Exhibit 10.78


 


A MARK OF *** IN THE TEXT OF THIS EXHIBIT INDICATES THAT CONFIDENTIAL
MATERIAL HAS BEEN OMITTED.  THIS EXHIBIT,
INCLUDING THE OMITTED PORTIONS, HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING
CONFIDENTIAL TREATMENT UNDER RULE 24B-2 OF THE SECURITIES EXCHANGE
ACT OF 1934.


 


July 30, 2007


 


Steven R. Fife


***


 


Dear Steve:


 


LECG, LLC, a California limited liability company (the “Company”) would
be very pleased to have you join the Company in a senior management role as Executive
Vice President, Chief Financial Officer and Assistant Secretary of LECG and its
holding company parent, LECG Corporation, a Delaware corporation. Should you
accept this offer of employment, the commencement of your employment (“Effective
Date”) will be August 1, 2007; provided, however, that you will serve as Vice
President of Finance until your appointment as Chief Financial Officer is
effective on August 15, 2007. This letter agreement (“Agreement”) sets forth
the terms of your employment relationship with the Company, as well as some of the
Company’s policies associated with your work at the Company.


 


Duties and Scope of Employment


 


For the term of your employment, the Company agrees to employ you on a
full time basis in the position of Chief Financial Officer or in such other
similar position as the Company subsequently may assign to you. You also will
hold positions with LECG Corporation and the Company’s foreign and domestic
subsidiaries, as appropriate from time to time, including the position of
Assistant Secretary of the Company and LECG Corporation. You will report to the
Company’s Chief Executive Officer.


 


Your office location will be in Emeryville, California.


 


During the term of your employment, (i) you will devote your full
business efforts, time and attention to the affairs of the Company, (ii) you
will not engage in any other employment, consulting or other business activity
that would create a conflict of interest with the Company, (iii) you will not
assist any person or entity in competing with the Company or in preparing to
compete with the Company, and (iv) you will comply with the Company’s policies
and procedures, as they may be in effect from time to time.


 


By entering into this Agreement, you represent and warrant to the
Company that you are under no obligations or commitments, contractual or
otherwise, that are inconsistent with your obligations under this letter.


 


You will be responsible for managing all aspects of the financial operations
of the Company, and its various subsidiaries and affiliates, and you will work
with the 


 

















 


Company’s other executive officers to ensure the proper operation and
integrity of the Company’s financial affairs. You will sign the Company’s
financial statements as Chief Financial Officer beginning with the third
quarter of 2007. You will also be actively involved in the general operational
aspects of the Company’s management.


 


Signing Bonus


 


Should you accept our offer of employment, the Company will pay you a
one-time signing bonus of Seventy-five Thousand Dollars ($75,000) to be paid
upon the commencement of your employment. If you voluntarily leave the employ
of the Company prior to February 28, 2008, you will repay the one-time signing
bonus based on the basis of 1/7th of the $75,000 remaining for each
full or partial month until February 28, 2008. You agree that in the event of
your voluntary departure from the Company, the Company is authorized to deduct
any amounts you owe to the Company, including but not limited to, the amount
due for repayment of the unamortized signing bonus discussed above, from any
unpaid amounts including, but not limited to, compensation owed to you at the
time of your departure.


 


Cash and Incentive Compensation


 


The Company will pay you as compensation for your services a base
salary at a gross annual rate of not less than Three Hundred Thousand Dollars
($300,000). Such salary will be payable in accordance with the Company’s standard
payroll procedures. This annual compensation, together with any increases in
such compensation that the Compensation Committee of the Board of Directors of
LECG Corporation (the “Committee”) may grant from time to time, is referred to
in this Agreement as “Base Salary.”


