Exhibit 10.38 - First Amendment to Senior Management Agreement with Susan Gallagher


    EXHIBIT
      10.38

     

    

      FIRST
        AMENDMENT

      TO

      SENIOR
        MANAGEMENT
        AGREEMENT

       

       

      WHEREAS,
        Huron Consulting Group LLC, a Delaware limited liability company (the
“Company”),
        has
        entered into a Senior Management Agreement, effective as of May 15, 2002
        (the
“Agreement”)
        with
        Susan Gallagher (the
        “Executive”);

       

      WHEREAS,
        the Company is wholly owned by Huron Consulting Group, Inc., a Delaware
        corporation (the “Parent”);

       

      WHEREAS,
        the Parent contemplates the consummation of an initial public offering of
        its
        common stock (the “IPO”);
        and

       

      WHEREAS,
        the Executive and the Company desire to amend the Agreement, subject to and
        effective simultaneous with the Closing of the IPO.

       

      NOW,
        THEREFORE, the Agreement is hereby amended, effective as set forth in Paragraph
        4 below, as follows:

       

      1.  The
        Agreement is hereby amended by restating in its entirety Section 6.4, as
        follows:

       

      6.4 Change
        of Control.
        

       

      (a) The
        provisions of Section 6.1 and 6.2 hereof to the contrary notwithstanding,
        if
        (i) Executive is terminated by the Company without Cause or Executive
        resigns for CoC Good Reason (defined below) in either case during the period
        commencing on a Change of Control (defined below) and ending on the second
        anniversary of the Change of Control (such two-year period being the
“Protection
        Period”
        hereunder), or (ii) Executive reasonably demonstrates that the Company's
        termination of Executive's employment (or event which, had it occurred following
        a Change of Control, would have constituted CoC Good Reason) prior to a Change
        of Control was at the request of a third party who was taking steps reasonably
        calculated to effect a Change of Control (or otherwise in contemplation of
        a
        Change of Control) and a Change of Control actually occurs, (each a
“Qualifying
        Termination”),
        then
        Executive shall be entitled to receive: (A) an amount in cash equal to the
        then-prevailing target amount of Executive’s Annual Bonus (“Target
        Bonus”)
        during
        the year of termination multiplied by a fraction, the numerator of which
        is the
        number of completed days (including the date of termination) during the year
        of
        termination and the denominator of which is 365, (B) an amount in cash equal
        to
        the sum of Executive’s annual Base Salary and annual Target Bonus, and (C)
        continuation of medical benefits until the first anniversary of the date
        of such
        termination upon the same terms as exist for Executive immediately prior
        to the
        termination date. Following any termination described in this Section 6.4,
        the
        Company shall continue to have all other rights available hereunder (including,
        without limitation, all rights under the Restrictive Covenants and any
        restrictive covenants set forth in any plan, award and agreement applicable
        to
        Executive, at law or in equity). Subject to the Executive's execution of
        the
        Release described in Section 10.1, the amounts described in (A) and (B) shall
        be
        paid in a lump sum within ten (10) days after the date of termination. Such
        amounts or benefits shall not be subject to mitigation or offset, except
        that

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      medical
        benefits may be offset by comparable benefits
        obtained by Executive in connection with subsequent employment. 

       

      (b) Anything
        set forth in any equity plan, equity award or any other provision of this
        Agreement between the Company and Executive to the contrary notwithstanding,
        all
        of Executive’s outstanding equity grants that were awarded at or prior to the
        time of the Change of Control shall fully vest upon the occurrence of a
        Qualifying Termination.

       

      (c) 
        The
        compensation and benefits described in Section 6.4(a) and 6.4(b) shall be
        in
        lieu of compensation and benefits provided otherwise for a termination under
        Section 6.2 of this Agreement and any other plan or agreement of the Company,
        whether adopted before or after the date hereof, which provides severance
        payments or benefits.

       

      (d) If
        it is
        determined that any amount, right or benefit paid or payable (or otherwise
        provided or to be provided) to Executive by the Company or any of its affiliates
        under this Agreement or any other plan, program or arrangement under which
        Executive participates or is a party (collectively, the “Payments”),
        would
        constitute an “excess parachute payment” within the meaning of Section 280G of
        the Internal Revenue Code of 1986, as amended from time to time (the
“Code”),
        subject to the excise tax imposed by Section 4999 of the Code, as amended
        from
        time to time (the “Excise
        Tax”),
        then
        the amount of the Payments payable to the Executive under this Agreement
        shall
        be reduced (a “Reduction”)
        to the
        extent necessary so that no portion of such Payments payable to the Executive
        is
        subject to the Excise Tax.

