Offer Letter

Change in Control

 

 

 

 

 

 

 

Exhibit 10.63

 

http://www.sec.gov/Archives/edgar/data/1192305/000110465906052127/g154711kni001.jpg

 

May 18, 2006

 

 

PERSONAL & CONFIDENTIAL

 

Michael J. Jeffery

8 Nichols Road

Landgrove, VT 05148

 

Dear Michael:

 

LECG Corporation, a Delaware corporation, on behalf of itself and its wholly-owned subsidiary, LECG, LLC (collectively, “LECG” or the “Company”), is very pleased to confirm its offer for you to join the Company in a senior management role as its Chief Operating Officer (“COO”). Should you accept our offer, the commencement of your employment (“Effective Date”) will be May 15, 2006. This letter agreement will set forth the terms of your employment relationship with LECG, as well as some of LECG’s policies associated with your work at LECG.

 

Duties and Responsibilities.

 

You will be the COO and will be responsible for managing the operations of the Company, its subsidiaries and affiliates, as set forth in the job description attached hereto and incorporated herein by this reference. This is a full-time position reporting directly to the Chairman of the Board. You will also continue as a member of the Board of Directors, but will no longer receive cash or equity compensation for that service.

 

Compensation.

 

You will be compensated based on a salary and bonus plan. Your base salary will be set at a rate of $550,000 per annum. You are eligible for a target annual bonus of $550,000 subject to certain financial and management performance criteria to be established by the Compensation Committee of the Board of Directors. The  bonus plan objectives for 2006 have not yet been determined but will be aligned with the objectives established for the Chairman. Your salary will be reviewed on an annual basis for discretionary adjustment by the Compensation Committee as part of its overall salary review process for senior management. As we understand your availability during part of June and August may be limited due to pre-existing commitments, you have agreed to approximately 6 weeks of unpaid leave during the period, on such terms as is agreed with the Company’s Chief Financial Officer.

 



 

I will also request that the Compensation Committee approve a grant of 7,500 options to you with a 7 year vesting period at their meeting on July 26-27, 2006. The grant, if approved, would be effective August 1, 2006. These Options will be granted pursuant to the LECG Corporation’s 2003 Stock Option Plan (“Plan”), as amended from time to time. A copy of the Plan will be provided to you. You acknowledge that you will read the Plan, and you and LECG agree that your respective rights and responsibilities with regard to such Options will be governed solely by the terms of the Plan, as amended from time to time. These Options will be subject to, among other things, any splits or other similar events that may occur in the future which are applicable to these Options as provided for in the Plan.

 

The exercise price for these Options will be the “Fair Market Value” of LECG Corporation’s stock on the date of grant under the terms of the Plan. Because LECG Corporation’s shares are traded on NASDAQ, the Fair Market Value used to establish the exercise price for your Options will be the closing sales price for LECG Corporation’s stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal on the date of your Option grant.

 

We will provide you with a customized Non-Qualified Option Agreement. You must sign and return the customized Non-Qualified Option Agreement to LECG within fourteen (14) days of your receipt of the Option Agreement.

 

Office Location.

 

It is anticipated that you generally will spend at least three weeks per month of your time in the Company’s offices, with a focus on the offices in Emeryville, and Washington, D.C., subject to coordination with my schedule and the schedules of our Chief Financial Officer and Director of Administration. However, LECG is also willing to secure a small office space in Manchester, Vermont to permit you to work from Vermont, subject to cost and logistics assessment by our Director of Administration. LECG does not intend to request that you relocate from Vermont to Emeryville, California or Washington, D.C. Coach airfare reimbursement will be based on travel originating in Albany, New York or Boston, Massachusetts.

 

Benefits

 

You will be entitled to participate in the employee benefits afforded to all of the Company’s employees, subject to eligibility requirements. Each of these benefits is subject to revision from time to time, with respect to the benefit level, or even whether a particular benefit continues to be offered. To the extent that you elect to participate in these benefits, you would be subject to the same revisions and changes to such benefits as other LECG employees.

