Exhibit
10.1


 





 


 


November 21,
2005


 


Luther J. Nussbaum


5818 Bay Shore Walk


Long Beach, CA  90803


 


Dear
Lu,


 


This letter sets forth the substance of the
agreement (the “Agreement”) between you and First Consulting Group, Inc. (“FCG”)
regarding your separation of employment.


 


1.  Separation.  Your
separation as an employee of FCG and all of its subsidiaries or affiliates
(individually, an “FCG Company” or collectively, the “FCG Companies”) shall be effective
November 21, 2005 (the “Separation Date”). 
The foregoing shall not be deemed to modify the date of your previous
resignation on November 3, 2005 as FCG’s Chairman and Chief Executive
Officer, and as an officer and/or director of any FCG Company.


 


2.  Accrued Salary and Paid Time Off.  On
or after the Separation Date, in conformance with applicable state laws, FCG
will pay you all accrued and unpaid salary, and all accrued and unused paid
time off earned through the Separation Date, subject to standard payroll
deductions and withholdings.  You are
entitled to these payments regardless of whether or not you sign this
Agreement.  Unused personal choice
holidays are paid out.


 


3.  Severance Payments.  FCG will pay to you a lump sum amount of $820,250 as full consideration
for your obligations and covenants under this Agreement and in full
satisfaction of any amount that may be owed to you upon your separation from
FCG under any agreement or arrangement between you and FCG or any other FCG
Company.   The foregoing lump sum
severance amount represents: (a) eighteen (18) months base salary; (b) eighteen
(18) months of target DSO bonus at a 10% bonus rate; (c) lump sum amount equivalent
to purchase of retiree benefits; and (d) membership dues for the Center Club and WPO for the 2006 calendar year.
Payment of the lump sum severance described above will be made within ten (10) days
after the date this signed agreement is received by FCG.  All amounts paid under this paragraph will be
less federal, state and other applicable taxes and other authorized
withholdings, and shall be made by manual check.


 


4.  Health Insurance.  According
to company policy, your FCG group health insurance benefits will be cancelled
effective with the Separation Date. After the Separation Date, you will be
eligible to continue your group health insurance benefits at your sole cost and
expense to the extent provided by federal law, state insurance laws and by FCG’s
current group health insurance policies (including retiree medical benefits). You
may do this by making the retiree medical election and submitting your premiums
directly to our benefits administrator in the Long Beach office.


 





















 


A package of information will be sent to you
via mail within 21 days of the Separation Date detailing the process and
premium amounts for your retiree medical benefits coverage, including the
deadline by which you must elect coverage. Coverage will be effective
retroactive to the Separation Date.


 


5. Flexible Spending Accounts. Coverage under Flexible Spending Accounts
ceases on the Separation Date, subject to your ability to continue your Health
Care Flexible Spending Account through the balance of the year on an after-tax
basis. Additional details are provided in the standard COBRA notification.


 


6. Life Insurance. Your FCG group life insurance coverage will
end effective on the Separation Date.  If
you would like to convert your coverage, please contact the Benefits Service
Center within 30 days of the Separation Date at 800-471-8853, ext. 2363.


 


7. Disability/Long Term Care
Coverage. Coverage
under the disability and Long Term Care programs will terminate effective on
the Separation Date.  If you would like
to convert your coverage(s), please contact the Benefits Service Center within
30 days of the Separation Date at the number above.


 


8. Associate Stock Purchase Plan
(ASPP).   Participation in the ASPP will terminate
effective with the Separation Date. 
Year-to-date deductions that have not already been used to purchase
stock will be refunded within two pay periods after the Separation Date.  Stock already purchased will remain in your
personal E*TRADE account. You should contact E*TRADE directly with any
questions regarding your account.


 


9. Stock Options.  Any
options to purchase FCG stock that you hold will cease to vest on the
Separation Date and all of your unvested stock options will be cancelled.  The expiration date on your vested options
will be modified so that you will have until December 31, 2006 to exercise
any vested options you received under FCG’s option plans. A closing statement
containing information on your vested options will be mailed to your home from
the FCG Corporate Affairs department. 
Also, status of your stock options is available online through E*TRADE
at www.optionslink.com.


