Exhibit 10.53

 

FAS GROUP MANAGEMENT AGREEMENT

 

This FAS Practice Management Agreement (“Agreement”) is made and entered into on
the 12th day of September, 2007 by and between LECG, LLC, a California limited
liability company (“LECG”) and Richard Boulton (“Boulton”).

 

RECITALS

 

A.        LECG engages, through one or more of its subsidiaries, including LECG
Limited, a company registered in England and Wales (“LECG UK”), in the business
of providing economic and financial analysis, expert testimony, litigation
support and other expert consulting (the “Business”); LECG and such subsidiaries
are sometimes referred to herein as a “LECG Entity” or the “LECG Entities.”

 

B.         Boulton is currently employed by LECG UK as a director expert,
resident in its London office pursuant to a Director’s Agreement dated
January 1, 2005 (the “Director Agreement”).

 

C.         Due to Boulton’s experience in managing large, international
consulting practices, LECG would like to engage Boulton to provide management
services to LECG for all of LECG’s Finance & Accounting Services practices in
the United States and Europe, which would be in addition to Boulton’s employment
by LECG UK.

 

D.         Boulton is prepared to provide such management services to LECG on
the terms and conditions set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, LECG and Boulton agree as follows:

 

1.               Effective Date. This Agreement will be effective as of
September 1, 2007 (the “Effective Date”).

 

2.               Position and Duties.

 

2.1.  As of the Effective Date, Boulton will become the Global Head of Finance &
Accounting Services for LECG. Currently, the following practice areas will be
encompassed in the Finance & Accounting Services group (the “FAS Group”):
forensic accounting and analysis, consulting on accounting and audit issues,
electronic discovery, regulatory (SEC) consulting, valuation, tax, restructuring

 

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and bankruptcy, damages analysis, intellectual property consulting, and
healthcare consulting.

 

2.2.  Boulton’s role is intended to address LECG’s need for greater
coordination, organization and leadership of the practice areas included in the
FAS Group. Boulton’s principal duties and responsibilities are as follows:

 

2.2.1.

 

Participating as a member of LECG’s Executive Management Team (“EMT”) and
reporting to LECG’s Chief Executive Officer (“CEO”);

 

 

 

2.2.2.

 

With the oversight of the CEO and the Board of Directors of LECG Corporation
(the “Board”), setting and executing the strategy to profitably build the FAS
Group with any plan having appropriate objectives and milestones;

 

 

 

2.2.3.

 

Introducing an organizational structure to the FAS Group that takes into account
geography, practice diversity and industry diversity;

 

 

 

2.2.4.

 

Helping establish the marketing and business development plans and funding
required to execute the agreed strategy for the FAS Group;

 

 

 

2.2.5.

 

Executing against specific financial metrics for the FAS Group as agreed by
Boulton, the CEO and the Board;

 

 

 

2.2.6.

 

Identifying talent both internally and externally to build future and current
leaders within the FAS Group;

 

 

 

2.2.7.

 

Recruiting and integrating top talent and acquisitions for the FAS Group and
LECG as a whole;

 

 

 

2.2.8.

 

Working to expand the revenues of the FAS Group from its existing client base,
as well as developing new client relationships for the FAS Group;

 

 

 

2.2.9.

 

Promoting synergistic relationships across the FAS Group, making full use of
LECG’s project origination fee compensation programs;

 

 

 

2.2.10.

 

Building the appropriate support structures for the FAS Group and its members;

 

 

 

2.2.11.

 

Participating in firm building activities such as training/mentoring,
interviewing, policy development and marketing;

 

 

 

2.2.12.

 

Ensuring all members of the FAS Group proactively participate in organizational
initiatives, meetings and activities; establishing a culture where staff
development is a priority within the FAS Group;

 

 

 

2.2.13.

 

Adhering to all of LECG’s policies and procedures;

 

 

 

2.2.14.

 

Operating as a key contributor at the EMT and senior management level; serving
as a key advisor to the CEO; and

 

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2.2.15.

 

Creating a premier FAS business capable of competing at the highest levels.