 

LECG also offers participation for employees in both a 401(k) Plan, Section 125(k) Flexible Spending Plan and Deferred Compensation Plan. To the extent LECG provides a match to employees’ 401(k) contributions, this will be provided to you.

 

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You may elect to receive company group health insurance, vision, dental and prescription drug coverage. You can purchase additional dependent coverage through the plan. Currently, LECG employees pay a portion of the costs of certain insurance benefits for themselves and their families (including a life and accidental death and dismemberment policy and a long-term disability plan), and the amounts paid by the employees (via payroll deductions) may vary over time due to changes in the costs and availability of coverage. You will be subject to the same requirements to pay a portion of these costs as other LECG employees. Supplemental life insurance is also available at your own expense. Your health benefits coverage will begin on the first day of the first full month following your hire date, provided you enroll within 25 days of your hire date. Delay in completing enrollment forms could delay entry into the plans until the next open enrollment period. Open enrollment periods are held once per year.

 

You will be entitled to thirty (30) days of paid vacation per year. There are eight (8) paid holidays and two personal days offered each year. LECG does not define a standard number of sick days; however, we consider 10 business days or fewer to be reasonable.

 

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Business Expenses

 

LECG will reimburse you for all reasonable and necessary business expenses incurred in the performance of your duties, subject to submission of appropriate receipts.

 

Terms

 

Your employment with LECG is based on the mutual consent of you and LECG, and accordingly either LECG or you may terminate your employment and this agreement at any time, with or without cause, and without payment of severance. If you decide to terminate your employment with LECG, you agree that you will provide LECG with thirty (30) days prior written notice addressed to the Chairman of the Board if Directors. Upon termination of your affiliation with LECG, you agree that you will no longer state that you are an employee of LECG.

 

You agree that you will abide by all policies of LECG, as may be amended from time to time. LECG reserves the right to change any of its policies from time to time, including policies discussed in this agreement, as business conditions warrant. Any such changes will be communicated upon their adoption.

 

Confidentiality; Non-Solicitation of Employees

 

You agree to hold confidential and for the sole benefit of LECG and its clients all non-public information, knowledge (whether verbal or written and howsoever stored or recorded), documents and other materials which you may create or acquire or in any way relating to LECG or its business (“Confidential Information”). Such Confidential Information is strictly confidential and must not be disclosed to anyone outside LECG or its clients, including family members or any LECG employee who is not entitled to the information, except as required by legal process or proceeding. If disclosure is required by law or compelled by legal proceeding, you agree to notify LECG’s General Counsel as soon as is practical of any request for the disclosure of Confidential Information.

 

Confidential Information does not include any information, knowledge, document or other material that is or becomes known to the public generally by means other than any disclosure thereof by you or any other person under a similar confidentiality obligation to LECG. Any doubts about whether any information is confidential should be resolved in favor of confidentiality. You shall not disclose, use, copy, publish, summarize or remove from the Company’s premises any Confidential Information except (i) during your employment with LECG to the extent reasonably necessary to carry out your responsibilities and (ii) after the termination of your employment with LECG, if and only if you obtain prior written consent of LECG.

 

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You further agree that during your employment period and for one (1) year after the termination thereof, you will not directly or indirectly, on your own behalf or on behalf of any other party, solicit or induce, or cause others to solicit or induce, any person employed by or affiliated with, or acting as an independent contractor to LECG, its subsidiaries or affiliated entities, to terminate his/her relationship with LECG, its subsidiaries or affiliated entities.

 

Administrative Support

 

LECG will provide you with an appropriate level of executive assistance.

 

Final Agreement.

 

This offer letter is final and supersedes all previous and contemporaneous oral negotiations, writings and understandings between the parties concerning the subject matter of this offer letter, and this offer letter and its attachment constitutes the entire agreement between us.