       

      All
        determinations required to be made under this Section 6.4(d) and the assumptions
        to be utilized in arriving at such determination, shall be made by an
        independent, nationally recognized accounting firm mutually acceptable to
        the
        Company and the Executive (the “Auditor”);
        provided that in the event a Reduction is required, the Executive may determine
        which Payments shall be reduced in order to comply with the provisions of
        Section 6.4(d). The Auditor shall promptly provide detailed supporting
        calculations to both the Company and Executive following any determination
        that
        a Reduction is necessary. All fees and expenses of the Auditor shall be paid
        by
        the Company. All determinations made by the Auditor shall be binding upon
        the
        Company and the Executive.

       

      (e) For
        purposes of this Section 6.4 (and distinguished from a “Qualified Change of
        Control” provided under certain other circumstances under the Agreement), the
        term “Change
        of Control”
shall
        be deemed to have occurred upon the first to occur of any event set forth
        in any
        one of the following paragraphs of this Section 6.4(e):

       

      (i)
         any
        Person becomes the Beneficial Owner, directly or indirectly, of securities
        of
        the Parent (not including in the securities beneficially owned by such Person
        any securities acquired directly from the Parent or its Affiliates) representing
        40% or more of the combined voting power of the Parent’s then outstanding
        securities; or 

       

      (ii)
         there
        is
        consummated a merger or consolidation of the Parent or any direct or indirect
        subsidiary of the Parent with any Person, other than (a) a merger or
        consolidation which would result in the voting securities of the Parent or
        such
        subsidiary (as the case may be) outstanding immediately prior to such merger
        or
        consolidation continuing to represent (either by remaining outstanding or
        by
        being converted into voting securities of the surviving entity or
        any

       

      
        
          
          

        

        
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      parent
        thereof) at least 60% of the combined voting
        power of the securities of the Parent, or by the Parent (directly or indirectly)
        in such subsidiary, or such surviving entity or any parent thereof outstanding
        immediately after such merger or consolidation, (b) a merger or consolidation
        effected to implement a recapitalization of the Parent (or similar transaction)
        in which no Person other than existing security holders is or becomes the
        Beneficial Owner, directly or indirectly, of securities of the Parent (not
        including in the securities Beneficially Owned by such Person any securities
        acquired directly from the Parent or its Affiliates) representing 40% or
        more of
        the combined voting power of the Parent’s then outstanding securities, or (c) a
        merger or consolidation of a subsidiary of the Parent that does not represent
        a
        sale of all or substantially all of the assets of the Parent; or 

       

      (iii)
         the
        shareholders of the Parent approve a plan of complete liquidation or dissolution
        of the Parent (except for a plan of liquidation or dissolution effected to
        implement a recapitalization of the Parent (or similar transaction) in which
        no
        Person other than existing holders of voting securities is or becomes the
        Beneficial Owner, directly or indirectly, of securities of the Parent (not
        including in the securities Beneficially Owned by such Person any securities
        acquired directly from the Parent or its Affiliates) representing 40% or
        more of
        the combined voting power of the Parent’s then outstanding securities); or


       

      (iv) there
        is
        consummated an agreement for the sale or disposition of all or substantially
        all
        of the assets of the Parent or of the Company to a Person, other than a sale
        or
        disposition by the Parent of all or substantially all of the assets of the
        Parent or a sale or disposition by the Company of all or substantially all
        of
        the assets of the Company (as the case may be) to an entity, at least 60%
        of the
        combined voting power of the voting securities of which are owned by
        shareholders of the Parent (or by the Parent, in the case of a sale by the
        Company) in substantially the same proportions as their ownership of the
        Parent
        (or the Company) immediately prior to such sale.

       

      Notwithstanding
        the foregoing, a “Change of Control” shall not be deemed to have occurred (1) by
        virtue of the consummation of any transaction or series of integrated
        transactions immediately following which the record holders of the common
        stock
        of the Parent immediately prior to such transaction or series of transactions
        continue to have substantially the same proportionate ownership in an entity
        which owns all or substantially all of the assets of the Parent immediately
        following such transaction or series of transactions, or (2) as a result
        of a
        distribution by HCG Holdings, LLC of its common stock or other securities
        of the
        Parent to its members (other than in connection with a transaction if clauses
        (i) or (ii) of the definition of “Change of Control” above applied by
        substituting “HCG Holdings, LLC” in each place with the “Parent” appears but
        without taking into account any references to subsidiaries contained in clause
        (ii)).

