits  of  both  fiber  and  wireless
telecommunications systems improvements and expansion, the impact of an improved
highway and road transportation  network,  and the value-added  contributions of
our strategic facilities  management program services all represent  significant
and essential services to our clients.

Through the Internet, we are afforded unlimited opportunities to improve the way
we market,  contract,  execute,  bill and  collect for our  services.  LAWGIBB'S
software  and  IT  consulting  services  division,   NexDSS,  is  positioned  to
capitalize  on these  opportunities  by  developing  and  implementing  software
products designed to help our clients manage their assets through leveraging the
Internet and other IT tools, to enhance the value of our service offerings.

Closing
As we move through 2001, our  perspective is clear and our path is well defined.
We have  succeeded  in building a solid base for growth and  profitability,  and
through  the  consistent,  determined  efforts  of our  LAWGIBB  team,  we are a
world-class player in our industry.  Our commitment to the LAWGIBB employees who
are responsible for our success remains strong.  Our corporate  vision-to be the
preeminent  provider of engineering,  environmental,  and construction  services
worldwide-serves  as a motivator  to us all and will  continue to guide us as we
move forward through the new millennium.


Bruce C. Coles                                                   [IMAGE]
Chairman, President, and Chief Executive Officer
                                                                               3
<PAGE>


IMPACT on life
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While the most basic life-sustaining  elements are directly impacted by the work
of the engineering  profession,  other endeavors such as leisure,  cultural, and
entertainment activities that enrich the quality of human existence also benefit
from our industry's efforts.

The work performed by LAWGIBB professionals impacts everything from the water we
drink and the roads on which we drive,  to the  cultural  resources we treasure.
Engineering expertise is required to provide an adequate and safe water supply .
 . . to avert danger from natural  disasters by ensuring seismic  stability . . .
to protect human health and safety through risk  management . . . to enhance the
transportation  infrastructure  through  the  design  and  construction  of safe
highways and bridges . . . to build venues for  entertainment,  sporting events,
and  shopping . . . to preserve  historic and  cultural  symbols and  monuments.

LAWGIBB's impact on life in 2000 included  ensuring indoor air quality safety on
the set of a major  motion  picture  production;  developing  a water supply and
sewage treatment  network to support tourism in Turkey;  providing  geotechnical
and  construction  quality  assurance  consulting  for new baseball and football
venues throughout the U.S.; and developing an early-warning system to save lives
in the event of a catastrophic failure of a natural dam in Tajikistan.
                                                                               5

IMPACT on environment
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Environmental consultants perform critical functions in maintaining the delicate
balance between man and his surroundings . . . meeting the seemingly conflicting
needs for development and  preservation,  business growth and natural  resources
protection.

The  environmental  engineers  and  scientists  at LAWGIBB  directly  impact the
environment  through the restoration  and protection of land,  air,  water,  and
life.  The  Company is  engaged in  preserving  wetlands . . .  identifying  and
removing  hazardous  materials . . .  redeveloping  contaminated  property . . .
protecting  endangered  species . . . minimizing  impacts of construction on the
water supply by controlling  stormwater runoff . . . improving air quality . . .
managing  health and safety  risks . . . ensuring  regulatory  compliance  . . .
educating others about environmental responsibility.

LAWGIBB's impact on the environment in 2000 included assessing  lead-based paint
contamination  in public  housing;  performing  coral reef  injury  assessments;
conducting   stormwater   monitoring  and  research  for  state  departments  of
transportation;  studying  the  environmental  impact of  snowmobile  use in our
national parks; and developing customized  information tracking software to help
a  major  industrial   manufacturer   maintain  compliance  with  OSHA  and  EPA
requirements.

                                                                               7

<PAGE>

IMPACT on business
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To succeed in today's business environment, companies are challenged to adapt at
a rapid pace to constantly evolving  technology,  fierce  competition,  and high
expectations. From operational and cost efficiency of facilities, electronic and
web-based information management solutions, to improving  infrastructure for the
transportation  of people and  products,  LAWGIBB's  services  give  clients the
competitive edge necessary for their survival.

LAWGIBB's impact on business in 2000 included constructing thousands of wireless
communication towers; replacing a 13,000-foot asphalt runway at an international
airport with teams operating  around-the-clock  to minimize travel  disruptions;
designing  a  custom  software  application  for a study  that  resulted  in the
creation of a 40-year capital replacement reserve analysis for all facilities of
a county government;  developing an ISO 14001 program for major automotive parts
suppliers to meet their clients' new requirements;  conducting a strategic study
of a proposed  multi-modal  freight terminal in Tashkent,  Uzbekistan to promote
economic development;  providing consulting and advisory services related to the
implementation  of railway  privatization  efforts in  Estonia;  and  delivering
innovative  new services  through the  company's  Asset  Reliability  Management
Services  group that  provide  clients with new avenues to maximize the value of
their physical asset investments.

                                                                               9

IMPACT on education
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LAWGIBB  impacts  education in myriad ways,  from  inspecting  and improving the
facilities in which our children are taught, to providing informed  professional
expertise regarding a variety of public interest issues, and offering continuing
education opportunities for its own employees.

The Company's involvement in education extends to all ages and walks of life. In
2000,  LAWGIBB  partnered  with a  university  in the  United  Kingdom  to offer
engineering  students a course of lectures  specific  to the  railway  industry.
Individual  offices host annual Career Days and employ co-op  students to expose
young minds to the engineering  profession.  In the UK, the Company hosted local
educational  programs,  such as a student  engineering  challenge where students
were given the opportunity to design,  build and test a model tower crane. Also,
in the UK, the Company  manages the Mars Award  competition  which provides cash
prizes  to  local  schools  for   demonstrating   environmental   awareness  and
responsibility.  An annual competition for the best technical paper written by a
LAWGIBB  employee  encourages  continuing  education and research.  A Stormwater
Management  Master  Plan  for a  Florida  community  was  presented  in a public
workshop.  Roof  consulting  and  protective  coating  services  were  performed
countywide for a school board in Florida.

                                                                              11

<PAGE>

IMPACT on technology
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The  technological  revolution  continues  to evolve and change the way in which
business is conducted. LAWGIBB's commitment to continuous process improvement is
inherent in the advanced systems and solutions it generates for clients.

Innovations  in equipment,  as well as  methodologies  for  performing  multiple
functions in sampling,  testing,  remediation,  and construction,  were critical
areas of  concentration  for the  Company.  By using direct push  technology  to
install  micro-wells for collecting soil and  groundwater  samples,  LAWGIBB can
make on-site decisions  without having to wait for analytical lab results,  thus
saving clients time and money.

In  2000,  LAWGIBB'S  software  and IT  consulting  services  division,  NexDSS,
developed  FaMis, a software  program  providing  cutting-edge,  technologically
advanced  solutions to assist  clients in assessing and managing  their physical
asset investments.  LAWGIBB was selected as independent  engineering  consultant
for the Government  Communications  Headquarters New Accommodation Project (NAP)
to replace  archaic  buildings  in  Cheltenham,  UK with a highly  sophisticated
facility designed for high-level  national  security and intelligence  gathering
challenges.  The Company  implemented a Digital  Pavement  Analysis  system that
provides  high-speed  data collection  capability for the evaluation,  analysis,
design, and rehabilitation of pavement systems.

                                                                              13

<PAGE>

Management's Discussion and Analysis

The following is  management's  discussion  and analysis of certain  significant
factors that have affected the results of operations and financial  condition of
LAWGIBB  Group,  Inc. (the  "Company")  for the periods  indicated.  The Company
measures its operating performance on the basis of net fees, since a substantial
portion of gross fees are a pass-through  to clients as costs of  subcontractors
and other project-specific  outside services. The following table sets forth the
percentage of net fees  represented by certain items  reflected in the Company's
consolidated  statements of income and the percentage increase (decrease) in the
underlying  dollar  amounts  of each of these  items from the prior  year.  This
discussion  should  be read  in  conjunction  with  the  Company's  consolidated
financial statements and accompanying notes.

On February 13, 2001, the Company and Jacobs Engineering Group, Inc.  ("Jacobs")
announced  that they had  signed a letter  of intent to sell Gibb  International
Holdings,  Inc., the Company's international operating subsidiary,  to Jacobs. A
due diligence  review is being  performed and a decision is expected  during the
second quarter of 2001.
<TABLE>
<CAPTION>

RESULTS OF OPERATIONS
                                                                         Year to Year Dollar
                                        Year Ended December 31,           Increase (Decrease)
                                  2000         1999        1998      2000 vs. 1999     1999 vs. 1998
                               ----------- ----------- ----------- -----------------  ---------------
<S>                            <C>         <C>         <C>         <C>                <C>

Net Fees                          100.0%       100.0%     100.0%         2.3%             (6.4%)

Gross Profit                       57.9%        58.6%      58.6%         1.2%             (6.5%)

Indirect Costs and Expenses        51.8%        51.8%      51.7%         2.3%             (6.3%)

Operating Income                    6.1%         6.8%       6.9%        (7.3%)            (8.2%)

Net Income                          4.6%         3.2%       3.1%        47.8%             (2.4%)

</TABLE>

Comparison of 2000 and 1999
The  Company's  net income for 2000  increased  47.8% over 1999 or $3.9 million.
This  improvement was the result of a growth in net fees, a decrease in interest
expense and a reduction in income tax expense.