 

Michael, all of us at LECG very much look forward to having you as part of our management team. Please sign below to indicate your acceptance of the terms contained in this letter and its attachment.

 

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Very truly yours,

 

 

 

/s/ David J. Teece

 

 

David J. Teece

 

Chairman of the Board

 

 

 

 

Agreed to and accepted this 26 day of May, 2006.

 

 

 

/s/ Michael J. Jeffery

 

 

Michael J. Jeffery

 

 

 

 

 

DJT/crk

 

Attachment: COO Job Description

 

 

 

cc:

John C. Burke (w/encl.)

 

 

Marvin A. Tenenbaum, Esq. (w/encl.)

 

 

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LECG CORPORATION

CHIEF OPERATING OFFICER

[Job Description]

 

REPORTS TO:

 

The Chairman of the Board of Directors.

 

FUNCTION:

 

Provides overall leadership in implementing the strategic direction of the Company, and in developing the tactics and business plans necessary to realize margin improvement, revenue and earnings growth, and to increase shareholder value.

 

Manages the overall business to ensure strategic and business plans are effectively implemented, the results are monitored and reported to the Board, and financial and operational objectives are attained.

 

MANAGEMENT PHILOSOPHY OF THE FIRM:

 

LECG is a professional services firm that operates with a unique “at risk” business model. The business is organized around the “experts,” and the “at-risk” model provides them with professional autonomy, flexibility and the support of a highly capable staff and management team, but without corporate hierarchy. The “at risk” model is central to the firm’s culture, which maximizes the potential capabilities and energies of highly talented experts. Corporate management is intentionally lean, yet experienced in guiding professional service companies. It is our view that traditional employer-employee authority structures and bureaucratic policies inhibit the productivity of experts and often run counter to their professional values.

 

The firm provides a comprehensive support infrastructure, including information technology and administrative support services, such as marketing, billing, project accounting, receivables collection and internal and external financial reporting. The administrative support functions are highly centralized and integrated, thereby providing seamless support across a large number of offices and practice disciplines.

 

PERCEIVED MANAGEMENT NEEDS:

 

Over the past several years, the firm has experienced significant growth in the number of experts and professionals through extensive hires and acquisitions. The firm has also expanded its practice areas and opened offices in new locations – domestically and overseas. This requires careful management of an ever-growing and geographically diverse workforce and places significant demands on senior management, and on our internal systems, procedures and controls. The “non-traditional” nature of the firm’s business model, in conjunction with the

 

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rapid rate of growth presents unique management challenges, demanding a premium on “people skills.”

 

The firm is now at a crucial juncture, following its successful IPO and three years of 30% growth. It is now poised to implement its long term strategy to be pre-eminent in the industry, growing revenues from $300 million to in excess of $1 billion while maintaining its current high quality of service. As such, the firm seeks a Chief Operating Officer who has the energy, capabilities and experience to work closely with the Chairman and the Board of Directors to build shareholder value through the creation of a world-class, world renowned and highly profitable professional services firm. Key to achieving this success will be the continued development of high quality process and infrastructure necessary to support the firm’s growth aspirations.

 

KEY AUTHORITIES AND RESPONSIBILITIES:

 

A.                                   General Functions and Responsibilities

 

1.                                       Responsible for the attainment of long and short term financial and operational goals, including revenue growth, expense, and cost control, and margin management.

 

2.                                       Responsible for the overall administration of the firm with a strong interface with experts and senior management to ensure future growth and improve margins, and the establishment and implementation of all policy and operating initiatives.

 

3.                                       Provide effective leadership to the management and the employees of the firm and establish an effective means of control and coordination for all operations and activities as follows:

 

a.                                       Establish performance goals, allocates resources and assesses policies for senior corporate management.

 

b.                                      Interact extensively with Chief Financial Officer, Chief Accounting Officer, Director of Administration and General Counsel. Departments reporting to the COO include human resources, information technology services, facilities (operations), accounting and finance and legal.

