0001104659-07-086807.txt : 20071204 0001104659-07-086807.hdr.sgml : 20071204 20071204143051 ACCESSION NUMBER: 0001104659-07-086807 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20071204 DATE AS OF CHANGE: 20071204 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LECG CORP CENTRAL INDEX KEY: 0001192305 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT CONSULTING SERVICES [8742] IRS NUMBER: 810569994 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-79357 FILM NUMBER: 071283267 BUSINESS ADDRESS: STREET 1: 2000 POWELL ST STREET 2: STE 600 CITY: EMERYVILLE STATE: CA ZIP: 94608 BUSINESS PHONE: 5106539800 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TEECE DAVID J CENTRAL INDEX KEY: 0001055812 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 2000 POWELL ST CITY: EMERYVILLY STATE: CA ZIP: 94608 BUSINESS PHONE: 5106539800 MAIL ADDRESS: STREET 1: 2000 POWELL ST CITY: EMERYVILLE STATE: CA ZIP: 94608 SC 13D/A 1 a07-30618_1sc13da.htm SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934
(Amendment No. 1)*

LECG Corporation

(Name of Issuer)

Common Stock

(Title of Class of Securities)

523234 10 2

(CUSIP Number)

Carol Kerr

LECG Corporation

Executive Vice President, General Counsel & Secretary

2049 Century Park East, Suite 2300

Los Angeles, CA 90067

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

November 30, 2007

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 523234 10 2

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) David J. Teece

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization United States and New Zealand (dual citizenship)

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 1,280,333

			8.	Shared Voting Power 521,876

			9.	Sole Dispositive Power 1,280,333

			10.	Shared Dispositive Power 521,876

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 1,802,209

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 7.0%

	14.	Type of Reporting Person (See Instructions) IN

Item 1.	Security and Issuer
This Schedule 13D/A amends and restates a Schedule 13D filed on December 12, 2003 with the Securities and Exchange Commission and relates to shares of common stock (the “Shares”) of LECG Corporation, a Delaware corporation (the “Issuer”). The principal executive office and mailing address of the Issuer is: 2000 Powell Street, Emeryville, California 94608.

Item 2.	Identity and Background
(a) This Schedule 13D/A is being filed on behalf of David J. Teece, PhD. (“Dr. Teece”), a natural person. (b) Dr. Teece’s principal business address is 2000 Powell Street, Emeryville, California 94608. (c) The present principal occupation of Dr. Teece is that of non-executive Vice Chairman of the Board of Directors of the Issuer. Dr. Teece is also employed by LECG, LLC, a subsidiary of the Issuer, to provide expert consulting services to clients of LECG, LLC. The Issuer’s principal business address is listed in Item 1 above. (d) During the last five (5) years, Dr. Teece has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five (5) years, Dr. Teece has not been a party to a civil proceeding or a judicial or administrative body of competent jurisdiction which resulted in any judgment, decree or final order to which Dr. Teece is subject enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Dr. Teece holds dual citizenship in both the United States and New Zealand.

Item 3.	Source and Amount of Funds or Other Consideration
The 1,802,209 Shares beneficially owned by Dr. Teece include: 771,734 Shares owned directly by Dr. Teece; 508,599 Shares which Dr. Teece has a right to acquire pursuant to presently vested and exercisable options, as well as options which will become vested and exerciseable within 60 days of November 30, 2007, under the Issuer’s 2000 Incentive Plan; and 123,047 Shares held by the Flex Trust u/t/d February 5, 2003 (the “Flex Trust”), of which Dr. Teece is a named beneficiary. (1) (1) Dr. Teece is a named beneficiary of the Flex Trust. However, Dr. Teece is not the trustee of the Flex Trust and does not have direct voting or dispositive power over the 123,047 Shares owned by the Flex Trust. However, Dr. Teece does have the ability to remove the trustee of the Flex Trust and to appoint successor trustee(s). Accordingly, Dr. Teece may be deemed to share voting or dispositive control over the Shares held by the Flex Trust.