Consolidated  net fees for 2000  increased  2.3% to $263.2  million  from $257.2
million in 1999.  Net fees  increased for the U.S.  Operations by 1.6% to $173.0
million  from  $170.3  million  in 1999.  The U.S.  Operations  net fees  showed
improvement for each  consecutive  quarter starting with the 4th quarter of 1999
as project wins began producing revenue. The International  Operations increased
net fees from  $86.9  million  in 1999 to $90.2  million  or 3.8% in 2000.  This
increase was  attributable  to the  improved  performance  in European  markets,
concentrated  regionalization  efforts which placed LAWGIBB  locations closer to
clients and the start-up of projects that were delayed in 1999.

The  consolidated  gross profit margin  decreased from 58.6% in 1999 to 57.9% in
2000. The U.S.  Operations  gross profit margin  decreased from 64.0% in 1999 to
63.1% in 2000. The increase in direct payroll cost was caused by the tight labor
market in securing top quality professionals. The International Operations gross
profit  margin  decreased  slightly  from  48.1%  in  1999  to  47.9%  in  2000.
Consolidated indirect costs and expenses remained constant with 1999 at 51.8% of
net fees. The Company  continuously  monitors costs and the effectiveness of the
cost containment initiatives implemented over the past several years.

<PAGE>

Consolidated  operating  income  decreased by 7.3% to $16.2 million in 2000 from
$17.5 million in 1999.  The U.S.  Operations  income  decreased  $2.9 million to
$13.4  million in 2000 from $16.3  million in 1999.  The $2.9  million  decrease
includes $1.0 million of incentive plan expense and $0.7 million in professional
fees related to research  and  development  tax  credits,  neither of which were
present in 1999.  Additional  increased  costs  resulted  from  recruitment  and
relocation of professional staff. The International  Operations income increased
to $2.8 million in 2000 from $1.2 million in 1999. The improvement is due to the
start-up of the projects delayed in 1999.

Interest  expense  decreased  55.3% from $3.2 million in 1999 to $1.4 million in
2000.  The  decrease  is due to the  reduction  in the  Company's  average  debt
balances from $36.1 in 1999 to $22.4 in 2000.

In 2000, income tax expense decreased 56.0% or $3.3 million. The decrease in tax
expense resulted from the realization of a tax benefit  attributable to research
and development tax credits and adjustment of tax account balances.

In 2000,  the  Company  recorded  net income of $12.1  million  compared to $8.2
million in 1999.  Earnings per common share for 2000 were $4.22 per common share
- basic ($3.20 per common share - diluted)  compared to $3.04 per common share -
basic ($2.17 per common share - diluted ) in 1999.

14

<PAGE>

Comparison of 1999 and 1998
The Company  improved  its net income  margin in 1999 to its highest  level in 8
years (at 3.2% of net fees),  although net fees fell short of 1998  levels.  The
Company achieved this improvement  through continued  effective programs of cost
containment  and cash  management.  The  Company  believes  these  programs  are
significant in maintaining  profitability as markets are pursued to generate fee
growth.

Consolidated  net fees for 1999  decreased  6.4% to $257.2  million  from $274.9
million in 1998. This decrease, however, reduced net income by only $0.2 million
(to $8.2 million)  compared to 1998's net income of $8.4  million.  Net fees for
the U.S.  Operations  decreased to $170.3 million in 1999, or 5.0%,  from $179.3
million in 1998.  The primary factor leading to this reduction was a decision to
exit  certain  high-risk  markets  where the  Company  believed it was not being
compensated relative to the risks undertaken. The International Group's net fees
decreased to $86.9 million in 1999, or 9.1% from $95.6 million in 1998. Two main
issues are behind this decrease.  First, delayed startup of certain projects due
to an earthquake in Eastern Europe and other client delays  produced  reductions
in net fees.  The delayed  projects are expected to commence in future  periods.
Second, a broad reduction in South African  government-funded  projects severely
impacted net fees from this  segment of  International  Operations.  The Company
believes  that it has taken  appropriate  steps to position  itself ahead of its
competitors  when  the  South  African  economic   conditions  improve  and  its
government project funding increases.

The  consolidated  gross profit margin remained  constant at 58.6% for 1999. The
U.S.  Operations'  gross profit margin decreased  slightly from 64.3% in 1998 to
64.0% in 1999.  The  decrease  is  generally a result of  increased  competitive
pressures  in some of the U.S.  markets.  The  International  Operations'  gross
profit  margin  improved  from  47.7% in 1998 to  48.1%  in  1999.  Consolidated
indirect  costs and  expenses  were  $133.2  million in 1999  compared to $142.2
million in 1998. This decrease of $9.0 million,  or 6.3%, is attributable to the
continued  positive impact of the Company's cost reduction and cost  containment
initiatives.

Consolidated  operating  income  decreased by 8.2% to $17.5 million in 1999 from
$19.0 million in 1998. The U.S.  Operations'  operating  income margin  improved
from 8.4% in 1998 to 9.6% in 1999, while the International Operations' operating
income  margin  decreased  from 4.2% in 1998 to 1.4% in 1999.  The nature of the
U.S.  Operations  and its 1999 net fee  challenges  allowed  it to  aggressively
reduce costs in tandem with net fee reductions,  thereby improving its operating
margin. The longer-term  project nature of the International  Operations and the
project  delays  it  experienced  necessitated  maintaining  certain  labor  and
indirect costs in anticipation of project startups.

Interest  expense  decreased  27.0% from $4.4 million in 1998 to $3.2 million in
1999, as a result of reducing revolving and long-term debt by $25.7 million from
1998 to 1999.  The  significant  debt  reduction was partially a result of $11.7
million in proceeds  received from the exercise of stock options (See  Financial
Condition  discussion).  Additionally,  improved cash flows from operations were
used to reduce outstanding debt balances, resulting in lower interest expense.

In 1999,  the  Company  recorded  net income of $8.2  million  compared  to $8.4
million in 1998. The effective tax rate decreased from 43.8% in 1998 to 41.9% in
1999.  This  decrease  was  primarily  attributable  to  changes  in  items  not
deductible  for tax purposes.  Earnings per common share for 1999 were $3.04 per
common share - basic  ($2.17 per common  share - diluted)  compared to $3.71 per
common share - basic ($2.77 per common share - diluted) in 1998.

                                                                             15
<PAGE>

FINANCIAL CONDITION

The increase in net income which contributed  positively to the cash provided by
operating  activities  was  offset by a  significant  increase  in  Billed  Fees
Receivable  and  Unbilled  Work in  Progress.  Revenue  growth  in 2000 has lead
directly to the  increased  balances.  As a result,  cash provided by operations
decreased in 2000 to $3.1 million from $16.5 million in 1999.

Capital  expenditures  for 2000 were $4.1 million,  which represents an increase
from 1999 of $1.2  million.  In order to  continue to enhance  productivity  and
potentially increase earnings, the Company has continued, and will continue, its
capital    spending    programs,    particularly    for   computer   and   other
technology-related  equipment.  The Company  believes  that the limit of capital
spending  imposed by its credit  facility of $7.0 million per year is sufficient
to meet foreseeable requirements.  The Company has no other material commitments
for purchases of additional equipment.

The Company reported debt and short-term borrowings of $21.4 million at December
31,  2000,  compared to $22.8  million at the end of 1999.  Debt and  short-term
borrowings as a percentage of total capitalization improved to 25.0% at December
31, 2000, compared to 28.9% at December 31, 1999.

The Company  maintains one primary credit facility with a global bank. (See Note
4  to  the  Consolidated  Financial  Statements.)  The  credit  facility  has  a
three-year  term and two  one-year  extension  options,  both of which have been
exercised to extend the maturity date to January 15, 2003.  The credit  facility
contains  certain   restrictions  which,  among  other  things,   limit  capital
expenditures;  require minimum earnings before interest, taxes, depreciation and
amortization;  and specify  achievement  of certain  leverage  and fixed  charge
ratios.  In  addition,  cash  dividends  on  common  stock are  prohibited.  The
repurchase of shares for cash or notes is restricted and payments on existing or
future  notes  payable  to  shareholders  are  permitted,   subject  to  certain
limitations.  The facility is secured by substantially  all of the assets of the
Company's United States and United Kingdom operating subsidiaries.

On May 6, 1997,  the  shareholders  of the  Company  authorized  and  approved a
transaction  between the Company and Virgil R.  Williams and James M.  Williams,
Jr., each a director of the Company (collectively, the "Investors"), pursuant to
which the  Company  sold to the  Investors  (including,  in the case of James M.
Williams, Jr., a family partnership that he controls) a combination of Preferred
Stock,  Common Stock  warrants,  and options to purchase  shares of Common Stock
(the "Options").  The Options are eligible to be exercised in various quantities
and at various prices through December 31, 2006. On June 25, 1998, the Investors
exercised  options to purchase an aggregate of 175,000  shares of the  Company's
Common  Stock at an  exercise  price of $16.50 per share.  The  proceeds of $2.9
million  received by the Company were invested in  initiatives to further reduce
real estate and insurance  costs as well as fund  improvements in technology and
increased  sales and  marketing  activities.  On June 30,  1999,  the  Investors
exercised their remaining  Options to purchase an aggregate of 584,028 shares of
the  Company's  Common  Stock at an  exercise  price of $20.00  per  share.  The
proceeds  of $11.7  million  received by the  Company  were  invested to further
enhance the capital  structure  and  financial  position  of the  Company.  As a
result,  there are no remaining  Options held by the  Investors  under the above
transaction. The agreement also includes an option granted to the holders of the
preferred  stock for the right to purchase up to 132,450  shares of common stock
for an average price of $13.19 per share.  These options are exercisable only in
conjunction  with  exercises  by holders of options  under the  Company's  Stock
Option Plan.