 

c.                                       Direct internal communications with respect to administrative matters, establishes priorities and objectives with senior

 

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management team and executes directives from Chairman and Board.

 

d.                                      Direct operations of the firm to meet plans and financial goals, Sarbanes-Oxley compliance and governance requirements.

 

4.                                       Foster a corporate culture that promotes ethical practices, integrity and a positive work climate, enabling the Company to attract, retain and motivate a diverse group of quality employees including:

 

a.                                       Delivery of highest level of service internally to experts and externally to clients in a cost-effective and highly ethical manner.

 

b.                                      Facilitate the resolution of issues between practice areas and individual experts in coordination with the Chairman and the Director of Administration.

 

5.                                       Keep the Chairman and the Board fully informed on all aspects of the Company’s operational and financial affairs, and on all matters of significant relevance to the Company including potential threats, opportunities and recommended actions.

 

6.                                       Direct and participate in acquisition and growth activities to support overall business objectives and plans including management of acquisition planning, due diligence, integration and financial and acquisition monitoring.

 

7.                                       Develop and maintain a sound, effective organization structure, and ensure capable management succession, progressive employee training and development programmes, and reports regularly to the Board on these matters and senior executive performance. Initial focus includes development of a plan to identify and address current and future organizational requirements (such as a robust human resources function) and building of organizational capabilities (particularly in the area of information technology).

 

8.                                       Ensure that effective communications and appropriate relationships are maintained with the shareholders of the Company and other stakeholders as follows:

 

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a.                                       Participate along with the Chairman and the Chief Financial Officer in investor relations, setting communications philosophy and strategy.

 

b.                                      Participate in capital market development, including financing strategies and bank relationships.

 

9.                                       Work with the Chief Financial Officer to direct short-term and long-range planning and budget development to support strategic business goals including:

 

a.                                       Develop an operational and financial strategy that supports strategic vision of the firm as articulated by the Chairman and the Board.

 

b.                                      Complete annual planning and budgeting in coordination with the Chief Financial Officer.

 

c.                                       Monitor performance against goals and objectives to ensure progress in being made and corrective action – if necessary – is being taken.

 

B.                                     Strategy/Risks

 

1.                                       Develop with the Chairman strategic plans to ensure the Corporation’s profitable growth and overall success. This includes updating and making changes as required, and involving the Board in the early stages of developing strategy.

 

2.                                       Turn the first year of the strategic plan into a detailed operating plan and budget. The main financial and operating objectives are then approved by the Board and become the basis by which all executive and employee pay for performance goals are set and measured.

 

3.                                       Identify, in conjunction with other senior executives, the key risks with respect to the Company and its businesses and reviews such risks and strategies for managing them with the Board.

 

4.                                       Ensure that the assets of the Company are adequately safeguarded and maintained.

 

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C.                                     Financial Reporting

 

1.                                       Oversee the quality and timeliness of financial reporting. Reports to the Board, in conjunction with the Chief Financial Officer, on the fairness and adequacy of the financial reporting of the Company to its shareholders.

 

2.                                       Ensure, in conjunction with the Chief Financial Officer, that the annual and interim reports of the Company do not contain any misrepresentations and that the annual and interim financial statements fairly present, in all materials respects, the financial condition, results of operations and cash flows of the Company.

 

3.                                       Design (or supervise the design of), implement, maintain and periodically evaluate, in conjunction with the Chief Financial Officer and the Chief Accounting Officer, the effectiveness of:

 

a.                                       Internal controls to provide reasonable assurances that the financial statements of the Corporation are fairly presented in accordance with generally accepted accounting principles; and

 

b.                                      Disclosure controls and procedures to provide reasonable assurances that material information relating to the Company is made known to the Chief Operating Officer by others within the Company. Reports any deficiencies in such controls and procedures to the Audit Committee in coordination with the Chief Accounting Officer.