 

2.3.  Boulton will devote the vast majority of his time and business attention
to his dual roles as a director expert for LECG UK and as Global Head of
Finance & Accounting Services for LECG. Allocation of time between these two
roles is at Boulton’s reasonable discretion, although it is currently
anticipated by LECG and Boulton to be approximately 50:50. It is recognized that
Boulton currently provides services as a self-employed barrister at One Essex
Court, Temple, London and that it will be necessary for him to manage his
existing client obligations, which include two trials scheduled for 2008.
Boulton will use his best endeavours to reduce his barrister commitments to less
than two days per week by October 31, 2007 and to one day per week by January 1,
2008. Boulton will not accept new engagements for clients as a barrister without
consulting with LECG’s Head of Human Resources and Operations. Boulton will
commit at least two days per week on average to his role as Global Head of
Finance & Accounting Services for LECG between the date of this Agreement and
January 1, 2008.

 

2.4.  Except as expressly provided in Section 1.3, this Agreement does not
modify any of the remuneration or other provisions of the Director Agreement and
the Director Agreement will continue to govern Boulton’s rights and obligations
as a director expert. This Agreement will govern Boulton’s rights and
obligations as Global Head of Finance & Accounting Services for LECG.

 

3.               Sign-On Retention Bonus.

 

3.1.      LECG will pay Boulton a one-time sign-on retention bonus as follows:
Three Hundred Thousand Pounds Sterling (£300,000) will be paid in cash (the
“Cash Bonus”) and Boulton will also receive a grant of 95,505 shares of
restricted common stock (the “Stock Bonus”) of LECG Corporation (“Parent”). The
Cash Bonus will be paid via wire transfer within two (2) business days following
the execution of this Agreement and receipt of wire instructions from Boulton.
The Stock Bonus will be issued by Parent on October 1, 2007 pursuant to a Stock
Purchase Agreement under Parent’s 2003 Stock Plan and the number of shares so
issued will be valued based on the closing price of Parent’s common stock as
quoted on the NASDAQ National Market System on October 1, 2007.

 

3.2.      Boulton will not earn 100% of the Cash Bonus as of the date of
payment. Rather, the Cash Bonus must be earned ratably over four (4) years.
Accordingly, if Boulton voluntarily terminates his employment with LECG
(including as a result of death or disability) prior to the fourth (4th)
anniversary of the Effective Date or if Boulton’s employment is terminated for
Cause (as hereinafter defined),Boulton will repay to LECG the one-time Cash
Bonus based on a daily

 

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amortization rate of £205.48 times the number of days remaining from Boulton’s
termination date to the end of the 4th anniversary of the Effective Date.
Repayment will be made within fifteen (15) days of such termination and Boulton
agrees that LECG is authorized to offset and deduct any amounts Boulton owes to
LECG, including, but not limited to, the amount due for repayment of the
unamortized portion of the Cash Bonus, from any amounts LECG may owe to Boulton,
including, but not limited to, compensation owed to Boulton at the time of the
termination of his employment under either this Agreement or the Director
Agreement. Repayment of the Cash Bonus is not required if LECG terminates
Boulton’s employment without Cause. This provision will survive any termination
of this Agreement.

 

3.3.      Boulton will not earn 100% of the Stock Bonus as of the date of
issuance. Rather, the Stock Bonus must be earned over a four (4) year period.
The Stock Purchase Agreement for the Stock Bonus will provide that the shares
are subject to a right of repurchase in favor of Parent that expires 1/4th per
year over a four (4) year period commencing on the date of grant. The right of
repurchase is triggered if Boulton voluntarily terminates his employment
(including as a result of death or disability) or if Boulton’s employment is
terminated for Cause. Repayment of the Stock Bonus is not required, and the
Stock Bonus will immediately vest, if LECG terminates Boulton’s employment
without Cause. This provision will survive any termination of this Agreement.

 

4.               Remuneration. Boulton will be compensated for his role as
Global Head of Finance & Accounting Services for LECG on a salary plus bonus
model.

 

4.1.      Boulton’s base salary will be Two Hundred Fifty Thousand Pounds
Sterling (£250,000) per annum (the “Base Salary”), payable monthly in accordance
with LECG UK’s ordinary payroll practices. The Base Salary will be reviewed
annually by the Compensation Committee of the Board, and will be subject to
increase in its sole discretion.