16

<PAGE>

Market  Risks
The Company is exposed to various  types of market risks in the normal course of
business,  including  the impact of interest  rate changes and foreign  currency
exchange rate fluctuations.  Based on the Company's debt profile at December 31,
2000 and December 31,  1999, a 1% increase in market  interest  rates would have
increased   interest  expense  and  decreased  income  before  income  taxes  by
approximately  $84,000 and  $71,000,  respectively.  The  Company  does not hold
derivative  instruments for trading  purposes.  As part of its foreign  exchange
risk  management  strategy,  the  Company  occasionally  borrows  funds  in  the
appropriate  local currency where debt financing is required to support  foreign
operating  activities,  resulting  in a  reduction  in exchange  rate risk.  The
Company  typically  does not  employ  derivative  instruments  for  purposes  of
managing foreign currency  exchange rate risk and as a result,  could be exposed
to the risk that certain  revenue and cost  transactions  originated  in foreign
currencies  may be  realized  at  different  exchange  rates  than  those  which
historically  had been in effect.  The primary  foreign  currencies in which the
Company has exchange rate risk are pound  sterling,  South African rand, and the
euro.

Due to the increased  strength of the U.S. dollar relative to the pound sterling
and the South African rand,  the foreign  currency  translation  adjustment  has
doubled from $1.3 million at December 31, 1999,  to $2.6 million at December 31,
2000.  This number is  reflected in the  Accumulated  Other  Comprehensive  Loss
section of the Consolidated  Statement of Shareholders'  Equity. Even though the
relative  strength of the  currencies  has changed in 2000, the Company does not
believe that these risks represent a material exposure to its financial position
or results of operations.

Forward  Looking  Statements
This Annual Report contains  "forward-looking  statements" within the meaning of
the  Private  Securities  Litigation  Reform  Act of 1995  which  represent  the
Company's  expectations  or beliefs.  These  statements by their nature  involve
substantial risks and  uncertainties,  certain of which are beyond the Company's
control. The Company cautions that various factors,  including,  but not limited
to, the factors  described  in the  Company's  filings with the  Securities  and
Exchange  Commission  (the  "Commission"),  the  uncertain  timing of awards and
contracts, increasing competition by foreign and domestic competitors as well as
general  economic and regulatory  conditions in each of the  geographic  regions
served by the Company and  industry  trends,  and other risks could cause actual
results  or  outcomes  to  differ   materially   from  those  expressed  in  any
forward-looking statements.

                                                                              17
<PAGE>

CONSOLIDATED BALANCE SHEETS
LawGibb Group, Inc.
(Dollars in thousands, except share and per share amounts)

<TABLE>
<CAPTION>
        AT DECEMBER 31,                                                              2000            1999
-----------------------------------------------------------------------------------------------------------
<S>                                                                               <C>             <C>
ASSETS
        Cash and Cash Equivalents                                                 $   6,966       $  11,612
        Billed Fees Receivable, net                                                  66,633          56,274
        Unbilled Work in Progress                                                    30,382          26,853
        Other Receivables                                                             1,130           1,119
        Deferred Income Taxes                                                         4,415           3,866
        Prepaid Expenses                                                              2,742           3,185
                                                                                  ---------       ---------
           Current Assets                                                           112,268         102,909
        Property and Equipment, net                                                  14,532          16,350
        Equity Investments                                                            1,239           2,132
        Intangible Assets, net                                                       11,692          12,270
        Other Assets, net                                                             5,973           5,170
                                                                                  ---------       ---------
           Total Assets                                                           $ 145,704       $ 138,831
                                                                                  =========       =========

-----------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
        Short-Term Borrowings                                                     $   1,576       $   1,213
        Accounts Payable                                                             15,960          13,870
        Billings in Excess of Costs and Fees Earned on Contracts in Progress         17,475          16,537
        Accrued Payroll and Other Employee Benefits                                   7,195           6,143
        Accrued Professional Liability Reserve                                        2,131           2,534
        Other Accrued Expenses                                                       11,935          13,052
        Income Taxes Payable                                                          3,531           4,809
        Current Portion of Long-Term Debt                                             4,430           4,549
                                                                                  ---------       ---------
           Current Liabilities                                                       64,233          62,707

        Long-Term Debt                                                               15,341          16,995
        Deferred Income Taxes                                                         1,917           3,026
        Minority Interest in Equity of Subsidiaries                                     132             176

        Cumulative Convertible Redeemable Preferred Stock -
           963,398 Shares Issued and Outstanding                                      9,929           9,907

        Common Stock - $1 par value, 10,000,000 shares authorized,
           2,613,878 and 2,615,605 Shares Issued and Outstanding                      2,614           2,616
        Additional Paid-In Capital                                                   28,866          28,984
        Retained Earnings                                                            33,580          22,703
        Accumulated Other Comprehensive Loss                                        (10,908)         (8,283)
                                                                                  ---------       ---------
           Total Shareholders' Equity                                                54,152          46,020
                                                                                  ---------       ---------
           Total Liabilities and Shareholders' Equity                             $ 145,704       $ 138,831
                                                                                  =========       =========
</TABLE>

See Accompanying Notes.

18

<PAGE>

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
LawGibb Group, Inc. (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
          YEAR ENDED DECEMBER 31,                            2000            1999            1998
---------------------------------------------------------------------------------------------------
<S>                                                        <C>             <C>             <C>
         Gross Fees                                        $304,413        $293,128        $311,162
         Less: Cost of Outside Services                      41,193          35,933          36,242
                                                           --------        --------        --------
         Net Fees                                           263,220         257,195         274,920

         Direct Costs and Expenses:
            Payroll                                          80,077          78,055          81,160
            Job-Related Expenses                             30,715          28,496          32,591
                                                           --------        --------        --------
         Gross Profit                                       152,428         150,644         161,169

         Indirect Costs and Expenses:
            Payroll                                          62,364          60,823          62,474
            Other Expenses                                   73,878          72,364          79,688
                                                           --------        --------        --------
         Operating Income                                    16,186          17,457          19,007

         Other Income (Expense):
            Interest Expense                                 (1,423)         (3,186)         (4,365)
            Deferred Financing Costs                            (56)            (84)           (141)
            Other Income (Expense)                              (33)            (71)            197
                                                           --------        --------        --------
         Income Before Income Taxes
            and Equity Investments                           14,674          14,116          14,698
         Income Tax Provision                                (2,608)         (5,919)         (6,432)
         Equity Investments                                      80              23             156
                                                           --------        --------        --------
         Net Income                                          12,146           8,220           8,422

         Less: Preferred Stock Dividend and Accretion        (1,128)         (1,128)         (1,128)
                                                           --------        --------        --------
         Net Income Available to Common Shareholders       $ 11,018        $  7,092        $  7,294
                                                           ========        ========        ========

         Earnings Per Common Share - Basic                 $   4.22        $   3.04        $   3.71
                                                           ========        ========        ========

         Earnings Per Common Share - Diluted               $   3.20        $   2.17        $   2.77
                                                           ========        ========        ========

COMPREHENSIVE INCOME

         Net Income                                        $ 12,146        $  8,220        $  8,422
         Other Comprehensive Income:
            Foreign Currency Translation Adjustment          (2,625)         (1,302)           (638)
                                                           --------        --------        --------
         Comprehensive Income                              $  9,521        $  6,918        $  7,784
                                                           ========        ========        ========
</TABLE>

See Accompanying Notes.

                                                                              19
<PAGE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
LawGibb Group, Inc. (Dollars in thousands)

<TABLE>
<CAPTION>
              Year Ended December 31,                                2000           1999           1998
--------------------------------------------------------------------------------------------------------
<S>                                                                <C>                <C>        <C>
Common Stock
              Balance at Beginning of Year                           2,616          2,046          1,872
              Issuance of Common Stock                                  --             --             21
              Repurchase and Retirement of Common Stock                (26)           (18)           (22)
              Exercise of Options to Purchase Common Stock              24            588            175
                                                                   -------        -------        -------
              Balance at End of Year                                 2,614          2,616          2,046

Additional Paid-In Capital
              Balance at Beginning of Year                          28,984         18,046         14,957
              Issuance of Common Stock                                  --             --            558
              Repurchase and Retirement of Common Stock               (496)          (185)          (182)
              Exercise of Options to Purchase Common Stock             378         11,123          2,713
                                                                   -------        -------        -------
              Balance at End of Year                                28,866         28,984         18,046

Retained Earnings
              Balance at Beginning of Year                          22,703         15,931          8,855
              Net Income                                            12,146          8,220          8,422
              Preferred Stock Dividends                               (800)          (800)          (800)
              Preferred Stock Accretion                               (328)          (328)          (327)
              Repurchase and Retirement of Common Stock               (141)          (320)          (219)
                                                                   -------        -------        -------
              Balance at End of Year                                33,580         22,703         15,931

Accumulated Other Comprehensive Income
              Balance at Beginning of Year                          (8,283)        (6,981)        (6,343)
              Foreign Currency Translation Adjustment               (2,625)        (1,302)          (638)
                                                                   -------        -------        -------
              Balance at End of Year                               (10,908)        (8,283)        (6,981)

                                                                   -------        -------        -------
Total Shareholders' Equity                                         $54,152        $46,020        $29,042
                                                                   =======        =======        =======
</TABLE>

See Accompanying Notes.