       

      For
        purposes of this Change of Control definition, (A) “Beneficial
        Owner”
shall
        have the meaning set forth in Rule 13d-3 under the Exchange Act, (B)
“Exchange
        Act”
shall
        mean the Securities Exchange Act of 1934, as amended from time to time, (C)
        “Person”
shall
        have the meaning given in Section 3(a)(9) of the Exchange Act, as modified
        and
        used in Sections 13(d) and 14(d) thereof, except that such term shall not
        include (1) HCG Holdings, LLC, any Related Party, the Parent, the Company
        or any
        of the Parent’s direct or indirect subsidiaries, (2) a trustee or other
        fiduciary holding securities under an employee benefit plan of the Company
        or
        the Parent or any of their Affiliates, (3) an underwriter temporarily holding
        securities pursuant to an

       

      
        
          
          

        

        
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      offering
        of such securities, or (4) a corporation
        owned, directly or indirectly, by the stockholders of the Parent in
        substantially the same proportions as their ownership of stock of the Parent,
        (D) "Affiliate"
        shall
        have the meaning set forth in Rule 12b-2 promulgated under Section 12 of
        the
        Exchange Act and (E) “Related
        Party”
shall
        mean (i) any member of HCG Holdings existing on the date hereof or any Affiliate
        of such members or (ii) any trust, corporation, partnership or other entity,
        whose beneficiaries, stockholders, partners, owners or Persons beneficially
        holding an 80% or more controlling interest of such entity consists of any
        of
        the parties listed in clause (i) of this definition.

       

      (f) For
        purposes of this Section 6.4 (and distinguished from “Good Reason” provided
        under certain other circumstances under the Agreement), the term “CoC
        Good Reason”
means
        the occurrence of any of the following within the twenty-four (24) month
        period
        following a Change of Control without the express written consent of Executive:
        

       

      (i)
        any
        material breach of the Company of the Agreement which has not been cured
        within
        twenty (20) days after notice of such non-compliance has been given by Executive
        to the Company; 

       

      (ii)
        a
        material diminution of duties of Executive;

       

      (iii)
        any
        reduction in Base Salary, other than in connection with an across-the-board
        reduction in Base Salaries applicable in like proportions to all similarly
        situated executives of the Company and any direct or indirect parent of the
        Company;

       

      (iv)
        assignment of duties to Executive that are materially inconsistent with
        Executive's position and responsibilities described in this Agreement;


       

      (v)
        the
        failure of the Company to assign this Agreement to a successor to the Company
        or
        the Parent or failure of a successor to the Company or the Parent, as the
        case
        may be, to explicitly assume and agree to be bound by this Agreement; or
        

       

      (vi)
        requiring Executive to be principally based at any office or location more
        than
        fifty (50) miles from the current offices of the Company in Chicago, Illinois.
        

       

      The
        foregoing to the contrary notwithstanding, if the Company or the Parent is
        acquired as a subsidiary or division of another company, in the absence of
        other
        grounds, the Executive shall not have incurred “CoC Good Reason” under
        subparagraph (iv) on the ground that the Parent has ceased to be a reporting
        company pursuant to Section 13 and Section 15(d) of the Securities Exchange
        Act
        of 1934 as a result of the Change of Control.

      


      2.  Section
        10.1 of the Agreement is hereby amended by adding the words “and Section 6.4”
immediately following the words “Section 6.1 and Section 6.2” and adding the
        words “or Section 6.4” immediately following the words “Section 6.1 or Section
        6.2” thereof. 

       

      3.  This
        First Amendment and the Agreement shall be construed and enforced in accordance
        with, and all questions concerning the construction, validity, interpretation
        and performance of this First Amendment and the Agreement shall be governed
        by,
        the laws of the State of Illinois without giving effect to provisions thereof
        regarding conflict of laws.

       

      
        
          
          

        

        
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      4.  This
        First Amendment shall be effective simultaneous with the closing of the IPO.
        In
        the event that the IPO is not consummated prior to May 31, 2005, this First
        Amendment will become null and void and of no force or effect (including
        in the
        event of the consummation of an IPO subsequent to such date). Following the
        effectiveness of this First Amendment and except as specifically set forth
        in
        this First Amendment, the Agreement shall remain in full force and effect
        and,
        as amended by this First Amendment, is hereby ratified and confirmed by the
        Company and the Executive.

       

      [Signature
        Page Follows]

       

       

       

      
        
          
          

        

        
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    IN
      WITNESS WHEREOF, the parties hereto have executed this First Amendment as of
      the
      dates written below.

     

    

      THE
        COMPANY:

       

      HURON
        CONSULTING GROUP LLC

       

      By:_/s/
        George Massaro_______________

       

      Its:_COO___________________________

       

      Date:
        September      
        ,
        2004

      
 

       

      THE
        PARENT

       

      HURON
        CONSULTING GROUP, INC.

       

      By:_/s/
        George Massaro ________________

       

      Its:__COO___________________________

       

      Date:
        September     
        ,
        2004

       

      


       

      EXECUTIVE:

       

      _/s/
        Susan Gallagher____________________

      Susan
        Gallagher

       

      Date:
        September 24,
        2004

    

     

     

     

     

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