**Exhibit 10.1**

 

**

 

*www.fcg.com*

 

May 17, 2005

 

Mitch Morris

10817 Wellworth Avenue

Los Angeles, California90024

 

Dear Mitch,

 

As we have discussed, FCGwould like to provide you with a one year housing expense accommodation inorder to provide you with an additional opportunity to settle in the SouthernCalifornia area, and in order to make it more convenient for you to spend timein the Long Beach corporate offices when you are not otherwise traveling onbusiness.  As you and I have discussed,this is an important factor in how we are approaching our succession planningas a firm.

 

In recognition of thisarrangement, we have agreed to the following:

 

•                                          FCG willreimburse or pay for your moving costs associated with moving to your newresidence in Orange County, CA.  Movingcosts will be handled per FCG standard policies in this regard.

 

•                                          Commencing onJune 1, 2005 and for each payroll period through May 31, 2006, FCGwill include a gross amount of $3,650 in your paycheck under an item titled “HousingAllowance.”  All of amounts paid to youunder this arrangement shall be less federal, state and other applicable taxesand any authorized withholdings to the extent applicable to such amounts.

 

•                                          If youterminate your employment with FCG or FCG terminates your employment for “cause”at any time prior to June 1, 2008, you will repay certain amounts paid toyou under this arrangement, which amount shall be an adjusted gross net of anytaxes based on your then-current tax withholding status.  Any amounts repayable by you under the termsof this provision shall be made in accordance with the following schedule: (i) 100%if said termination event occurs prior to August 1, 2006; (ii) 75% ifsaid termination event occurs after August 1, 2006 and prior to June 1,2007; and (iii) 50% if said termination event occurs after June 1,2007 and prior to June 1, 2008.  Noamounts shall be repayable if you remain employed through June 1, 2008.  FCG is authorized to withhold all or a portionof any amounts that may be due to FCG under this clause from any finalpaycheck, reimbursement of expenses or payment of PTO balance as of youreffective separation date.  To the extentsuch withheld amounts are insufficient to pay the balance of amounts due underthis clause, you will pay the remaining balance due within ten (10) daysof your effective separation date from FCG.

 

•                                          If FCGterminates your employment for other than “cause”, you will not be required topay back any amounts paid to you under this arrangement.

 
| *111 West Ocean Boulevard, 4th Floor,  Long Beach, California 90802-4646* | *•* | *562/624-5200* | *562/983-9384 (Fax)* |
|---------------------------------------------------------------------------|----------|----------------|----------------------|

 

 

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•                                          You commit tobe in the Long Beach corporate office (or other corporate office in SouthernCalifornia if FCG were to relocate corporate headquarters) for a significant amountof your business time that you spend in the Southern California area (except whenvisiting a Southern California client).

 

•                                          Thisarrangement may only be modified or extended by mutual agreement of you andFCG.

 

For purposes of thisarrangement, “cause” is defined as (i) an intentional material act offraud or dishonesty in connection with your employment with FCG; (ii) yourconviction of or pleading guilty or “no contest” to any felony or any crimeinvolving moral turpitude or dishonesty; (iii) willful and material breachof FCG’s policies or your Vice President agreement, which breach is not curedwithin 30 days notice of such breach provided to you by FCG; (iv) intentionaland material damage to Company’s property; or (v) willful violation of anylaw or regulation applicable to the FCG’s business, including any federal orstate securities laws. For purposes of this definition, your conduct will notbe considered “willful” unless committed without good faith and without areasonable belief that the act or omission was in FCG’s best interest.

 

The arrangement describedin this letter will not modify your status as an “at will” employee, meaningthat you or FCG can terminate your employment at any time for any reason or noreason.

 

This letter may only bemodified in writing by mutual agreement of you and FCG.  This letter is binding on FCG and itssuccessors and assigns.

 

If you have anyquestions, please feel free to contact me.

 

Sincerely,

 
| **FIRST  CONSULTING GROUP, INC.** |                                  |
|-----------------------------------|---------------------------------------|
|                              |                                  |
|                              |                                  |
| By:                               |                                  |   |   |
|                              | Luther J. Nussbaum                    |   |   |
|                              | Chairman and  Chief Executive Officer |   |   |
|                              |                                  |
| **AGREED:**                       |                                  |
|                              |                                  |
|                              |                                  |
|                              |                                  |   |   |
|                              | Mitch Morris                          |   |
|                              |                                  |
|                              |                                  |
| cc:                               | Jan Blue, Vice  President             |   |
|                                   |                                       |  |  |  |  |

 

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