20
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
LawGibb Group, Inc. (Dollars in thousands)

<TABLE>
<CAPTION>
           Year Ended December 31,                                       2000           1999          1998
-----------------------------------------------------------------------------------------------------------
<S>                                                                    <C>            <C>           <C>
Operating Activities:
          Net Income                                                   $12,146        $ 8,220       $ 8,422
          Adjustments to Reconcile Net Income to
             Net Cash Provided by Operating Activities:
                Depreciation and Amortization                            6,230          6,604         6,724
                Financing Costs Amortization                                56             84           141
                Provision for Losses on Receivables                        369            603           731
                Deferred Income Taxes                                   (1,658)           251        (3,320)
                Undistributed Earnings From
                   Equity Investments                                      (80)           (23)         (156)
                Loss on Disposal of Property and Equipment                 112             93           205
          Changes in Operating Working Capital Assets and
             Liabilities, net of Effects of Business Acquisitions      (14,037)           705        (6,380)
                                                                       -------        -------       -------
          Net Cash Provided by Operating Activities                      3,138         16,537         6,367

Investing Activities:
          Business Acquisitions, net of Cash Acquired                     (437)            --          (187)
          Purchases of Property and Equipment                           (4,105)        (2,854)       (6,635)
          Proceeds from Disposal of Property and Equipment                 120          3,889           120
          Other, net                                                    (1,651)        (1,404)       (1,903)
                                                                       -------        -------       -------
          Net Cash Used in Investing Activities                         (6,073)          (369)       (8,605)

Financing Activities:
          Net Proceeds on Short-Term Borrowings                            642            337           182
          Net Proceeds (Payments) on Revolving Line of
             Credit and Long-Term Borrowings                              (983)       (25,560)        2,701
          Deferred Financing and Preferred Stock Issuance Costs             --             --          (369)
          Repurchase and Retirement of Common Stock                       (243)          (523)         (423)
          Preferred Dividends Paid                                        (800)          (800)         (800)
          Exercise of Options to Purchase Common Stock                      23         11,711         2,888
                                                                       -------        -------       -------
          Net Cash (Used in) Provided by Financing Activities           (1,361)       (14,835)        4,179

          Effect of Exchange Rate Changes on Cash                         (350)          (743)         (446)
                                                                       -------        -------       -------
          (Decrease) Increase in Cash and Cash Equivalents              (4,646)           590         1,495
          Cash and Cash Equivalents at Beginning of Year                11,612         11,022         9,527
                                                                       -------        -------       -------
          Cash and Cash Equivalents at End of Year                     $ 6,966        $11,612       $11,022
                                                                       =======        =======       =======
</TABLE>

See Accompanying Notes.

                                                                              21

<PAGE>


Notes to Consolidated Financial Statements
Years Ended December 31, 2000, 1999, and 1998,  LawGibb Group,  Inc. (Dollars in
thousands, except share and per share amounts)
--------------------------------------------------------------------------------
1. Accounting Policies

Description   of  Business  -  LAWGIBB   Group,   Inc.   and  its   subsidiaries
(collectively,   the  "Company")   provide   comprehensive   environmental   and
specialized  engineering  consulting services to governmental,  commercial,  and
industrial entities.

Basis of  Presentation  - The  consolidated  financial  statements  include  the
accounts  of  LAWGIBB  Group,  Inc.  and  its   subsidiaries.   All  significant
intercompany accounts and transactions are eliminated.

Use of Estimates - The  preparation  of the  financial  statements in conformity
with  accounting  principles  generally  accepted in the United States  requires
management to make estimates and assumptions that affect the amounts reported in
the financial  statements and  accompanying  notes.  Actual results could differ
from those estimates.

Revenue  Recognition - In general,  the Company recognizes  revenues at the time
services are performed. On cost-reimbursable contracts, revenue is recognized as
costs are  incurred,  and  includes  applicable  fees  earned  through  the date
services are provided. On fixed-price contracts, revenues are recorded using the
percentage-of-completion   method  of  accounting  by  relating  contract  costs
incurred to date to total estimated contract costs at completion. Contract costs
include  both direct and  indirect  costs.  Contract  losses are provided for in
their  entirety  in  the  period  they  become  known,  without  regard  to  the
percentage-of-completion.  Some of the Company's contracts with the U.S. federal
government,  as well as certain contracts with commercial clients,  provide that
contract costs  (including  indirect costs) are subject to audit and adjustment.
For all such  contracts,  revenues have been  recorded  based upon those amounts
expected to be realized upon final settlement.

Derivatives  - On January 31, 2000,  the Company  received  $0.5 million for the
early  termination of its interest rate swap  agreement.  The termination of the
interest rate swap was done to take advantage of favorable interest rate markets
as well as reduced interest rate exposure from lower  outstanding debt balances.
The Company recognized a gain of $0.3 million in the year 2000 and the remaining
$0.2 million will be recognized over the next two years. The Company  previously
entered  into the  interest  rate swap  agreement  to  synthetically  manage the
interest rate characteristics of its outstanding debt and to partially limit the
Company's exposure to rising interest rates. Amounts to be received or paid as a
result of this  agreement  were  accrued  and  recognized  as an  adjustment  to
interest   expense  related  to  the  designated   debt.  Gains  and  losses  on
terminations  of interest rate swap  agreements are deferred as an adjustment to
the carrying  amount of the  outstanding  debt and amortized as an adjustment to
interest  expense  related to the debt over the  remaining  term of the original
contract  life of the  terminated  swap  agreement.  In the  event of the  early
extinguishment of a designated debt obligation,  any realized or unrealized gain
or loss  from the  swap  would  be  recognized  in  income  coincident  with the
extinguishment gain or loss.

In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
as amended,  Accounting for Derivative  Instruments and Hedging Activities (SFAS
133),  which is required to be adopted in years  beginning  after June 15, 2000.
The  Company  will  adopt the new  Statement  effective  January  1,  2001.  The
Statement  will require the Company to recognize all  derivatives on the balance
sheet at fair  value.  Derivatives  that are not hedges must be adjusted to fair
value through income.  If the derivative is a hedge,  depending on the nature of
the  hedge,  changes  in the fair  value of  derivatives  will  either be offset
against  the  change in fair value of the hedged  assets,  liabilities,  or firm
commitments through earnings or recognized in other  comprehensive  income until
the  hedged  item is  recognized  in  earnings.  The  ineffective  portion  of a
derivative's  change in fair value will be  immediately  recognized in earnings.
Based on the Company's  derivative  positions at December 31, 2000,  the Company
estimates that the effect of adopting SFAS 133 will not be material.
<PAGE>

Receivables and Unbilled Work in Progress - Unbilled work in progress represents
amounts earned under contracts in progress, but not yet billable under the terms
of those  contracts.  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.  Included in accounts  receivable at
December  31, 2000 and 1999 were  contract  retentions  totaling  $658 and $634,
respectively. Substantially all unbilled receivables are billed and collected in
the subsequent fiscal year. Billed fees receivable, net, at December 31, 2000 of
$66,633 and at December 31, 1999 of $56,274 were net of allowances  for doubtful
accounts of $3,847 and $4,025, respectively.

Cash  Equivalents - The Company  considers all highly  liquid  investments  with
maturities of three months or less when purchased to be cash equivalents.

Property and Equipment - Property and equipment are stated at cost. Depreciation
and amortization  are provided over estimated  useful lives using  straight-line
methods. Useful lives range as follows: buildings 40 years; equipment 3-6 years;
furniture  and  fixtures  5-10  years;  automobiles  3-6  years;  and  leasehold
improvements  utilizing  the shorter of the lease term or the  remaining  useful
life of the asset.  Depreciation expense was $4,675, $5,172, and $5,316 in 2000,
1999, and 1998, respectively.

Income Taxes - The  liability  method is used in  accounting  for income  taxes.
Under this method,  deferred tax assets and liabilities are determined  based on
differences  between financial reporting and tax bases of assets and liabilities
and are  measured  using the tax rates and laws that will be in effect  when the
differences are expected to reverse.

22

Intangible Assets - Goodwill,  net, approximated $11,692 and $12,270 at December
31, 2000 and 1999, respectively and represent amounts paid in excess of the fair
values of the net assets  acquired  in  acquisition  transactions.  Goodwill  is
amortized  using  the   straight-line   method  over  periods  of  10-40  years.
Accumulated  amortization of goodwill approximated $4,533 and $4,598 at December
31, 2000 and 1999, respectively.

If facts and circumstances indicate that goodwill or other intangible assets may
be impaired,  the Company's  policy is to compare the carrying  amount for those
assets to the  undiscounted  cash flows associated with those assets in order to
determine if a write-down to fair market value is required.