 


The Committee approves all bonus arrangements for executive officers of
the Company. For fiscal year 2007, however, you will be eligible for a guaranteed
annual incentive bonus of Seventy-five Thousand Dollars ($75,000). You will
also be eligible for an additional discretionary bonus for 2007 to be awarded
by the Committee in their sole discretion based on objective and subjective
criteria established by the Committee. The determination of the Committee with
respect to any such discretionary bonus will be final and binding. You will not
be eligible for any such annual bonus (guaranteed or discretionary) if you are
not employed by the Company on both December 31st of the year to
which such bonus pertains and the date when such bonus is payable; provided,
however, that if you are subject to an Involuntary Termination (as defined
below) after any December 31st but prior to a bonus payment date,
then you will be entitled to any bonus that the Committee determines was earned
by you as of such payment date. With respect to fiscal years 2008 and beyond,
your annual incentive bonus will be discretionary and will be awarded by the
Committee in their sole discretion based on objective and subjective criteria
established by the Committee; provided, however, the target incentive bonus
amount will be at least 70% of your Base Salary.


 


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The Company will deduct or withhold from any amounts owed to you any
federal, state, provincial, local or foreign withholding taxes, excise taxes,
or employment taxes (“Taxes”) imposed with respect to your compensation or
other payments from the Company or your ownership interest in the Company,
including, but not limited to, wages, bonuses, dividends, the receipt or
exercise of stock options and/or the receipt or vesting of restricted stock.


 


You will be authorized to incur necessary and reasonable travel,
entertainment and other business expenses in connection with your duties as
Chief Financial Officer. The Company will reimburse you for such expenses upon
presentation of an itemized account and appropriate supporting documentation,
all in accordance with the Company’s policies.


 


The Company will provide you with office space and appropriate
furniture and equipment. The Company will provide its standard computer and
communications equipment which will include either a desktop computer or a
laptop computer and docking station as well as a blackberry or mobile phone. During
the term of this Agreement, the Company, at its expense, shall provide you with
the necessary administrative support staff and resources to perform your duties
under this Agreement.


 


Benefits


 


You will be entitled to participate in the employee benefits afforded
to all of the Company’s employees, subject to applicable eligibility
requirements. In addition, you will be entitled to participate in incentive and
other benefit programs made available to, or created for the benefit of, the
senior executive officers of the Company as a group. Each of these benefits and
programs 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 you elect to participate in these benefits and programs, you will be
subject to the same revisions and changes to such benefits and programs as
other employees.


 


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


 


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, the Company’s employees pay a portion of the costs
of certain insurance benefits for themselves and their families (including, a
life and accidental death and dismemberment insurance policy, and a long-term
disability plan), and the amounts paid by the employees (via payroll deduction)
may vary over time due to changes in these costs and availability of coverage. You
will be subject to the same requirements to pay a portion of these costs as
other 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. 


 


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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.


 


During the term of your employment, you will be eligible for four (4)
weeks of paid vacation per year in accordance with the Company’s vacation
policy, as it may be amended from time to time. There are also eight (8) paid
holidays and two personal days offered per year. The Company does not define a
standard number of sick days; however, we consider ten (10) business days or
fewer to be reasonable.


 


Equity Participation


 


Subject to and upon the approval of the Committee, and following the
commencement of your employment, you will be eligible to participate in the
Restricted Stock Program established by the Committee in 2006 for certain of
the Company’s executive officers, as amended from time to time (the “Program”).
Under the Program, you will be eligible to receive an initial grant of six thousand
(6,000) shares of LECG Corporation’s common stock pursuant to a Stock Purchase
Agreement under the LECG Corporation 2003 Stock Plan, as well as four (4)
additional grants over the four (4) year period from 2008 through 2011, based
on the Committee’s assessment of acceptable individual performance against
established objectives. Accordingly, participation in the Program makes you
eligible to receive an aggregate of thirty thousand (30,000) shares of the
Company’s common stock. Shares under each grant are subject to a right of
repurchase in favor of LECG Corporation that expires as the shares within each
grant vest. Vesting of shares in each grant occurs 1/3 per year over a three
(3) year period commencing on the date of grant. The initial grant will be made
on the first day of the calendar month following the date on which the
Committee approves the grant. Additional annual grants pursuant to the Program
will be made on the first day of the calendar month following performance
reviews for senior management at the Committee meeting in February of each year.


