**EXHIBIT 10.2**

 
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| *www.fcg.com* |

 

 

March 22, 2004

 

Mary Franz

118 12thStreet

Seal Beach, California90740

 

Dear Mary,

 

As we have discussed, youwill focus during the next five quarters on leading and establishing ourFirstQuality initiative as well as continuing and transitioning your otherregular duties as a member of senior management.   In addition, we have mutually agreed that your target separationdate from FCG is July 1, 2005.

 

In recognition of thisnew arrangement, we have agreed to the follow compensation plan for you:

 

•                                          You willcontinue to earn a salary of $415,000 per year for the balance of youremployment with FCG;

 

•                                          You willcontinue to participate in the FCG Bonus Plan according to the terms of suchplan and as it pertains to the Executive Committee or similar management body;

 

•                                          You willreceive a retention bonus of $415,000 (the “Retention Bonus”), which amount ispayable to you on July 1, 2005 (except if FCG terminates your employmentearlier than July 1, 2005, other than for “cause”, then such amount shall bepayable earlier as described below);

 

•                                          You willcontinue to receive any SERP contribution made by FCG for employees at theExecutive Vice President level through your date of termination;

 

•                                          Upon yourtermination from FCG, you will receive monthly reimbursement for any cost ofCOBRA to you for benefits continuation at your then-current level of benefitscoverage for a period of 12 months from your separation date; and

 

•                                          Upon yourtermination from FCG, you will receive an Executive Outplacement Package withour current outplacement vendor of four months.  This outplacement package will be the equivalent of that providedfor other FCG senior executives who have received such services in connectionwith termination of their employment from FCG. You may begin this program at any time after January 1, 2005, unless FCGhas terminated your employment earlier than such date.

 

If FCG were to terminateyour employment other than for “cause” prior to July 1, 2005, the RetentionBonus shall be payable to you as of your termination date.  No other compensation would be due to youupon such termination, except for (i) all accrued and unpaid base salary andunused paid time off earned

 
| *111 West Ocean Boulevard, 4th Floor, Long  Beach, California  90802-4646* |   | • | *562/624-5200* |   | *562/983-9384  (Fax)* |
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through your separationdate; and (ii) the COBRA reimbursement and outplacement benefits describedabove.

 

If you voluntarily resignyour employment prior to July 1, 2005, you will forfeit the Retention Bonus andyou will receive no additional compensation or severance from FCG upon yourseparation of employment, except for all accrued and unpaid base salary andunused paid time off earned through your separation date.

 

If your employment isterminated for “cause” by FCG, you will forfeit the Retention Bonus and youwill not be eligible for any compensation or severance from FCG upon yourseparation of employment, except for all accrued and unpaid base salary andunused paid time off earned through your separation date.

 

For purposes of thisarrangement, “cause” is defined as (i) an intentional material act of fraud ordishonesty in connection with your employment with FCG; (ii) your conviction ofor pleading guilty or “no contest” to any felony or any crime involving moralturpitude or dishonesty; (iii) willful and material breach of FCG’s policies oryour Vice President agreement, which breach is not cured within 30 days noticeof such breach provided to you by FCG; (iv) intentional and material damage to Company’sproperty; or (v) willful violation of any law or regulation applicable to theFCG’s business, including any federal or state securities laws. For purposes ofthis definition, your conduct will not be considered “willful” unless committedwithout good faith and without a reasonable belief that the act or omission wasin FCG’s best interest.

 

If neither you nor FCGterminates your employment from FCG prior to July 1, 2005, your employment withFCG will terminate on July 1, 2005.

 

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.  In addition, should FCGundertake a program to tender for or exchange stock options for cash or otherequity incentives, you shall be eligible to participate in any such programthat occurs prior to the termination of your employment to the same extent asother senior executives at FCG.

 

All of amounts paid toyou under this arrangement shall be less federal, state and other applicabletaxes and any authorized withholdings to the extent applicable to such amounts.

 

On your effective date ofseparation, we would execute the standard form of FCG separation agreement toeffect your separation terms.  Executionof the agreement is a condition to receiving the payment of your retentionbonus amounts and other benefits described in this letter.

 

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

 

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

 

Sincerely,

 

**First Consulting Group, Inc.**

 

 
| By:    | /s/  Luther J. Nussbaum               |   |
|--------|---------------------------------------|--------|
|   | Luther  J. Nussbaum                   |
|   | Chairman  and Chief Executive Officer |

 

**Agreed:**

 

 
|   | /s/ Mary Franz |   |
|--------|----------------|--------|
|   | Mary Franz     |

 

 

cc:           Jan Blue, Vice President

 

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