Other Assets - Included in Other Assets are debt financing  costs and trademarks
which are  amortized  on a  straight-line  basis  over the terms of the  related
agreement.  Accumulated amortization  approximated $1,777 and $1,418 at December
31,  2000  and  1999,  respectively.  Additionally,  certain  long-term  prepaid
expenses and prepaid  pension costs (Note 6) are  represented in the balances at
December 31, 2000 and 1999. Costs related to internally  developed  software are
accounted for in accordance with Statement of Financial Accounting Standards No.
86,  Accounting  for the  Costs of  Computer  Software  to be Sold,  Leased,  or
Otherwise Marketed. Capitalized costs of $919 and $177 were recorded in 2000 and
1999, respectively. In 2000, $24 of software amortization was recorded.

Foreign  Currency  Translation  -  The  functional  currency  for  most  foreign
operations is the local  currency.  The cumulative  effects of  translating  the
balance sheet  accounts  from the  functional  currency into the U.S.  dollar at
current exchange rates are included in Foreign Currency  Translation  Adjustment
in Shareholders'  Equity.  For all operations,  gains or losses from remeasuring
foreign  currency  transactions  into the  functional  currency  are included in
income.

Common  Stock  Reserved - The Company has  reserved  1,102,498  shares of common
stock for issuance  relative to employee stock option plans,  other stock option
plans, convertible securities, and common stock warrants.

Stock Based  Compensation - The Company grants to employees  stock options for a
fixed  number of shares  with an  exercise  price equal to the fair value of the
shares at the date of grant. The Company has elected to account for stock option
grants in  accordance  with APB Opinion No. 25,  Accounting  for Stock Issued to
Employees.

Reclassification  - Certain prior year amounts have been reclassified to conform
to the 2000 presentation.

<PAGE>

2.  Property and Equipment

Property and Equipment are presented at cost less  accumulated  depreciation and
are detailed as follows:
<TABLE>
<CAPTION>
                                                2000           1999
                                            ------------    ----------
      <S>                                   <C>             <C>
      Land and Buildings                    $      6,483    $    8,342
      Equipment                                   35,469        33,822
      Furniture and Fixtures                      11,946        11,661
      Automobiles                                  1,621         1,856
      Leasehold Improvements                       3,766         2,191
                                            ------------    ----------
                                                  59,285        57,872
      Less: Accumulated Depreciation             (44,753)      (41,522)
                                            ------------    ----------
         Total Net Property and Equipment   $     14,532  $     16,350
                                            ============    ==========
</TABLE>

3. Cumulative Convertible Redeemable Preferred Stock

On March 14, 1997,  the Board of Directors  approved an agreement to issue to an
investor $10 million of 8% Cumulative  Redeemable Preferred Stock (redeemable on
or after the seventh  anniversary of issuance),  together with separate warrants
exercisable for a period of 12 years and representing  approximately  33% of the
Common  Stock  outstanding  as of the  date of  issuance.  The  warrants  had an
exercise  price of $10.38 per share  until June 30,  1998 after  which the price
will range from $0.01 to $10.38  based upon the  Company's  performance  against
stipulated net income benchmarks. As of December 31, 2000, the exercise price of
the warrants is $10.38 per share. In addition, the agreement included options to
acquire up to 900,000 shares of Common Stock at a price of $16.50 per share from
July 1, 1997 through June 30, 1998, increasing on July 1 of each year thereafter
to $20.00,  $24.50, $29.00, and $33.00 through December 31, 2006. As of December
31, 1999, all options have been exercised. The agreement also includes an option
granted to the  holders of the  preferred  stock for the right to purchase up to
132,450  shares of common stock for an average price of $13.19 per share.  These
options are exercisable only in conjunction with exercises by holders of options
under the Company's Stock Option Plan (See Note 7).

The  Preferred  Stock is entitled to voting rights equal to the number of common
shares represented by the warrants.  The Preferred Stock may vote on all matters
except  as  expressly   provided  in  the  Company's   bylaws  and  articles  of
incorporation and under applicable law. The Preferred Stock is entitled to elect
Preferred Directors representing one less than a majority of the Company's Board
of Directors. The liquidation preference of each preferred share is its original
issue price of approximately $10.38 per share,  totalling $10 million. The value
assigned to the options and warrants of $150 and the costs of issuance of $2,149
are being  accreted/amortized  over the period to  redemption,  reducing the net
income available to common shareholders.

                                                                              23

4. Debt

Debt obligations consist of the following at December 31:
<TABLE>
<CAPTION>

                                                                                   2000        1999
                                                                                ----------  ----------
<S>                                                                             <C>         <C>
Revolving Lines of Credit:
   United States (Average interest rate of  8.48% at December 31, 2000)         $   10,084  $    7,000
   International (Average interest rate of 6.00% at December 31, 2000)               3,553       4,192
Notes Payable to former shareholders, interest at prime,  8.0%, and 8.5%             4,868       8,868
Various Notes Payable, interest at rates ranging from
   6.8% to 16.0% due in installments through the year 2003                           1,266       1,484
                                                                                ----------  ----------
Total Lines of Credit and Notes Payable                                             19,771      21,544
   Less: Current Portion                                                             4,430       4,549
                                                                                ----------  ----------
Total Long-Term Debt                                                            $   15,341  $   16,995
                                                                                ==========  ==========
</TABLE>

<PAGE>

The Company maintains one credit facility with a global bank. The facility bears
a three-year term and two one-year  extension  options,  both of which have been
exercised.  The credit facility contains certain restrictions which, among other
things,  limit capital  expenditures;  require minimum earnings before interest,
taxes,  depreciation  and  amortization;  and  specify  achievement  of  certain
leverage and fixed charge  ratios.  In addition,  cash dividends on common stock
are  prohibited.  The  repurchase of shares for cash or notes is restricted  and
payments on existing or future  notes  payable to  shareholders  are  permitted,
subject to certain limitations.  The facility is secured by substantially all of
the  assets  of  the  Company's  United  States  and  United  Kingdom  operating
subsidiaries.


Credit Facility

                MAXIMUM         INTEREST          EXPIRATION
NATURE         AMOUNT (*)         RATE               DATE
------         ----------       ---------      ----------------
(A)              $40,000           (A)         January 15, 2003
(B)              $ 3,000           (B)         January 15, 2003
(C)        (pound)11,000           (C)         January 15, 2003
(D)        (pound)11,000           (D)         January 15, 2003
(E)        (pound) 2,400           (E)         January 15, 2003

(A)  Revolving  Line of  Credit - Base  less  0.25% to Base and LIBOR + 1.5% to
2.0%. The total revolving facility will be reduced by $10,000 on January 1, 2001
and by an additional $5,000 on January 1, 2002.
(B) Letters of Credit sub-facility - 1.25% to 1.5% Per Annum
(C) Revolving  Line of Credit and  Overdraft  Facility - Base + 1.5% to 2.0% and
LIBOR + 1.5% to 2.0%
(D) Letters of Credit sub-facility - 1.75% Per Annum
(E) Capital Expenditure Facility - LIBOR + 1.5% to 2.0%
* Amounts  available  under the revolving  credit  facility will be subject to a
borrowing base limitation  based upon the Company's  earnings  before  interest,
taxes,  depreciation  and amortization  measured on a monthly basis.  Borrowings
under  the  capital  expenditure  facilities  are  repayable  quarterly  over  a
five-year period.

Interest  payments totaled $1,165,  $3,864,  and $5,366 in 2000, 1999, and 1998,
respectively.  The  weighted  average  interest  rate on  short-term  borrowings
($1,576  of  short-term   borrowings   denominated   in  South  African  rand  )
approximated 13.7% in 2000. Future maturities of long-term debt are as follows:

<TABLE>
         <S>                                         <C>
               2001                                  $ 4,430
               2002                                    1,158
               2003                                   13,914
               2004                                      162
               2005                                      107
                                                     -------
                                                     $19,771
                                                     =======
</TABLE>

At December 31, 2000,  the Company had provided  guarantees of $983 under United
States letters of credit and $6,736 under international bonds,  guarantees,  and
indemnities.

24
<PAGE>

5. Leases

The Company leases certain office space, equipment,  automobiles,  and furniture
under  noncancellable  operating  leases.  The following is a schedule of future
minimum lease payments,  net of noncancellable  sublease income,  required under
those leases which have initial or remaining noncancellable terms of one year or
more:

<TABLE>
         <S>                                               <C>
               2001                                        $12,959
               2002                                          9,809
               2003                                          8,776
               2004                                          6,543
               2005                                          4,716
         Thereafter                                         13,407
                                                           -------
                                                           $56,210
                                                           =======
</TABLE>

Rent expense,  net of income from subleases,  aggregated $14,891,  $14,992,  and
$14,803 in 2000, 1999, and 1998, respectively. Aggregate future minimum rents to
be received under noncancellable subleases as of December 31, 2000 are $17,594.

6. Benefit Plans

Pension Plans
The Company has a  noncontributory,  defined  benefit  pension plan covering its
United States employees over the age of 21 who were hired before March 28, 1996.
The  benefits  are  based  on each  eligible  employee's  years of  service  and
compensation during the last ten years of employment. A curtailment in the plan,
which  was  effective  March  28,  1997,   ceased  benefit  accruals  to  vested
participants on that date.

The  Company's  funding  policy is to  contribute  amounts  annually to the plan
sufficient  to meet minimum  funding  requirements  as set forth in the Employee
Retirement Income Security Act of 1974, plus additional  amounts, if any, as may
be determined to be appropriate by the Company's management.