325,000 Shares held by the Teece Irrevocable Trust No. 3 U/A/D 10/14/97 (the “Teece Irrevocable Trust”). (2) 73,829 Shares held by the Teece Family Millennium Trust (the “Teece Family Millennium Trust”). (3) 763,750 of the Shares owned directly by Dr. Teece, and the 521,876 Shares held by the Flex Trust, the Teece Irrevocable Trust and the Teece Family Millennium Trust were received in exchange for common units of LECG Holding Company, LLC (the “Exchange”). The Exchange became effective after the effectiveness of the registration statement relating to the Issuer’s initial public offering. The Exchange was part of a larger reorganization (the “Reorganization”) undertaken in connection with the Issuer’s initial public offering pursuant to which holders of common units of LECG Holding Company, LLC other than TCEP/LECG Funding Corporation, including Dr. Teece, the Flex Trust, the Teece Irrevocable Trust and the Teece Family Millennium Trust, each received one Share for every 1.6 common units of LECG Holding Company, LLC. As part of the Reorganization, certain holders of common units other than TCEP/LECG Funding Corporation, including Dr. Teece, the Flex Trust, the Teece Irrevocable Trust and the Teece Family Millennium Trust, also received the right to certain cash payments, including in redemption for preferred units of LECG Holding Company, LLC. 7,500 outstanding Shares owned directly by Dr. Teece were acquired by Dr. Teece in the Issuer’s initial public offering. The presently vested and exercisable options entitling Dr. Teece to acquire 468,750 Shares were granted to Dr. Teece pursuant to LECG Holding Company, LLC’s 2000 Incentive Stock Plan, as amended (the “Plan”) and an option grant issued thereunder. (4) Those options granted to Dr. Teece were scheduled to vest in their entirety on October 30, 2008, but were subject to full acceleration prior to that date if, after the completion of the Issuer’s initial public offering, the average closing market price of its common stock over a 20-day period following the offer equaled or exceeded an amount specified in the option grant (the “Performance Criteria”). The Performance Criteria were satisfied on December 12, 2003, thereby causing the full acceleration and vesting of all of the options granted to Dr. Teece pursuant to the Plan and the option grant issued him thereunder. (2) Dr. Teece is not the trustee of Teece Irrevocable Trust and does not have direct voting or dispositive power over the 325,000 Shares held by the Teece Irrevocable Trust. However, Dr. Teece does have the ability to acquire the Shares held in the Teece Irrevocable Trust and therefore Dr. Teece may be deemed to share voting or dispositive control over the Shares held by the Teece Irrevocable Trust. (3) Dr. Teece is not the trustee of Teece Family Millennium Trust and does not have direct voting or dispositive power over the 73,829 Shares held by the Teece Family Millennium Trust. However, Dr. Teece does have the ability to acquire the Shares held in the Teece Family Millennium Trust and therefore Dr. Teece may be deemed to share voting or dispositive control over the Shares held by the Teece Irrevocable Trust (4) In connection with the Reorganization, the Issuer assumed all obligations of LECG Holding Company, LLC pursuant to the Plan and option grants issued thereunder. The remaining vested and exercisable options entitling Dr. Teece to acquire 39,849 Shares were granted to Dr. Teece pursuant to the Plan and an option grant issued thereunder.

Item 4.	Purpose of Transaction
The Shares owned by Dr. Teece are owned for investment purposes. Dr. Teece may, from time to time, depending upon market conditions and other factors deemed relevant by Dr. Teece, acquire additional Shares. Dr. Teece reserves the right to, and may in the future choose to, change his purpose with respect to the investment and, take such actions as he may deem appropriate in light of the circumstances including, without limitation, to dispose of, in the open market, in a

private transaction, by distribution or by gift, all or a portion of the Shares which Dr. Teece now owns or may hereafter acquire. Dr. Teece entered into a 10b5(1) Trading Plan (the “Trading Plan”) with UBS Financial Services Inc. for the sale of shares of restricted stock and stock options on November 30, 2007. The Trading Plan terminates on October 31, 2008 or upon the earlier sale of an aggregate amount of shares pursuant to the Trading Plan equal to 1,240,474 shares or in certain other events as set forth in the Trading Plan, a copy of which is attached hereto as an exhibit and incorporated herein by reference. Under the Trading Plan, an aggregate of 771,724 shares of restricted stock are to be sold in predetermined amounts on set dates between December 14, 2007 and February 29, 2008, some shares of which are to be sold at market prices and others at limit prices, with unsold shares carrying over to successive trading dates, and provided that unsold shares as of the end of the period are to be sold at market prices. Further, under the Trading Plan, shares subject to stock options are to be sold on dates between June 2, 2008 and October 31, 2008. Dr. Teece does not have any plans or proposals which relate to or result in: (a) an extraordinary transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (b) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (c) any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (d) any material change in the present capitalization or dividend policy of the Issuer; (e) any other material changes in the Issuer’s business or corporate structure; (f) changes in the Issuer’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (g) causing a class of securities of the Issuer to be delisted from a national securities exchange or cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (h) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (i) any action similar to any of those enumerated above.