 


10. Other Benefits.  You
and FCG hereby agree and acknowledge the following:


 


(a) SERP and 401(k).  As of
the Separation Date, you no longer may contribute funds to FCG’s 401(k) plan or
the Supplemental Executive Retirement Plan (“SERP”), nor will FCG contribute
any matching or other funds to such plans on your behalf.  No payroll deductions for pre-tax
contributions will be taken from your severance pay.   Nothing in this Agreement terminates or
otherwise affects any right or interest you may have in vested funds and assets
under FCG’s 401(k), ASOP and SERP plans.


 


You will receive detailed information from
New York Life regarding the distribution of your contributions and any vested
funds from the 401(k) and ASOP account. 
As you will read in that material, you should wait until the middle of
the month after the month in which your last 401(k) deduction is made
before applying for a distribution. 
Contact New York Life directly at 

(800) 294-3575 regarding any questions, including account rollover
transactions.  You may also visit their
website at www.bcomplete.com.  If you
currently have an outstanding loan, you may 


 


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maximize the tax deferral of
this benefit by electing to repay the loan prior to taking a distribution from
the Plan.  If you choose not to, the
outstanding loan balance will be defaulted and treated as a taxable
distribution to you.  You may coordinate
the prepayment of the outstanding loan balance with New York Life.


 


You will receive detailed information from
Human Resources regarding the distribution of your contributions and any vested
funds from the SERP.  You may contact Carol
Cogan if you have any questions.


 


(b) Other Amounts.  You
acknowledge that, except as expressly provided in this Agreement, you will not
receive any additional compensation, bonus, severance or benefits after the
Separation Date.


 


(c) Acknowledgment.  You
acknowledge that the consideration provided in this Agreement is good and
valuable consideration in exchange for this Agreement, and includes payments
and benefits to which you are not otherwise entitled.


 


11. Unemployment Benefits. Because of the nature of your separation
with FCG, you are not eligible for unemployment insurance benefits.


 


12. Expense Reimbursement. Any outstanding unreimbursed expenses will
be paid based on the submission of your final Time and Expense Report and the
appropriate documentation. It is acknowledged that you may receive cellular
phone, long distance and other business related charges after the Separation
Date; please submit those expenses for reimbursement as they occur to FCG c/o
Jan Blue in the Long Beach, California office.


 


13. Return of FCG Property.  Except
as noted below, on or before the Separation Date, you agree to return to FCG
all FCG Company documents (and all copies thereof) and other FCG Company
property that you have had in your possession at any time, including (i) any
materials of any kind that contain or embody any proprietary or confidential
information of an FCG Company (and all reproductions thereof), and (ii) computers
and other electronic devices, credit cards, phone cards, entry cards,
identification badges and keys. Please return items to Jan Blue in Long Beach
as soon as practicable, at least within 7 days.


 


You will be permitted to keep your laptop
computer at no cost to you, except that the fair market value of the computer
will be added to your taxable wages and appropriate state and federal taxes
will be deducted.  The applications
software on your laptop is licensed for FCG use only and it is your
responsibility to delete any applications software from the computer with the
exception of the operating system.


 


In addition, FCG will make reasonable efforts
to provide to you any personal emails sent to your former FCG email address for
a period of sixty (60) days from the Separation Date.  Additionally, during that period of time, FCG
will place an auto reply message on your former FCG email indicating your new
email address for any personal messages. Meanwhile, any pertinent FCG
communications, other than inquiries described in Section 17 below, shall
be forwarded to Steve Heck or a successor CEO.


 


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14. Vice President Agreement; Indemnity Agreement.
You hereby acknowledge and agree to your continuing obligations, both during
and after your employment with FCG, to abide by the terms of that certain Vice
President Agreement between you and FCG dated December 15, 2000; provided,
however, that you agree that Sections 7(a) and (b) of your Vice
President Agreement shall be superseded and replaced in their entirety by the
terms set forth in Section 15 of this Agreement.  The terms of that certain Indemnity Agreement
between you and FCG dated February 9, 1998 shall remain in full force and
effect and you are entitled to indemnification by FCG in accordance with and
subject to the terms of FCG’s charter documents and the Indemnity Agreement.