 

4.2.      The organization and structure of the FAS Group is currently immature
and some fundamental and administrative efforts (i.e. recruiting talent,
designing appropriate compensation models) will need to be undertaken during
Boulton’s first twelve months of service (the “Base Period”) as the Global Head
of Finance & Accounting Services for LECG. By mutual agreement, both parties may
reduce the length of the Base Period but under no circumstances will the base
period extend beyond a twelve month period. Following the Base Period and
subject to continued employment, Boulton will be eligible for a discretionary
bonus of up to one (1) times the Base Salary based on subjective and qualitative
performance measures, as awarded by the Compensation Committee of the Board in
its sole discretion.

 

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4.3.      In the three consecutive years of Boulton’s service following the Base
Period (the “Bonus Period”), Boulton’s bonus will be determined in accordance
with this Section 4.3. The Bonus Period is separated into three twelve-month
segments: Year Two, Year Three, and Year Four.

 

4.3.1.           Within 90 days after the end of the Base Period, the annualized
net revenues (“Revenue Base”) and corresponding gross profit (“Gross Profit
Base”) and gross margin for the FAS Group produced during the Base Period by all
experts and staff assigned to the FAS Group will be measured and established by
mutual agreement of LECG and Boulton. Experts and staff must be employed by LECG
at the end of the Base Period in order for their revenues to count in the
above-mentioned calculation. Revenue, for purposes of establishing the “Revenue
Base” (and for purposes of the bonuses during the Bonus Period) will be defined
as 100% of the net revenue on an accrual basis of any engagement performed
during the Base Period to the extent such engagement is fully or partially
attributable to the FAS experts. Revenue will include reimbursable expenses and
subcontracted services billed to clients during the Base Period, but amounts
deemed uncollectible will be deducted. Gross Profit, for purposes of
establishing the “Gross Profit Base” (and for purposes of the bonuses during the
Bonus Period) will be defined as Revenue less the direct costs of performing
work, including salaries, wages, bonuses, expert fees, finders’ fees and payroll
burden incurred by directors, principals and senior and junior professional
staff in generating the Revenue, travel and other reimbursable expenses,
subcontracted services and other costs customarily included in direct costs.
Direct costs will also include the amortization of any signing bonuses or
recruiting fees paid in connection with the relevant professional staff. Direct
costs of performing work will exclude any allocation of corporate costs or
overhead. Direct costs will exclude all compensation paid to Boulton. Gross
Margin will be defined as Gross Profit divided by Revenue, expressed as a
percentage.

 

4.3.2.           As so agreed, the Revenue Base and Gross Profit Base in the
Base Year will constitute the “Base Performance” against which the financial
metrics for future bonuses will be measured .

 

4.3.3.           Within 90 days after the end of each of Year Two, Year Three,
and Year Four, Boulton will be eligible to receive a bonus based on a comparison
of the performance of the FAS Group during Year Two, Year Three or Year Four, as
applicable, against the Base Performance.

 

4.3.3.1.            The Year Two bonus will be based on the performance of the
FAS Group during Year Two, as compared to the Base Performance. The bonus will
be equal to 5% of the difference between the Gross Profit in

 

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Year Two and 105% of the Gross Profit Base. For example, if the Gross Profit
Base is equal to $50 million and the Year Two Gross Profit is equal to $70
million, the bonus-eligible profit is ($70MM – ($50MM x1.05)) , or $17.5
million, and the corresponding bonus equals 5% of $17.5 million, or $875,000.

 

4.3.3.2.            The Year Three bonus will be based on the performance of the
FAS Group during Year Three, as compared to the Base Period. The bonus will be
equal to 5% of the difference between the Gross Profit in Year Three and 110.3%
of the Gross Profit Base.

 

4.3.3.3.            The Year Four bonus will be based on the performance of the
FAS Group during Year Four, as compared to the Base Period. The bonus will be
equal to 15(fifteen) % of the difference between the Gross Profit in Year Four
and 115.8% of the Gross Profit Base.

 

4.4.  LECG will reimburse Boulton for necessary and reasonable travel,
entertainment and other business expenses incurred in connection with his duties
as Global Head of Finance & Accounting Services for LECG. LECG will reimburse
Boulton for such expenses upon presentation of an itemized account and
appropriate supporting documentation, all in accordance with LECG’s policies.
LECG will also reimburse Boulton for reasonable accommodation costs in New York
if it is mutually agreed that the amount of time spent by Boulton in New York
warrants more permanent accommodation.