Item 5.	Interest in Securities of the Issuer
(a) As of the date of this report, Dr. Teece beneficially owns an aggregate of 1,802,209 Shares, which represent 7.0% of the Issuer’s 25,449,678 outstanding Shares, such outstanding Share number is based on the number of Shares outstanding as of November 30, 2007. Of the 1,802,209 Shares which Dr. Teece beneficially owns, 508,599 Shares represent Shares which Dr. Teece does not currently own, but which Dr. Teece has a right to acquire pursuant to presently vested and exercisable options, as well as options which will become vested and exerciseable within 60 days of November 30, 2007, 123,047 Shares represent Shares which are held by the Flex Trust, but over which Dr. Teece has no voting or dispositive

control, 325,000 Shares represent Shares which are held by the Teece Irrevocable Trust but over which Dr. Teece has no voting or dispositive control and 73,829 Shares represent Shares which are held by the Teece Family Millennium Trust but over which Dr. Teece has no voting or dispositive control.

(b) Dr. Teece has the sole power to vote, direct the vote, dispose, and direct the disposition of 1,280,333 of the Shares of which Dr. Teece is the beneficial owner. Dr. Teece may be deemed to share the power to vote, direct the vote, dispose, or direct the disposition of 123,047 Shares held by the Flex Trust,(5) 325,000 Shares held by the Teece Irrevocable Trust, (6) and 73,829 Shares held by the Teece Family Millennium Trust.(7)

(5) Although Dr. Teece is not the trustee of the Flex Trust and does not have direct power to vote, direct the vote, dispose or direct the disposition of the Shares held by the Flex Trust, Dr. Teece has the ability to remove the trustee of the Flex Trust and to appoint successor trustee(s). Accordingly, Dr. Teece may be deemed to share voting or dispositive control over the Shares held by the Flex Trust.

(6) Dr. Teece is not the trustee of Teece Irrevocable Trust and does not have direct voting or dispositive power over the 325,000 Shares held by the Teece Irrevocable Trust. However, Dr. Teece does have the ability to acquire the Shares held in the Teece Irrevocable Trust and therefore Dr. Teece may be deemed to share voting or dispositive control over the Shares held by the Teece Irrevocable Trust.

(7) Dr. Teece is not the trustee of Teece Family Millennium Trust and does not have direct voting or dispositive power over the 73,829 Shares held by the Teece Family Millennium Trust. However, Dr. Teece does have the ability to acquire the Shares held in the Teece Family Millennium Trust and therefore Dr. Teece may be deemed to share voting or dispositive control over the Shares held by the Teece Irrevocable Trust.

(c) Dr. Teece has not effected any transactions, other than those described herein, in the class of securities described herein during the past sixty (60) days.

(d) With the exception of the 123,047 Shares held by the Flex Trust, the 325,000 Shares held by the Teece Irrevocable Trust and the 73,829 Shares held by the Teece Family Millennium Trust, no other person is known by Dr. Teece to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any Shares beneficially owned by Dr. Teece. Norman J. Laboe, as the sole trustee of the Flex Trust and the Teece Irrevocable Trust, and Norman J. Laboe and U.S. Trust Company of Delaware as the co-trustees of the Teece Family Millennium Trust, have the right to receive and the power to direct the receipt of dividends therefrom, or the proceeds from the sale thereof.

(e) Not applicable. As of the date of this Schedule 13D/A, Dr. Teece is the beneficial owner of more than 5% of the class of securities described herein.