 

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EX-10.56 6 a2191169zex-10_56.htm EXHIBIT 10.56

Exhibit 10.56

 

Confidential

November 10, 2008

 

o

Employee’s Copy

 

o

Employer’s Copy

 

 

Change in Control Retention Agreement

 

[NAME]

[ADDRESS]

 

Dear [NAME]:

 

LECG, LLC, a California limited liability company, (the “Company”) wants to continue to retain your services and recognizes that a Change in Control (as defined below) may result in a material alteration or diminishment of your position and responsibilities and substantially frustrate the purpose of your commitment to the Company and forbearance of career options.  The Company has determined therefore to provide enhanced severance and other benefits in the event of a Change in Control of LECG Corporation, a Delaware corporation (“LECG”) should the Company decide to pursue any such transaction. In consideration of the premises and mutual covenants contained below and for other good and valuable consideration, the receipt and sufficiency of which is mutually acknowledged, the Company and you, intending to be legally bound, agree as follows:

 

Duties

 

As part of this Retention Agreement (the “Agreement), you agree to (i) continue to perform all of your current duties for the Company; (ii) assist with various non-operating activities, which could include outside investment, financing, transactions, or business reconfiguration as the Board of Directors (the “Board) of LECG requests; (iii) carry out any other tasks the Board reasonably requests to facilitate such activities or any Change in Control; and (iv) perform the duties assigned to you following any such activities, including any such restructuring or Change in Control.

 

 

 

Change in Control

 

If a Change in Control (as defined in Annex A) occurs while you are employed, any unvested or unexercisable equity or equity-based compensation (as the case may be) will automatically vest and/or become exercisable as of the Change in Control (“Accelerated Vesting”), unless such vesting will violate Section 409A as an impermissible acceleration of deferred compensation, in which event the vesting will occur in

 



 

 

 

accordance with the terms of the underlying equity compensation agreement.

 

 

 

Severance

 

If, within 12 months following a Change in Control, your employment with the Company ends because of a termination without Cause (as defined in Annex A) or as a result of your resignation for Good Reason (as defined in Annex A), you will be entitled to the following, provided that you satisfy the conditions under the Release; Payment Timing provisions:

 

(i)           any accrued base salary not previously paid and any accrued prior year bonus not paid prior to such date;

 

(ii)          two times the annual base salary in effect on the date of termination (or, if higher, immediately preceding the Change in Control) (“Cash Severance”);

 

(iii)         payment by the Company of premiums for continuation health coverage under COBRA for the shorter of 18 months following cessation of employment and the period for which you are eligible for and elect such coverage;

 

(iv)         elimination of any requirement to repay any portion of a sign-on bonus; and

 

(v)          payment of any guaranteed component of the bonus due in the year in which the Change of Control occurs.

 

 

 

 

 

Except to the extent the law requires otherwise or as provided in this section, neither you nor your beneficiary or estate will have any rights or claims under this Agreement or otherwise to receive severance or any other compensation, or to participate in any other plan, arrangement, or benefit, after such termination or resignation. If you resign voluntarily or the Company terminates your employment for Cause or your employment ends for any reason other than termination without Cause or your resignation for Good Reason, you will forfeit this payment and acceleration.

 

 

 

Release;
Payment Timing

 

As a condition to receiving the amounts and benefits set forth in clauses (ii) — (v) of the Severance provision, you must execute and not revoke a severance agreement and release of claims drafted by and satisfactory to the Company (the “Severance Agreement”), which Severance Agreement will contain a full release (the “Release) of the Company (other than with respect to exceptions the Company specifies therein).

 

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The Company will pay the Cash Severance, after and if you sign the Release and any revocation period expires, in a single lump sum within 60 days following the date your employment ends (or, if you are subject to the six month delay in the Compliance with Code Section 409A provision, the date it provides), provided that if the 60th day falls in the calendar year after the year of in which your employment ends, the payment will be made no earlier than the first day of such later calendar year). Benefits under clauses (iii), (iv), and (v) of Severance will occur at the same time (or such earlier post-Release date as Section 409A permits).