 


Term of Employment


 


Your employment with the Company is “at will,” meaning that it is based
on the mutual consent of you and the Company, and either you or the Company is
entitled to terminate your employment and this Agreement at any time, with or
without “Cause” (as defined below). If you decide to voluntarily terminate your
employment with the Company, you agree that you will provide the Company with
thirty (30) days prior written notice addressed to the Chief Executive Officer
of the Company. Your employment will terminate automatically in the event of
your death.


 


Except as expressly provided below following an Involuntary
Termination, upon termination of your employment, you will only be entitled to
the Base Salary, bonus, benefits and expense reimbursements that you have
earned under this Agreement up to the date of termination. The payments under
this Agreement will fully discharge all responsibilities of the Company to you.


 


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If during the term of this Agreement, LECG Corporation is subject to a “Change
in Control” and (i) you are not offered a position as Chief Financial Officer
with the Company in connection with the Change in Control event or you are
terminated by the Company at any point during the twelve (12) months following
the date on which the Change in Control event occurs, other than for Cause or as
a result of a “Permanent Disability;” or (ii) you elect, within thirty (30)
days of the date on which the Change in Control event occurs, not to continue
as Chief Financial Officer (or any other executive officer position ) with the
acquiring entity following the date on which the Change in Control event occurs
(either (i) or (ii) being an “Involuntary Termination”), then you will be
entitled to a lump-sum cash payment equal to one (1) times your Base Salary (at
the rate then in effect at the time of termination of your employment or, if
greater, the rate in effect immediately prior to the Change in Control) plus
(y) the amount of any guaranteed bonus for the year in which the Change in
Control event occurs. You will also be excused from any obligation to pay back
the signing bonus. Any unvested shares of restricted stock held by you on the
date your employment terminates under this Change in Control provision will
also fully vest on such date. The severance pay provided in the event of a
Change in Control will be reduced by the amount of any severance pay or pay in
lieu of notice that you receive from the Company under a federal or state
statute (including, without limitation, the Worker Adjustment and Retraining
Notification Act). The Company reserves the right, in its sole discretion, to
accelerate or delay the timing of the payment of any severance benefits under
this Agreement to the extent the Company deems it advisable to avoid adverse
tax treatment under Internal Revenue Code Section 409(A)(a). Receipt of this
severance payment and the accelerated vesting of any shares of restricted stock
are subject to your execution of a general release of all claims in a form
prescribed by the Company, your return of all of the Company’s property in your
possession, and your resignation as an officer and a director of the Company or
any of its subsidiaries, as applicable.


 


For purposes of this Agreement, “Change in Control” means a transaction
in which a controlling interest (51% or more) of the stock, or substantially
all of the assets, of LECG Corporation is acquired by a single acquirer, or
group of acquirers working together.


 


For purposes of this Agreement, “Cause” shall be determined by the
Board of Directors of LECG Corporation in its sole discretion and shall mean
(A) your 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 the Company or any affiliate thereof or involving harassment of or
discrimination against any employees of the Company or any affiliate thereof,
(B) your misappropriation of funds or assets of the Company or any affiliate thereof
for personal use; (C) your continued substantial and repeated neglect of your
duties 30 days after receipt of written notice from the Chief Executive Officer
describing such neglect; (D) your gross negligence or willful misconduct in the
performance of your duties after written notice from the Chief Executive
Officer, and such failure has not been cured within 10 days after you receive
notice thereof; (E) you have engaged in conduct constituting a material
violation of the Company’s Code of Business Conduct and Ethics, as determined
by the Company’s Compliance Officer.