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Certain of the Issuer’s stockholders, including Dr. Teece, hold rights to cause the Issuer to register the sale of their currently unregistered Shares under the Securities Act of 1933, as amended (the “Securities Act”). These Shares are referred to as registrable securities. Specifically, commencing 180 days after November 13, 2003, a holder or holders of at least a majority of the registrable securities may require the Issuer to prepare and file a registration statement under the Securities Act at the Issuer’s expense covering all or a portion of the registrable securities if the Shares to be included in that registration will generate anticipated aggregate net proceeds of at least $5.0 million. Registration rights terminate no later than 5 years after the Issuer’s initial public offering. Registration of these Shares under the Securities Act would result in these Shares becoming freely tradable without restriction under the Securities Act. This description of the Registration Rights Agreement is qualified in its entirety by reference to the Registration Rights Agreement entered into between LECG Holding Company, LLC, TCEP/LECG Funding Corporation, Dr. Teece, David Kaplan, Frog & Peach Investors, LLC and other persons, a copy of which has been incorporated herein by reference to Exhibit 2. The response to Item 3 is incorporated herein by reference. The Reorganization and the Exchange were made pursuant to an Omnibus Plan of Reorganization between LECG Holding Company, LLC, TCEP/LECG Funding Corporation, Thoma Cressey Fund VII (“Fund VII”), L.P., Thoma Cressey Friends Fund VII, L.P. (“Friends Fund”), the Issuer, Teece and David Kaplan, dated November 7, 2003 (the “Plan of Reorganization”), a copy of which has been incorporated herein by reference to Exhibit 3. The 508,599 Shares which Dr. Teece has a right to acquire pursuant to presently vested and exercisable options, as well as options which will become vested and exerciseable within 60 days of November 30, 2007, were granted to Dr. Teece pursuant to the Plan and option grants issued thereunder. A copy of the Plan and the option grants are incorporated herein by reference to Exhibit 4 and Exhibit 5, respectively.

Item 7.	Material to Be Filed as Exhibits
The Exhibit Index filed herewith is incorporated herein by this reference.

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	December 1, 2007
	Date
	/s/ David J. Teece
	Signature
	David J. Teece
	Name/Title

Exhibit Index

Exhibit 1. 10b5(1) Trading Plan dated November 30, 2007.

Exhibit 2. Registration Rights Agreement between LECG Holding Company, LLC, TCEP/LECG Funding Corporation, David J. Teece, David Kaplan, Frog & Peach Investors, LLC and other persons dated September 29, 2000, incorporated by reference to Exhibit 10.18 to the Issuer’s Registration Statement on Form S-1, filed with the SEC on August 25, 2003 (Commission File Number 333-108189).

Exhibit 3. Form of Plan of Reorganization, incorporated by reference to Exhibit 10.46 to the Issuer’s Registration Statement on Form S-1, filed with the SEC on November 7, 2003 (Commission File Number 333-108189).

Exhibit 4. 2000 Incentive Plan, incorporated by reference to Exhibit 10.2 to the Issuer’s Registration Statement on Form S-1, filed with the SEC on November 7, 2003 (Commission File Number 333-108189).

Exhibit 5. Option grants to David J. Teece issued pursuant to the Plan (filed herewith).

EX-1 2 a07-30618_1ex1.htm EXHIBIT 1

Exhibit 1

Rule 10b5-1 Trading Plan

David J Teece (“Seller”) adopts this Trading Plan dated November 30, 2007 (the “Trading Plan”) with respect to the “Stock”(defined below) with UBS Financial Services Inc. for the purpose of establishing a trading plan that complies with Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Seller and UBS Financial Services Inc. agree as follows:

1. Specific Plan of Sale. UBS Financial Services Inc., acting as agent, agrees to effect sales of Stock on behalf of Seller in accordance with the specific instructions set forth in Exhibit A (the “Sales Instructions”). The term “Stock” means the common stock, par value $0.001 per share, of LECG Corporation (“Issuer”) (symbol: XPRT), and includes any class or series of common stock of Issuer into which the Stock is converted whether pursuant to a reclassification, reorganization, reincorporation or similar event.

2. Fees/Commissions. Seller shall pay UBS Financial Services Inc. $0.06 per share of Stock sold; with such amounts to be deducted by UBS Financial Services Inc. from the proceeds of sales under this Trading Plan.