 

 

 

No Effect on
Running Business
or Employment

 

You understand and agree that the existence of this Agreement will not affect in any way the right or power of the Company or its stockholders to make or authorize any adjustments, recapitalizations, reorganizations, or other changes in Company’s capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or other stock, with preference ahead of or convertible into, or otherwise affecting the Company’s common stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether or not of a similar character to those described above. Nothing in this Agreement imposes any requirement on the Company to enter into or complete a Change in Control. Nothing in this Agreement restricts the Company’s rights or those of any of its affiliates to terminate your employment or other relationship at any time, with or without Cause and for any or no reason.

 

 

 

Further Effect of
Termination on
Board and Officer
Positions

 

If your employment ends for any reason, you agree that you will cease immediately to hold any and all officer or director positions you then have with the Company or any affiliate, absent a contrary direction from the Board (which may include either a request to continue such service or a direction to cease serving upon notice without regard to whether your employment has ended), except to the extent that you reasonably and in good faith determine that ceasing to serve as a director would breach your fiduciary duties to the Company. You hereby irrevocably appoint the Company to be your attorney to execute any documents and do anything in your name to effect your ceasing to serve as a director and officer of the Company and any subsidiary, should you fail to resign following a request from the Company to do so. A written notification signed by a director or duly authorized officer of the Company that any instrument, document or act falls within the authority conferred by this clause will be conclusive evidence that it does so. The Company will prepare any documents, pay any filing fees, and bear any other expenses related to this section.

 

 

 

Term; Effect

 

This Agreement begins the day you sign it (the “Effective Date”) and runs until your employment ends (and, if your employment ends in a manner that triggers Severance or other benefits hereunder, until any Company

 

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obligations under this Agreement are satisfied). This Agreement applies only with respect to the first Change in Control to occur after the Effective Date.

 

 

 

Amendment;
Waiver

 

Neither you nor the Company may modify, amend, or waive the terms of this Agreement other than by a written instrument signed by you and an executive officer of the Company, with the prior approval of the Board. Either party’s waiver of the other’s compliance with any provision of this Agreement does not waive any other provision of this Agreement or any subsequent breach by such party of a provision of this Agreement.

 

 

 

No Mitigation
or Offset

 

You are not required to mitigate the payments under this Agreement by seeking other employment or otherwise, and the Company will not offset its obligations under this Agreement to reflect compensation you receive from other employers.

 

 

 

Governing Law;
Jury Waiver;

 

The laws of the State of California (other than its conflict of laws provisions) govern this Agreement. The Company and you each hereby irrevocably waive any right to a trial by jury in any action, suit or other legal proceeding arising under or relating to any provision of this Agreement.

 

 

 

Assignment

 

This Agreement binds the Company, its successors or assigns, and your heirs and the personal representatives of your estate. Without the Company’s prior written consent, you may not assign or delegate this Agreement or any or all rights, duties, obligations, or interests under it.

 

 

 

Compliance with
Code Section 409A

 

All payments under this Agreement are subject to any required tax or other withholdings. If and to the extent any portion of any payment, compensation or other benefit provided to you in connection with your employment termination is determined to constitute “nonqualified deferred compensation” within the meaning of Code Section 409A (“Section 409A” of the “Code”) and you are a specified employee as defined in Section 409A(a)(2)(B)(i), as determined by the Company in accordance with its procedures, by which determination you hereby agrees that you are bound, such portion of the payment, compensation or other benefit shall not be paid before the earliest of (i) the expiration of the six month period measured from the date of your “separation from service” (as determined under Section 409A) or (ii) the date of your death following such separation from service (the “New Payment Date”). The aggregate of any payments that otherwise would have been paid to you during the period between the date of separation from service and the New Payment Date shall be paid to the you in a lump sum on such New Payment Date, and any remaining payments will be paid on their original schedule. For purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment

 

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for purposes of Section 409A, and any payments that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. Neither the Company nor you shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A. This Agreement is intended to comply with the provisions of Section 409A and the Agreement shall, to the extent practicable, be construed in accordance therewith. Terms defined in the Agreement shall have the meanings given such terms under Section 409A if and to the extent required to comply with Section 409A. In any event, the Company makes no representations or warranty and shall have no liability to you or any other person, other than with respect to payments made by the Company in violation of the provisions of this Agreement, if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Code Section 409A but not to satisfy the conditions of that section.

 

 

 

Parachute
Cutback

 

If the payments to you under this Agreement or any other compensation owed you or becoming vested or nonforfeitable would constitute a Parachute Payment and cause you to be subject to the federal excise tax levied on certain “excess parachute payments” under Code Section 4999, then the amounts payable under this Agreement will be reduced or eliminated as follows, as determined by the Company, in the following order: (i) any cash payments, (ii) any taxable benefits, (iii) any nontaxable benefits, and (iv) any vesting of equity awards, in each case in reverse order beginning with payments or benefits that are to be paid the farthest in time from the date of change in control, to the extent necessary to maximize the Total After-Tax Payments to you. The Company’s independent, certified public accounting firm will determine whether and to what extent payments or vesting under this Agreement are required to be reduced in accordance with the preceding sentence. If there is an underpayment or overpayment under this Agreement (as determined after the application of this paragraph), the amount of such underpayment or overpayment will be immediately paid to you or refunded by you, as the case may be, with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code. For purposes of this Agreement, “Total After-Tax Payments” means the total of all “Parachute Payments” (as defined in Code Section 280G(b)(2) of the Code) made to or for the benefit of you (whether made under the Agreement or otherwise), after reduction for all applicable federal taxes (including, without limitation, the tax described in Code Section 4999).

 

 

 

Counterparts

 

This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.

 

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Notices

 

Notices must be given in writing by personal delivery, by certified mail, return receipt requested, by telecopy, or by overnight delivery. You should send or deliver your notices to the Company’s corporate headquarters, addressed to the Chairman of the Board. The Company will send or deliver any notice given to you at your address as reflected on the Company’s personnel records. You and the Company may change the address for notice by like notice to the other. You and the Company agree that notice is received on the date it is personally delivered, the date it is received by certified mail, the date of guaranteed delivery by the overnight service, or the date the fax machine confirms effective transmission.

 

 

 

Superseding Effect

 

This Agreement supersedes any prior oral or written employment, severance, or fringe benefit agreements between you and the Company that would provide benefits in connection with a Change in Control. This Agreement supersedes all prior or contemporaneous negotiations, commitments, agreements, and writings with respect to the subject matter of this Agreement. It does not supersede any obligations of the parties under the Company’s stockholders agreements or equity compensation plans. With those exceptions, all such other negotiations, commitments, agreements, and writings will have no further force or effect; and the parties to any such other negotiation, commitment, agreement, or writing will have no further rights or obligations thereunder.

 

If you accept the terms of this Agreement, please sign below.  We encourage you to consult with any advisors you choose.

 

Signatures on Page Following

 

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LECG, LLC

 

 

 

 

By:

 

 

 

Garrett Bouton

 

 

Chairman of the Board, LECG Corporation

 

 

I accept and agree to the terms set forth in this Agreement:

 

 

 

 

[NAME]

 

Dated:

 

 

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EXHIBIT A

Definitions

 

Cause

 

For purposes of this Agreement, the Company’s termination of your employment will be for “Cause” as under the definition provided in your offer letter or employment agreement with the Company as then in effect or, if no such agreement is in effect, as determined in the sole discretion of the Board, if you:

 

 

 

 

 

(i)           are convicted of, or plead guilty or nolo contendere to, any felony;