 


5

















 


For purposes of this Agreement, “Permanent Disability” means (i) your
incapacity due to physical or mental illness such that even with reasonable
accommodation you are unable to perform the essential functions of your
previously assigned duties where such incapacity has been determined to exist
by the Company’s disability insurance carrier, and (ii) the Board of Directors
of LECG Corporation has determined, based on competent medical advice, that
such incapacity will continue for a period of at least six continuous months.


 


Confidentiality – Non-Solicitation of Employees


 


You agree to hold confidential and for the sole benefit of the Company
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 concerning or in any way relating to the Company or
its business (“Confidential Information”). Such Confidential Information is
strictly confidential and must not be disclosed to anyone outside the Company
including family members or any employee of the Company who is not entitled to
the Confidential Information, except as required by law or if compelled by
legal process or proceeding. If such disclosure is required by law or compelled
by legal proceeding, you agree to notify the Company’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 the Company. Any doubts about whether any
information is confidential should be resolved in favor of confidentiality. You
may not disclose, use, copy, publish, summarize or remove from the premises of
the Company any Confidential Information except (i) during your employment with
the Company 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 the prior written consent of the Company.


 


You further agree that during your employment with the Company and for one
(1) year after the termination of your employment for any reason (the “Non-Solicitation
Period”), 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, affiliated with, or acting as an independent contractor to
the Company, its subsidiaries or affiliated entities, to terminate his or her
relationship with the Company, its subsidiaries or affiliated entities.


 


Additional Provisions


 


Notices


 


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 at the following address:


 


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A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.


 


If to the Company:


LECG, LLC 

2000 Powell Street, Suite 600

Emeryville, CA 94608

Attention:  Chief Executive Officer


 


If to you:


Steven R. Fife


***


 


or such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the sending
party. Any notice under this Agreement will be deemed to have been given when
so delivered personally or one day after deposit with a reputable overnight
courier service.


 


Severability


 


Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law. 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.


 


Entire Agreement


 


This Agreement, those documents expressly referred to herein and other
documents of even date herewith 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.


 


Counterparts; Facsimile Signatures


 


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.


 


Successors and Assigns


 


Except as otherwise provided herein, this Agreement shall bind and
inure to the benefit of and be enforceable by the Executive and the Company,
and their respective successors and assigns; provided that the rights and
obligations of the Executive under this Agreement shall not be assignable and,
provided further that the rights and obligations of the Company may be assigned
to any successor of the Company.


 


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Governing Law; Dispute Resolution


 


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.
Except with respect to any action seeking temporary or permanent injunctive
relief taken in connection with the enforcement of the Confidentiality
provisions of this Agreement, any controversy, dispute, or claim of whatever
nature arising out of, in connection with, or in relation to the
interpretation, performance or breach of this Agreement, including any claim
based on contract, tort, or statute, shall be resolved at the request of any
party to this agreement, by final and binding arbitration, administered by and
in accordance with the then existing Rules of Practice and Procedure of
Judicial Arbitration & Mediation Services, Inc. applicable to commercial
disputes (JAMS), or its successor entity, and judgment upon any reward rendered
by the arbitrator may be entered by any State or Federal Court having
jurisdiction thereof. Any such arbitration shall take place exclusively in
California. The prevailing party shall be entitled to reasonable attorneys’
fees and costs incurred in enforcing this Agreement through arbitration or
otherwise and reasonable attorneys’ fees and costs incurred in appealing or
enforcing any judgment entered by the arbitrator in any court having
jurisdiction. The parties shall not be liable to each other for any
consequential, incidental, special or punitive damages.


 


Amendment and Waiver


 


The provisions of this Agreement may be amended or and waived only with
the prior written consent of the Company and you. A waiver by any party hereto
of any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which such party would otherwise have on any
future occasion. Neither failure to exercise nor any delay in exercising on the
part of any party hereto, any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided are
cumulative and may be exercised singly or concurrently, and are not exclusive
of any rights or remedies provided by law.