 


15. Non-Solicitation.  You hereby
agree to the following restrictions for a period of eighteen (18) months from
the Separation Date:


 


(a)         No Solicitation of Known FCG Company
Clients.  You
hereby agree that, without the prior written consent of FCG, you (i) shall
not provide any services, directly or indirectly, and whether as an employee,
consultant, independent contractor or otherwise, to or on behalf of any Known
FCG Client, and (ii) shall not, directly or indirectly, solicit, divert or
take away any Known FCG Client.  For
purposes of these restrictions, a “Known FCG
Client” shall be any past, present or prospective client of any FCG
Company that you provided services for, participated in preparation or delivery
of any oral or written proposal for, or otherwise had contact with during the
last 18 months while at FCG.


 


(b)         No Solicitation of Employees.  You agree to
not, directly or indirectly, solicit, divert, take away, hire or engage, on
behalf of yourself or any other person or entity any employee of any FCG
Company.


 


16. Confidentiality.  The provisions of this Agreement will be held
in strictest confidence by you and FCG and will not be publicized or disclosed
in any manner whatsoever; provided, however,
that:  (a) you may disclose this
Agreement to members of your immediate family upon their agreement to maintain
this Agreement in strict confidence as set forth in this section; (b) the parties
may disclose this Agreement in confidence to their respective attorneys,
accountants, auditors, tax preparers, and financial advisors; (c) FCG may
disclose this Agreement as necessary to fulfill standard or legally required
corporate reporting or disclosure requirements; and (d) the parties may disclose this
Agreement insofar as such disclosure may be necessary to enforce its terms or
as otherwise required by law.  In
particular, and without limitation, you agree not to disclose the terms of this
Agreement to any current or former FCG employee.


 


17. Nondisparagement; Inquiries.  Both you and FCG agree not to
disparage the other party, and the other party’s officers, directors,
employees, shareholders and agents, in any manner likely to be harmful to them
or their business, business reputation or personal reputation; provided that
both you and FCG will respond accurately and fully to any question, inquiry or
request for information when required by legal process.  You agree that you shall refer any inquiries
from the media, financial analysts or the stockholder community concerning the
reasons for your departure from FCG to Tom Reep and shall not provide any such
persons with any information concerning the reasons for your departure beyond
that described in FCG’s public announcement of your departure.


 


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18. Release of Claims.  In
consideration for FCG entering into this Agreement and for other good and
valuable consideration, you hereby release, acquit and forever discharge each
of the FCG Companies and their respective parents and subsidiaries, and each of
their respective officers, directors, agents, servants, employees, attorneys,
shareholders, successors, assigns and affiliates, of and from any and all claims,
liabilities, demands, causes of action, costs, expenses, attorneys’ fees,
damages, indemnities and obligations of every kind and nature, in law, equity,
or otherwise, known and unknown, suspected and unsuspected, disclosed or
undisclosed, fixed or contingent, liquidated or unliquidated, arising out of or
in any way related to agreements, events, acts or conduct at any time prior to
and including the Effective Date of this Agreement, including but not limited
to: all such claims and demands directly or indirectly arising out of or in any
way connected with your employment with any FCG Company or the termination of
that employment; claims or demands related to salary, bonuses, commissions,
stock, stock options or any other ownership interests in any FCG Company,
vacation pay, fringe benefits, expense reimbursements, severance pay or any
other form of compensation; claims arising from any employment agreement or
arrangement between you and any FCG Company; claims pursuant to any federal,
state or local law, statute or cause of action including, but not limited to,
the federal Civil Rights Act of 1964, as amended; the federal Americans with
Disabilities Act of 1990; the federal Age Discrimination in Employment Act of
1967, as amended (“ADEA”); the California Fair Employment and Housing Act, as
amended; tort law; contract law; wrongful discharge; discrimination;
harassment; fraud; defamation; emotional distress; and breach of the implied
covenant of good faith and fair dealing. 
You further agree not to initiate or continue any proceeding based upon
the claims released herein. 
Notwithstanding the foregoing, your release of the FCG Companies in
accordance with this Section shall not be deemed to release (i) any
of the FCG Companies’ duties or obligations under this Agreement, including,
but not limited to, FCG’s indemnification obligations to you described in Section 14
of this Agreement; or (ii) any of your rights as a stockholder and/or
option holder of FCG.


