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


 

















 


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

  



 

















 


	
  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


 

















 


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.


 

















 


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


 

















 


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


 

















 


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.


 

















 


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.


 


[Remainder of Page Intentionally Left
Blank]


 

















 


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