 


Key Man Insurance


 


The Company, at its discretion, may apply for and procure in its own
name for its own benefit life and/or disability insurance on you in any amount
or amounts considered available. You agree 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.


 


8

















 


Steve, all of us at the Company look forward to having you as part of
our senior management team. Please sign below to indicate your acceptance of
the terms contained in this letter.


 


	
  Sincerely,

  
	
   

  
	
  /s/ Michael J. Jeffery

  	
   

  
	
   

  
	
  Michael J. Jeffery

  
	
  Chief Executive Officer

  
	
   

  
	
  Agreed to and accepted this 30th day of July, 2007.

  
	
   

  
	
  /s/ Steven R. Fife

  	
   

  
	
   

  
	
  Steven R. Fife

  
			



 


9

















A mark of
*** on this page indicates that confidential material has been omitted.  This Exhibit, including the omitted portions,
has been filed separately with the Secretary of the Securities and Exchange
Commission pursuant to an application requesting confidential treatment under
Rule 24b-2 of the Securities Exchange Act of 1934.


 


August 29, 2007


 


Steven R. Fife


***


 


Dear Steve:


 


Reference is made to the letter agreement between you and LECG, LLC, a
California limited liability company (the “Company”) dated July 30, 2007 (the “Agreement”).
In order to avoid potentially adverse federal income tax consequences, the
Company and you have agreed to restate the paragraph beginning at the top of
page 5 of the Agreement as follows:


 


If during the term of this Agreement, LECG Corporation is subject to a “Change
in Control” and (i) you are not offered a position as Chief Financial Officer
with the Company in connection with the Change in Control event or you are
terminated by the Company at any point during the twelve (12) months following
the date on which the Change in Control event occurs, other than for Cause or
as a result of a “Permanent Disability;” or (ii) you elect, within thirty (30)
days of the date on which the Change in Control event occurs, not to continue
as Chief Financial Officer (or any other executive officer position) with the
acquiring entity following the date on which the Change in Control event occurs
(either (i) or (ii) being an “Involuntary Termination”), then you will be
entitled to a lump-sum cash payment within thirty days after such Involuntary
Termination equal to one (1) times your Base Salary (at the rate then in effect
at the time of termination of your employment or, if greater, the rate in
effect immediately prior to the Change in Control) plus (y) the amount of any
guaranteed bonus for the year in which the Change in Control event occurs. If
you are determined by the Company to be a specified employee, as defined in and
determined under Internal Revenue Code section 409A, then all or part of the
payment will be delayed until the date that is six months after your
Involuntary Termination if necessary to avoid adverse tax consequences under
that Code section. You will also be excused from any obligation to pay back the
signing  bonus. Any unvested shares of
restricted stock held by you on the date your employment terminates under this
Change in Control provision will also fully vest on such date. The severance
pay provided in the event of a Change in Control will be reduced by the amount
of any severance pay or pay in lieu of notice that you receive from the Company
under a federal or state statute (including, without limitation, the Worker
Adjustment and Retraining Notification Act). Receipt of this severance payment
and the accelerated vesting of any shares of restricted stock are subject to
your execution of a general release of all claims in a form prescribed by the
Company, your return of all of the Company’s property in your possession, and
your 


 


 

















 


resignation as an officer and a director of the Company or any of its
subsidiaries, as applicable.


 


In all other respects, the Agreement is hereby ratified and confirmed.


 


	
  Sincerely,

  
	
   

  
	
  /s/ Michael J. Jeffery

  	
   

  
	
   

  
	
  Michael J. Jeffery

  
	
  Chief Executive Officer

  
	
   

  
	
  Accepted to and agreed this 29th day of August, 2007.

  
	
   

  
	
  /s/ Steven R. Fife

  	
   

  
	
   

  
	
  Steven R. Fife