 


19. ADEA Waiver.  You acknowledge that you are knowingly
and voluntarily waiving and releasing any rights you may have under the ADEA,
as amended.  You also acknowledge that
the consideration given for the waiver and release in the preceding paragraph
hereof is in addition to anything of value to which you were already
entitled.  You further acknowledge that
you have been advised by this writing, as required by the ADEA, that:  (a) your waiver and release do not apply
to any rights or claims that may arise after the execution date of this
Agreement; (b) you have been advised hereby that you have the right to
consult with an attorney prior to executing this Agreement; (c) you have
twenty-one (21) days to consider this Agreement (although you may choose to
voluntarily execute this Agreement earlier); (d) you have seven (7) days
following the execution of this Agreement by the parties to revoke the
Agreement; and (e) this Agreement will not be effective until the date
upon which the revocation period has expired, which will be the eighth day
after this Agreement is executed by you, provided that FCG has also executed
this Agreement by that date (“Effective Date”).


 


20. Section 1542
Waiver.  In giving the above
releases, which include claims which may be unknown to you at present, you acknowledge
that you have read and understand Section 1542 of the California Civil
Code which reads as follows:  “A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.”  You hereby expressly
waive and relinquish all rights and benefits under that section and any
law of any jurisdiction of similar effect with respect to your release of any
unknown or unsuspected claims that you may have against the FCG Companies.


 


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21. Indemnification and Attorneys’
Fees.  You understand and agree that if you
hereafter commence, join in, or in any manner seek relief through any lawsuit,
charge or complaint with any court, administrative agency, governmental
authority or otherwise in any matter arising out of, based upon, or relating to
the claims released in this Agreement, then you will pay FCG in addition to any
other expenses, costs or damages caused to FCG thereby, all FCG’s attorneys’
fees incurred in defending or otherwise responding to such lawsuit, charge, or
complaint.    This section will not apply to any claim
brought by you under the ADEA or to challenge the validity of the waiver in
this Agreement of any such claim or any claim to enforce FCG’s obligations
hereunder or any rights you may have as an FCG stockholder and/or option holder.


 


22. Consultation.  You
agree to make yourself reasonably available to FCG to respond to reasonable
requests by FCG for information concerning litigation, regulatory inquiry or
investigation, involving facts or events relating to FCG that may be within your
knowledge.  You will provide a reasonable
degree of cooperation with FCG in connection with any or all future litigation
or regulatory proceedings brought by or against FCG to the extent FCG
reasonably deems your cooperation necessary.


 


23. Miscellaneous.  This
Agreement constitutes the entire agreement between you and FCG with regard to
this subject matter.  It is entered into
without reliance on any promise or representation, written or oral, other than
those expressly contained herein, and it supersedes any other such promises,
warranties or representations, except and only to the extent expressly provided
in Section 14 hereof.  This
Agreement may not be modified or amended except in a writing signed by both you
and FCG.  This Agreement will bind and
inure to the benefit of the heirs, personal representatives, successors and
assigns of both you and FCG.  If any
provision of this Agreement is determined to be invalid or unenforceable, in
whole or in part, this determination will not affect any other provision of
this Agreement and the provision in question will be modified by the court so
as to be rendered enforceable.  This
Agreement will be deemed to have been entered into and will be construed and
enforced in accordance with the laws of the State of California as applied to
contracts made and to be performed entirely within California.


 


Lu, we deeply appreciate your many years of service
to FCG, including as CEO and Chairman. We wish you all the best in wherever
your future endeavors may take you.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


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If this Agreement is acceptable to you,
please sign below and return the original to Jan Blue at First Consulting Group, Inc.,
111 West Ocean Boulevard, 4th Floor, Long Beach, California 90802.


 


Sincerely,


 


FIRST CONSULTING GROUP, INC.


 


 


	
  By:

  	
   
   /s/ Douglas G. Bergeron

  	
   

  
	
   

  	
   
  Douglas G. Bergeron

  
	
   

  	
    Chairman

  



 


 


AGREED:


 


	
   

  	
     /s/ Luther J. Nussbaum

  	
   

  
	
   

  	
   
  Luther J. Nussbaum

  



 


cc:        Jan
Blue, Vice President


 


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