Net periodic  pension costs consist of the  following  components  for the years
ended December 31:

<TABLE>
<CAPTION>
                                                       2000          1999         1998
                                                     -------       -------      --------
         <S>                                         <C>           <C>          <C>
         Interest Cost                                 2,863         2,889        2,687
         Actual Return on Plan Assets                 (2,975)       (3,226)      (3,639)
         Net Amortization and Deferral                  (160)         (160)        (160)
                                                     -------       -------      --------
            Net Periodic Pension Benefit             $  (272)      $  (497)     $(1,112)
                                                     =======       =======      ========
</TABLE>
<PAGE>

The following  table sets forth the funded status and net prepaid  pension asset
recognized for the plan:
<TABLE>
<CAPTION>

                                                                  2000         1999
                                                                --------     --------
        <S>                                                     <C>          <C>
        Change in Benefit Obligation
           Benefit Obligation at Beginning of Year              $ 40,982     $ 39,681
           Interest Cost                                           2,863        2,889
           Actuarial (Gain) Loss                                     987         (974)
           Benefits Paid                                          (1,134)        (614)
                                                                --------     --------
           Benefit Obligation at End of Year                    $ 43,698     $ 40,982

        Change in Plan Assets
           Fair Value of Plan Assets at Beginning of Year       $ 42,752     $ 40,509
           Actual Return on Plan Assets                            2,255        2,857
           Employer Contributions                                    600           --
           Benefits Paid                                          (1,134)        (614)
                                                                --------     --------
           Fair Value of Plan Assets at End of Year             $ 44,473     $ 42,752
                                                                --------     --------

           Funded Status                                        $    775     $  1,770
           Unrecognized Actuarial Loss                             2,355          647
           Unrecognized Transition Asset                            (160)        (319)
                                                                --------     --------
           Net Amount Recognized                                $  2,970     $  2,098
                                                                ========     ========

        Amounts Recognized in the Balance Sheet
           Consist of:

           Prepaid Benefit Cost                                 $  2,970     $  2,098
                                                                ========     ========
</TABLE>

Actuarial assumptions as of December 31 were as follows:
<TABLE>
<CAPTION>

                                                    2000        1999       1998
                                                  --------    --------   --------
        <S>                                       <C>         <C>        <C>
        Weighted Average Discount Rate              7.00%       7.50%      7.25%
        Expected Long-Term Rate of Return
           on Plan Assets                           7.00%       8.00%     10.00%
</TABLE>

                                                                              25
<PAGE>

The Company periodically revises the actuarial  assumptions used for calculation
of net periodic  pension cost and the  projected  benefit  obligation  to better
reflect  current  economic  and  market  conditions.   These  revisions  had  an
immaterial effect on net periodic pension cost for all years presented.

The Company also has a defined  contribution  savings plan which qualifies under
section 401(k) of the Internal Revenue Code,  covering  substantially all United
States employees,  in which Company stock was one of several elective investment
options.  As of May 10, 1996,  the Board of Directors of the Company  decided to
terminate the option of Company Common Stock under the Plan, whether as employee
contributions  or  as  Company  matching  contributions.  Consistent  with  that
decision,  employees  are  allowed to trade out of (but not into)  shares of the
Company's Common Stock held in their individual  401(k) accounts,  in accordance
with Plan provisions.  Employees may transfer funds out of this option quarterly
(transfers out are limited to 25% per quarter of the  employee's  balance if the
employee's  balance in this option is greater than $5), resulting in the sale or
repurchase of stock by the Company.  At December 31, 2000, the Plan holds 34,485
shares of the  Company's  stock  with a value of $908.  The  Company's  matching
contribution  to the plan was $1,195,  $1,140,  and $1,185,  in 2000,  1999, and
1998, respectively.

The Company's international subsidiaries have defined contribution pension plans
covering  substantially  all full-time  employees  over the age of 21.  Eligible
employees can elect contributory or noncontributory  status,  with contributions
related to compensation.  Expenses  related to these plans aggregated  $1,484 in
2000, $1,497 in 1999, and $1,680 in 1998.

7. Shareholders' Equity

Stock Option Plan
The Company is  authorized  under the 1990 Stock  Option Plan (the  "Plan"),  as
amended,  to issue up to 500,000  shares of Common Stock to key  employees.  All
options  granted have 10 year terms and vest and become fully  exercisable  at a
rate of 20% per year for five years of  continued  employment.  The option price
per share and the date of exercise are determined by the Compensation  Committee
of the Board of  Directors at the time of grant.  However,  the option price per
share may not be less than the fair market value of the  Company's  Common Stock
on the grant date,  with the options  expiring  ten years or less from the grant
date.  At December 31,  2000,  options to acquire 500;  15,000;  3,000;  75,000;
171,400;  6,000;  72,000;  and 18,000  shares of the  Company's  Common Stock at
$29.63,  $26.36,  $16.91,  $11.64, $12.61, $14.33, $19.54, and $28.48 per share,
respectively, were outstanding under this Plan. At that date, options to acquire
213,980  shares were  exercisable.  The Stock Option Plan expired on November 7,
2000.

The Company has elected to follow  Accounting  Principles  Board Opinion No. 25,
Accounting for Stock Issued to Employees  (APB 25) and related  Interpretations,
in accounting for its employee stock options  because,  as discussed  below, the
alternative  fair value  accounting  provided  for under  Statement of Financial
Accounting  Standards No. 123,  Accounting for  Stock-Based  Compensation  (SFAS
123), requires use of option valuation models that were not developed for use in
valuing employee stock options.

Pro forma information regarding net income and earnings per share is required by
SFAS 123,  and has been  determined  as if the  Company  had  accounted  for its
employee stock options under the fair value method of that  Statement.  The fair
value for these options was estimated at the date of grant using a Minimum Value
option pricing model with the following  weighted-average  assumptions  for 1999
and  1998:  risk-free  interest  rates of 5.6%,  dividend  yields  of 0%;  and a
weighted-average  expected  life of the  option of 7.6 years.  No  options  were
granted in the year 2000.

Option  valuation  models  require  the input of highly  subjective  assumptions
including the expected stock price  volatility.  Because the Company's  employee
stock options have characteristics  significantly different from those of traded
options,  and because changes in the subjective input assumptions can materially
affect the fair value estimate,  in management's opinion, the existing models do
not  necessarily  provide a  reliable  single  measure  of the fair value of its
employee stock options.

26
<PAGE>

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the options'  vesting  period.  The  Company's  pro
forma information follows.
<TABLE>
<CAPTION>
                                                        2000           1999           1998
                                                      -------         ------         ------
         <S>                                           <C>            <C>            <C>
         Pro Forma Net Income Available to Common
          Shareholders                                $10,539         $6,623         $6,877
         Pro Forma Earnings Per Common Share
            Basic                                     $  4.03         $ 2.84         $ 3.49
            Diluted                                   $  2.77         $ 2.02         $ 2.63
</TABLE>

A summary of the Company's stock option  activity,  and related  information for
the years ended December 31 follows:
<TABLE>
<CAPTION>
                                                               2000             1999             1998
                                                             --------         --------         --------
         <S>                                                 <C>              <C>              <C>
         Outstanding  - Beginning of Year                     421,903          456,500          398,000
         Granted                                                   --           18,000           89,000
         Exercised                                             22,753            7,097               --
         Cancelled                                             38,250           45,500           30,500
         Outstanding - End of Year                            360,900          421,903          456,500

         Exercisable -  End of Year                           213,980          202,503          152,600
         Weighted Average Fair Value of Options Granted
            During the Year                                  $    N/A         $   9.29         $   6.20

         Weighted Average Exercise Price:
            Outstanding - Beginning of Year                  $  15.57         $  15.05         $  14.27
            Granted                                          $     --         $  28.48         $  19.01
            Exercised                                        $  16.75         $  18.27         $     --
            Cancelled                                        $  17.95         $  15.25         $  16.42
            Outstanding - End of Year                        $  15.24         $  15.57         $  15.05
            Exercisable - End of Year                        $  14.62         $  15.40         $  16.33
</TABLE>

Exercise  prices for options  outstanding  as of  December  31, 2000 ranged from
$11.64 to  $29.63.  The  weighted-average  remaining  contractual  life of those
options is 6.5 years.

Share Repurchases

As described in Note 6, Company Common Stock was previously an investment option
in the Company's  401(k) plan. In accordance  with plan  provisions,  10,006 and
16,128  shares  were  repurchased  during  2000 and  1999  for  $243  and  $457,
respectively, related to transfers out of this investment option.

8. Income Taxes - The federal,  state,  and foreign  components of the provision
for income taxes are as follows at December 31:
<TABLE>
<CAPTION>

                                       2000           1999         1998
                                     --------      ---------    ---------
        <S>                          <C>           <C>          <C>
        Current Income Taxes:
           Federal                   $  1,709      $   4,051    $   7,390
           State                        1,301          1,317        1,677
           Foreign                      1,256            300          685
                                     --------      ---------     --------
        Total Current                   4,266          5,668        9,752
        Deferred Income Taxes:
           Federal                       (431)          (121)      (3,709)
           State                          (80)           (21)        (695)
           Foreign                     (1,147)           393        1,084
                                     --------      ---------     ---------
        Total Deferred                 (1,658)           251        (3,320)
                                     --------      ---------     ---------

        Provision for Income Taxes   $  2,608      $   5,919    $    6,432
                                     ========      =========    ==========
</TABLE>
<PAGE>

The foreign provision for income taxes is based on pre-tax earnings from foreign
operations of $3,189 in 2000, $477 in 1999, and $4,367 in 1998.