 

(ii)          breach your obligation to keep an actual or potential Change in Control and related matters confidential both within and outside the Company except as otherwise directed by the Board or otherwise interfere with a Change in Control;

 

(iii)         intentionally violate Federal or state securities laws;

 

(iv)         engage in willful misconduct or gross negligence that has or is reasonably likely to have a material adverse effect on the Company;

 

(v)          materially or repeatedly fail to perform your reasonably assigned duties for the Company, where such failure has or is reasonably likely to have a material adverse effect on the Company;

 

(vi)         materially violate any material provision of the Company’s Code of Business Ethics; or

 

(vii)        engage in fraud, embezzlement, theft or dishonesty against the Company,

 

provided that no finding of Cause shall be made pursuant to subsections (ii)-(vii) above unless the Company has provided you with written notice stating the facts and circumstances underlying the allegations of Cause and you have failed to cure such violation, if curable, within 30 calendar days following receipt thereof.  The Board will determine whether a violation is curable and/or cured in its reasonable discretion.

 

 

 

Change
in Control

 

A “Change in Control” for purposes of this Agreement means the occurrence of any one or more of the following events:

 

 

 

 

 

(i)           sale of all or substantially all of the assets of LECG to one or more individuals, entities, or groups (other than an “Excluded Owner” as defined below);

 

(ii)          a person, entity, or group (other than an Excluded Owner) acquires or attains ownership of at least 51% of the undiluted total voting power of

 

 

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LECG’s then-outstanding securities eligible to vote to elect members of the Board (“Company Voting Securities”); or

 

(iii)         completion of a merger or consolidation of LECG with or into any other entity (other than an Excluded Owner) unless the holders of the Company Voting Securities outstanding immediately before such completion, together with any trustee or other fiduciary holding securities under a Company benefit plan, hold securities that represent immediately after such merger or consolidation at least 51% of the combined voting power of the then outstanding voting securities of either LECG or the other surviving entity or its ultimate parent.

 

An “Excluded Owner” consists of LECG, the Company, any entity owned, directly or indirectly, at least 50% by LECG or the Company, any entity that, directly or indirectly, owns at least 50% of LECG or the Company, any Company benefit plan, and any underwriter temporarily holding securities for an offering of such securities.

 

 

 

Good
Reason

 

For purposes of this Agreement, “Good Reason” means, without your consent(other than in clause (vi)), the occurrence of any of the following events or actions during the 12 months following a Change in Control:

 

 

 

 

 

(i)           a reduction in your base salary as in effect immediately preceding the Change in Control;

 

(ii)          a material reduction in your title, position or reporting status, unless you are provided with a comparable title, position or reporting status, or any material diminution of your duties, responsibilities, powers or authorities;

 

(iii)         any relocation of your principal place of employment by more than 50 miles;

 

(iv)         a material breach by the Company, LECG, or any successor of any material provision of this Agreement;

 

(v)          LECG’s, the Company’s or a successor failure to offer you a position following the Change in Control with duties and base compensation that are at least substantially equivalent to those in effect immediately before the Change in Control; or

 

(vi)         during a 60 day period following the closing of a Change in Control, you choose not to remain employed by the Company.

 

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No finding of Good Reason shall be made under clauses (i)-(iv) above unless you have provided the Company with written notice within 90 days after the occurrence or omission stating with specificity the facts and circumstances underlying the allegations of Good Reason and the Company has failed to cure such violation within 30 calendar days of receipt thereof and you actually separate from service within 150 days after the event or action giving rise to Good Reason. With respect to clause (v), you must have provided the Company with written notice within 30 days after the failure, the Company has failed to cure such violation within 30 calendar days of receipt thereof and you actually separate from service within 60 calendar days after the event or action giving rise to Good Reason.  With respect to clause (vi), you must have provided the Company with written notice of your intent not to remain employed by the Company within 60 days after the closing of a Change in Control.

 

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