 

4.5.  LECG will deduct or withhold from any amounts owed to Boulton applicable
federal, state, provincial, local or foreign withholding taxes, excise taxes or
employment taxes imposed with respect to Boulton’s compensation or other
payments from LECG including, but not limited to, wages, bonuses, dividends
and/or the receipt or vesting of restricted common stock.

 

5.     Termination.  Boulton’s role as Global Head of Finance & Accounting
Services for LECG is “at will” and based on the mutual consent of LECG and
Boulton. This Agreement will terminate on thirty (30) days advance written
notice in the event of Boulton’s voluntary resignation or retirement, permanent
disability due to physical or mental illness (continuing for a period of at
least 6 consecutive months), or as a result of a termination by LECG without
Cause. This Agreement will terminate immediately in the event of Boulton’s death
or in the event that LECG terminates Boulton’s employment for “Cause.” “Cause”
means Boulton’s (1) commission of a felony or a crime involving moral turpitude
or the commission of any other act or omission involving dishonesty or fraud
with respect to any LECG Entity or involving harassment of or discrimination
against any employees of any LECG Entity; (2) misappropriation of funds or
assets of any LECG Entity for personal use; (3) continued substantial and
repeated neglect of his duties after written notice from the

 

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Board, and such neglect has not been cured within 30 days after Boulton receives
notice thereof from the Board; (4) gross negligence or willful misconduct in the
performance of his or her duties after written notice from the Board, and such
failure has not been cured within ten days after Boulton receives notice thereof
from the Board; (5) Boulton engaging in conduct constituting a breach of the
Director Agreement or this Agreement; or (6) the failure of the FAS Group to
achieve at least 100% of the Gross Profit Base in Year Two or Year Three. Upon
termination of this Agreement for any reason, Boulton will be entitled to all
accrued but unpaid Base Salary and all properly submitted expense
reimbursements. If this Agreement is terminated by LECG without Cause after the
Base Period, Boulton will remain eligible for the bonuses in Year Two, Year
Three and Year Four.

 

6.               Additional Provisions.

 

6.1.  All of Boulton’s obligations of confidentiality stated in the Director
Agreement will apply with equal force to his duties and services as Global Head
of Finance & Accounting Services for LECG under this Agreement and are
incorporated herein by this reference.

 

6.2.  Any notice provided for in this Agreement must be in writing and must be
either personally delivered or sent by reputable overnight courier service
(charges prepaid) to the recipient. Notices to LECG should be sent to 2000
Powell Street, Suite 600, Emeryville, California 94608 (Attn: Chief Financial
Officer); and all notices to Boulton should be sent to him in care of LECG’s
London office.

 

6.3.      Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

 

6.4.      This Agreement and those documents expressly referred to herein embody
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.

 

6.5.      This Agreement may be executed in multiple counterparts, each of which
is deemed to be an original and all of which taken together constitute one and
the same agreement. This Agreement may be executed by delivery of an original
executed counterpart signature page by facsimile transmission.

 

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6.6.  All questions concerning the construction, validity and interpretation of
this Agreement and the exhibits hereto will be governed by and construed in
accordance with the internal laws of the State of California, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of California or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of California.

 

6.7.      The provisions of this Agreement may be amended or and waived only
with the prior written consent of LECG and Boulton.

 

6.8.  LECG, at its discretion, may apply for and procure in its own name for its
own benefit life and/or disability insurance on Boulton in any amount or amounts
considered available. Boulton agrees to cooperate in any medical or other
examination, supply any information, and to execute and deliver any applications
or other instruments in writing as may be reasonably necessary to obtain and
constitute such insurance.

 

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IN WITNESS WHEREOF, the parties have entered into this FAS Group Management
Agreement on the date first above written.

 

 

LECG, LLC

 

By:

/s/ Tina M. Bussone

 

 

Tina M. Bussone

 

Executive Vice President and Head of Human Resources and Operations

 

Dated:

September 12, 2007

 

 

 

/s/ Richard Boulton

 

Richard Boulton

 

Dated:

12 September 2007

 

 

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