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets are as follows at December 31:
<TABLE>
<CAPTION>

                                                                2000      1999
                                                              --------   -------
    <S>                                                       <C>        <C>
    Deferred Tax Liabilities:
       Mark to Market Accounting for Accounts Receivable      $    343   $   687
       Other - net                                               2,908     3,402
                                                              --------   -------
    Total Deferred Tax Liabilities                               3,251     4,089
    Deferred Tax Assets:
       Depreciation                                              1,008       321
       Employee Benefits                                           559       492
       Non-Deductible Reserves                                   2,372     2,427
       Net Operating and Capital Losses                          3,295     3,299
       Other - net                                                 361       240
                                                               -------   -------
                                                                 7,595     6,779
    Valuation Allowance for Deferred Tax Assets                 (1,846)   (1,850)
                                                               -------   -------
    Total Deferred Tax Assets                                    5,749     4,929
                                                               -------   -------
    Net Deferred Tax Assets                                    $ 2,498   $   840
                                                               =======   =======
</TABLE>

Because the Company plans to continue to finance foreign expansion and operating
requirements  by  reinvestment   of   undistributed   earnings  of  its  foreign
subsidiaries,  United  States  income  taxes  have  not  been  provided  on such
earnings.  The  amount of  undistributed  earnings  which are  considered  to be
indefinitely reinvested is approximately $23,779 at December 31, 2000.

                                                                              27

A  reconciliation  of the  statutory  U.S.  income  tax  rate  to the  Company's
effective income tax rate is as follows:
<TABLE>
<CAPTION>

                                                              2000      1999      1998
                                                            --------  --------  --------
        <S>                                                 <C>       <C>       <C>
        Statutory U.S. Income Tax Rate                        34.0%     34.0%     34.0%
        State Taxes, net of Federal Benefit                    5.5%      6.1%      4.4%
        Income Tax in Jurisdictions Other than 34.0%           2.3%      0.7%      3.6%
        U.S. Research and Development Tax Credit             (15.7%)      --        --
        Adjustment of Taxes Provided in Prior Years           (9.0%)      --        --
        Permanent Differences Between
           Book and Taxable Income                             1.4%     (0.6%)     2.4%
        Losses for Which No Benefit is
             Recognized                                         --       3.1%       --
        Other                                                 (0.7%)    (1.4%)    (0.6%)
                                                            --------  --------  --------
        Effective Income Tax Rate                             17.8%     41.9%     43.8%
                                                            ========  ========  ========
</TABLE>

During the year ended  December  31, 2000 the Company  recognized  a tax benefit
amounting to $2,300 from the research and  development tax credit for years 1996
- 1999.  At  December  31,  2000  the  Company  had  $2,231  of  operating  loss
carryforwards  related to foreign  subsidiaries;  $2,043 can be carried  forward
indefinitely.  The  remaining  $188 will expire in 2002 - 2006.  The Company has
$3,152 of  capital  loss  carryforwards  in  foreign  jurisdictions  that can be
carried  forward  indefinitely.  A valuation  allowance  has been  provided  for
deferred  tax  assets  related to loss  carryforwards  and other  reserves.  The
valuation  allowance  as of  January  1, 1999 and 1998 was  $4,248  and  $4,396,
respectively.  Income tax  payments  amounted to $6,116,  $5,497,  and $8,639 in
2000, 1999, and 1998, respectively.
<PAGE>

9.    Consolidated Statements of Cash Flows

The changes in operating working capital as shown in the Consolidated Statements
of Cash Flows includes:
<TABLE>
<CAPTION>

                                                                   2000       1999        1998
                                                                ---------  ---------   ---------
      <S>                                                       <C>        <C>          <C>
      Decrease (Increase) in:
               Billed Fees Receivable                           $ (13,230)  $ (2,268)  $      44
               Unbilled Work in Progress                           (4,530)     4,325         433
               Other Current Assets                                   756      1,606        (824)
      Increase (Decrease) in:
               Accounts Payable and Accrued Expenses                  491     (5,354)     (4,806)
               Billings in Excess of Costs and Fees
                  Earned on Contracts in Progress                   2,476      2,396      (1,227)
                                                                ----------  --------   ----------
      Changes in Operating Working Capital Assets and
         Liabilities, net of Effects of Business Acquisitions   $ (14,037)  $    705   $  (6,380)
                                                                ==========  ========   ==========
</TABLE>

10.  Earnings Per Common Share

The following table sets forth the computation of basic and diluted earnings per
common share:
<TABLE>
<CAPTION>

                                                                      2000         1999         1998
                                                                   ----------   ----------   ----------
<S>                                                                <C>          <C>          <C>
Numerator:
   Net Income                                                      $   12,146   $    8,220   $    8,422

   Preferred stock dividends and accretion                             (1,128)      (1,128)      (1,128)
                                                                   ----------   ----------   ----------
   Numerator for basic earnings per common share -                     11,018        7,092        7,294
       Income available to common shareholders
   Effect of Dilutive Securities:
      Preferred stock dividends and accretion                           1,128           --        1,128
                                                                   ----------   ----------   ----------
   Numerator for diluted earnings per common share - Income
     available to common shareholders                              $   12,146   $    7,092   $    8,422
                                                                   ==========   ==========   ==========

Denominator:
   Denominator for basic earnings per common share -
     Weighted-average shares                                            2,613        2,334        1,968
   Effect of dilutive securities:
       Employee Stock Options                                             157          192           93
       Cumulative Convertible Redeemable Preferred Stock
           and associated Common Stock Warrants                           963          597          957
       Other Stock Options                                                 67          150           29
                                                                   ----------   ----------   ----------
   Dilutive potential common shares                                     1,187          939        1,079
                                                                   ----------   ----------   ----------

   Denominator for diluted earnings per common
       Share - Adjusted weighted-average shares                         3,800        3,273        3,047
                                                                   ==========   ==========   ==========

Basic earnings per common share                                    $     4.22   $     3.04   $     3.71
                                                                   ==========   ==========   ==========

Diluted earnings per common share                                  $     3.20   $     2.17   $     2.77
                                                                   ==========   ==========   ==========
</TABLE>

Options to purchase 41,250; 750; and 30,750 shares of common stock were excluded
from the  diluted  earnings  per share  calculations  in 2000,  1999,  and 1998,
respectively because their effect would have been anti-dilutive.

28
<PAGE>

11.  Commitments and Contingencies

The  Company  is a party to a number  of  lawsuits  and  claims  arising  in the
ordinary course of its business. While the ultimate results of lawsuits or other
proceedings  against the Company cannot be predicted with certainty,  management
does not  believe  the  ultimate  costs of such  actions,  if any,  in excess of
amounts provided in the consolidated  financial  statements will have a material
effect  on  the  Company's   consolidated   financial  position  or  results  of
operations.

12.     Special Charges to Operations

During 2000,  1999, and 1998, the Company  recorded a $853,  $1,428,  and $1,347
charge, respectively, against operations to cover severance and related benefits
costs, early termination of leases and expected sublease shortfalls, disposition
of leasehold improvements and selected real estate, office relocation costs, and
other corporate charges related to its cost reduction initiatives.  The majority
of these charges were paid in cash during the year in which they were  recorded.
Any accrual amounts related primarily to severance liabilities were not material
as of December 31, 2000, 1999, and 1998.

13.  Financial Instruments

The  Company's  financial  instruments  at December  31,  2000 and 1999  consist
primarily  of cash and cash  equivalents  and  loans  payable.  Due to the short
maturities of the cash and cash  equivalents,  carrying amounts  approximate the
respective fair values. The carrying amount for loans payable  approximates fair
market  value  since  the  interest  rates  on  these   instruments   are  reset
periodically.  Financial  instruments  that  potentially  subject the Company to
significant   concentrations   of  credit  risk  consist   principally  of  cash
investments and trade accounts  receivable.  Concentrations  of credit risk with
respect to trade  accounts  receivable  are limited  due to the large  number of
entities  comprising the Company's  customer base. The Company  performs ongoing
credit  evaluations  of  its  customers'  financial  condition.   Collateral  is
generally  not  required  and  credit  losses  have  been  within   management's
expectations.

14.  Quarterly Financial Information (Unaudited)
<TABLE>
<CAPTION>

2000                                        1st Qtr    2nd Qtr    3rd Qtr    4th Qtr      Year
<S>                                        <C>        <C>        <C>        <C>        <C>
Net Fees                                   $  63,982  $  66,623  $  66,281  $  66,334  $  263,220
Gross Profit                                  37,312     38,282     38,358     38,476     152,428
Net Income                                     1,209      3,376      3,119      4,442      12,146
Earnings Per Common Share - Basic                .35       1.18       1.09       1.59        4.22
Earnings Per Common Share - Diluted              .27        .89        .82       1.17        3.20

1999
Net Fees                                   $  66,628  $  67,318  $  63,897  $  59,352  $  257,195
Gross Profit                                  39,314     39,653     36,936     34,741     150,644
Net Income                                     1,782      2,992      1,582      1,864       8,220
Earnings Per Common Share - Basic                .73       1.33        .50        .60        3.04
Earnings Per Common Share - Diluted              .53        .89        .38        .45        2.17
</TABLE>

During the 4th quarter of 2000,  the Company  recognized  $2,300 in research and
development tax credits.

