Exhibit 10.63


 





 


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.


 


5

















 


	
   

  	
  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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