                                                                              29

15.  Subsequent Event

On February 13, 2001, the Company and Jacobs Engineering Group, Inc.  ("Jacobs")
announced  that they had  signed a letter  of intent to sell Gibb  International
Holdings,  Inc., the Company's international operating subsidiary,  to Jacobs. A
due diligence  review is being  performed and a decision is expected  during the
second quarter of 2001.
<PAGE>

16.  Business Segment and Geographic Area Information

The  Company's  operations  are conducted  principally  in the United States and
Europe. Accordingly,  the Company considers its operating segments to be defined
as  United  States  Operations  and  International  Operations.   For  financial
reporting  purposes,   International   results  are  presented   separately  for
operations in the United Kingdom,  Europe,  Africa and other countries.  The net
fees for each segment as described in the table below correspond directly to the
net revenues attributable to the geographic areas which are represented by these
segments.  International  operating  income  for 1999 has been  reclassified  to
conform to other years'  presentation.  These measures are consistent with those
currently  being  used by  management  to assess  performance.  The table  which
follows represents  combined disclosure for both business segment and geographic
area information.

<TABLE>
<CAPTION>
                                                                  2000         1999        1998
                                                                --------     --------    --------
        <S>                                                     <C>          <C>         <C>
        Net Fees
           United States Operations                             $173,009     $170,275    $179,315
           International Operations      United Kingdom           45,588       39,770      45,629
                                         Europe - Other           21,866       23,562      22,799
                                         Africa                   18,325       18,607      22,347
                                         Other                     4,432        4,981       4,830
                                                                --------     --------    --------
           Total                                                $263,220     $257,195    $274,920
                                                                ========     ========    ========
        Operating Income
           United States Operations                             $ 13,370     $ 16,262    $ 15,020
           International Operations      United Kingdom              680          689       1,034
                                         Europe - Other              824          341         517
                                         Africa                    1,105         (300)      1,936
                                         Other                       207          465         500
                                                                --------     --------    --------
           Total                                                $ 16,186     $ 17,457    $ 19,007
                                                                ========     ========    ========
        Segment Assets
           United States Operations                             $ 81,901     $ 71,947    $ 84,801
           International Operations     United Kingdom            40,358       45,205      41,326
                                        Europe - Other             6,808        5,283       4,875
                                        Africa                    12,888       11,814      15,636
                                        Other                      3,749        4,582       4,273
                                                                --------     --------    --------
           Total                                                $145,704     $138,831    $150,911
                                                                ========     ========    ========
        Depreciation and Amortization
           United States Operations                             $  4,516     $  4,719    $  4,562
           International Operations      United Kingdom            1,026        1,155         920
                                         Europe - Other              131           93         459
                                         Africa                      427          467         686
                                         Other                       130          170          97
                                                                --------     --------    --------
           Total                                                $  6,230     $  6,604    $  6,724
                                                                ========     ========    ========
        Long Lived Assets
           United States Operations                             $ 10,979     $ 12,408    $ 18,815
           International Operations       United Kingdom           2,665        3,039       3,524
                                          Europe - Other             252          228         181
                                          Africa                     588          637         869
                                          Other                       48           38          53
                                                                --------     --------    --------
           Total                                                $ 14,532     $ 16,350    $ 23,442
                                                                ========     ========    ========
        Capital Expenditures
           United States Operations                             $  3,031     $  1,867    $  5,259
           International Operations        United Kingdom            746          675         616
                                           Europe - Other            112          113         307
                                           Africa                    216          192         388
                                           Other                      --            7          65
                                                                --------     --------    --------
           Total                                                $  4,105     $  2,854    $  6,635
                                                                ========     ========    ========
</TABLE>

30

<PAGE>

Report of Independent Auditors
--------------------------------------------------------------------------------

The Board of Directors and Shareholders
LAWGIBB Group, Inc. and Subsidiaries

We have audited the accompanying  consolidated  balance sheets of LAWGIBB Group,
Inc.  and  subsidiaries  as of  December  31,  2000 and  1999,  and the  related
consolidated statements of income and comprehensive income, shareholders' equity
and cash flows for each of the three  years in the  period  ended  December  31,
2000.  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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the 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.  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,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial  position of LAWGIBB Group,
Inc.  and  subsidiaries  at  December  31, 2000 and 1999,  and the  consolidated
results of their  operations and their cash flows for each of the three years in
the period ended  December 31, 2000, in conformity  with  accounting  principles
generally accepted in the United States.


Atlanta, Georgia
March 9, 2001

                                                                              31
<PAGE>

Directors and Officers Information

Directors

Peter D. Brettell
Chief Executive
GIBB Ltd
Reading, England

Bruce C. Coles
Chairman of the Board, President,
and Chief Executive Officer
LawGibb Group, Inc.

Robert B. Fooshee
Executive Vice President,
Chief Financial Officer, and Treasurer
LawGibb Group, Inc.

Walter T. Kiser
Retired Chairman and
Chief Executive Officer
Law Companies Engineering Group, Inc.

Joe A. Mason
Chief Financial Officer
Williams Interests
Stone Mountain, Georgia

Dr. Steven Muller
President Emeritus
The Johns Hopkins University
Washington, D.C.

Clay E. Sams
Vice President
Law Engineering and Environmental Services, Inc.
Charlotte, North Carolina

James M. Williams, Jr.
Vice Chairman
Williams Group International, Inc.
Stone Mountain, Georgia

Jerald H. Williams
Executive Vice President
Dedicated Logistics
Atlanta, Georgia

John Y. Williams
Managing Director
Equity South Advisors, LLC
Atlanta, Georgia

Michael D. Williams
President
Georgia Tractors, Inc.
Athens, Georgia

Virgil R. Williams
Chairman and Chief Executive Officer
Williams Group International, Inc.
Stone Mountain, Georgia
<PAGE>

Officers

Bruce C. Coles
Chairman of the Board, President,
and Chief Executive Officer

Robert B. Fooshee
Executive Vice President,
Chief Financial Officer, and Treasurer

W. Allen Walker
Executive Vice President

Robert S. Gnuse
Senior Vice President and
Director of Marketing

Jon A. McCarthy
Senior Vice President and
Director of Human Resources

Lawrence J. White
Senior Vice President and
Chief Information Officer

Keith C. Groen
Secretary and General Counsel

32

<PAGE>

Shareholders' Information

2001 Annual Meeting:
The Annual  Shareholders'  Meeting  will be held at 4:00 p.m. on Monday,  May 7,
2001,  at the  offices  of the  Company,  1105  Sanctuary  Parkway,  Suite  300,
Alpharetta, GA 30004.

Transfer Agent:
LawGibb Group, Inc.
1105 Sanctuary Parkway, Suite 300
Alpharetta, GA  30004
(770) 360-0600

LawGibb Group,  Inc.'s Annual Report on Form 10-K to the Securities and Exchange
Commission provides certain additional information. A copy may be obtained at no
charge by contacting Shareholder Relations at the above address.

There  currently is no  established  trading  market for shares of the Company's
common stock, and although substantially all of the outstanding shares have been
registered  under  applicable  securities laws, no assurance can be given that a
liquid market will develop in the future or that quotations for the common stock
will be  available.  Additionally,  the Company  does not  maintain  stock price
information  with  respect  to  transactions  involving  purchases  and sales of
outstanding shares of common stock. The Company did not pay any dividends on its
common stock during the fiscal years ended  December 31, 2000 or 1999.  Further,
the Company's  existing credit facility  prohibits the payment of cash dividends
on the Company's common stock. As of December 31, 2000, there were 1,203 holders
of the Company's common stock.

[IMAGE]
Water Quality Testing
LAWGIBB has developed  software for stormwater  management  and data  management
that can be directly  applied to the data  requirements  of large  environmental
water quality studies.

[IMAGE]
Wetlands Mitigation Project
Current work in the Everglades is  representative  of the Company's  services in
designing  and  studying  the  nesting  habitat  in  wetlands  areas for  birds,
reptiles, etc. and restoring trophic functions.

[IMAGE]
Estonian Railways, Freightyard
LAWGIBB's  Transport  Consulting  experts  in the UK  were  commissioned  by the
Estonian Privatization Agency to advise how to best implement rail privatization
in that Eastern European country.

[IMAGE]
The Mars  Awards  for the  Environment  in  Berkshire,  UK
Run by a partnership between Mars Confectionery and local authorities,  The Mars
Awards aim to encourage  schools to become more closely involved in a continuous
educational and cultural process which ensures the protection of our environment
for future generations.

[IMAGE]
Direct Push Technology
Recently deployed drilling  equipment using new technologies  allows our project
team to make  on-site  field  decisions  without  having to wait for  laboratory
analytical results, thus saving clients time and money.


LAWGIBB Group, Inc.
www.lawgibb.com

Worldwide Corporate Headquarters
1105 Sanctuary Parkway, Suite 300
Alpharetta, GA 30004 USA
Telephone: (770) 360-0600
Fax: (770) 360-0580

International Headquarters
GIBB House, London Road
Reading, Berkshire RG6 1BL, UK
Telephone: +44-118-9635000
Fax: +44-118-9491054