3. Seller’s Representations and Warranties. Seller represents and warrants that:

(a) Seller is not aware of any material nonpublic information concerning Issuer or any securities of Issuer;

(b) Seller is entering into this Trading Plan in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1;

(c) Seller has informed Issuer of this Trading Plan and has furnished Issuer with a copy, and Seller has determined that this Trading Plan is consistent with Issuer’s insider trading policy;

(d) Seller has disclosed to UBS Financial Services Inc. any agreements that Seller is currently party to, or within the past 60 days, has been party to, with another broker, dealer or financial institution (each, a “Financial Institution”) entered into for the purpose of establishing a trading plan that complies with Rule 10b5-1;

(e) with the exception of restrictions imposed by that certain Registration Rights Agreement dated as of September 29, 2000, as amended (the “Registration Agreement”), Seller is not subject to any legal, regulatory or contractual restriction or undertaking that would prevent UBS Financial Services Inc. from conducting sales in accordance with this Trading Plan;

(f) the Stock to be sold under this Trading Plan is owned free and clear by Seller and is not subject to any liens, security interests or other encumbrances or limitations on dispositions, other than those imposed by Rule 144 or Rule 145, if applicable;

(g) Seller has had an opportunity to consult with Seller’s own advisors as to the legal, tax, financial and other aspects of this Trading Plan, including this Trading Plan’s compliance with Rule 10b5-1 and applicable state law. Seller has not received or relied on any representations from UBS Financial Services Inc. concerning this Trading Plan’s compliance with Rule 10b5-1.

4. Agreements by Seller. Seller acknowledges and agrees to the following provisions:

(a) Brokerage Account. Seller shall open a sole-purpose UBS Financial Services Inc. brokerage account prior to the execution of sales under this Trading Plan in the name of and for the benefit of Seller (the “Plan Account”).

(b) Delivery of Stock. Seller shall deliver all shares of Stock to be sold pursuant to this Trading Plan into the Plan Account prior to the commencement of any sales under this Trading Plan.

(c) Hedging Transactions. While this Trading Plan is in effect, Seller shall comply with the prohibition set forth in Rule 10b5-1(c)(1)(i)(C) against entering into or altering a corresponding or hedging transaction or position with respect to the Stock.

(d) Notice to UBS Financial Services Inc.. Seller shall notify UBS Financial Services Inc. to terminate or suspend sales, as appropriate, as soon as practicable upon the occurrence of any of the events contemplated in paragraph 7(a) or (b) or paragraph 8(c).

(e) Communications. Seller shall not, directly or indirectly, communicate any material nonpublic information relating to the Stock or Issuer to any employee of the UBS Financial Services Inc. 10b5-1 Group or any UBS Financial Services Inc. Financial Advisor.

(f) Compliance with Applicable Laws and Required Exchange Act Filings. Seller shall comply with all applicable laws, rules and regulations, and Seller shall make all filings required under Sections 13 and 16 of the Exchange Act in a timely manner.

(g) No Influence. Seller does not have, and shall not attempt to exercise, any influence over how, when or whether to effect sales of Stock pursuant to this Trading Plan.

(h) Stock Non-Marginable. The Stock is not marginable and may not be used by Seller as collateral for any purpose.

(i) Execution, Average Pricing and Pro Rata Allocation of Sales. UBS Financial Services Inc. may sell Stock on any national securities exchange, in the over-the-counter market, on an automated trading

system or otherwise. UBS Financial Services Inc. or one of its affiliates may make a market in the Stock and may act as principal in executing sales under the Trading Plan. To the extent that UBS Financial Services Inc. administers other trading plans relating to Issuer’s securities, UBS Financial Services Inc. may aggregate orders for Seller with orders under other sellers’ trading plans for execution in a block and allocate each execution on a pro rata basis to each seller. In the event of partial execution of block orders, UBS Financial Services Inc. shall allocate the proceeds of all Stock actually sold on a particular day pursuant to all Rule 10b5-1 trading plans concerning Issuer’s securities that UBS Financial Services Inc. manages pro rata based on the ratio of (x) the number of shares to be sold pursuant to the order instructions of each Trading Plan to (y) the total number of shares to be sold under all Trading Plans having the same type of order instructions.

(j) Exclusivity. Until this Trading Plan has been terminated, Seller shall not enter into any agreement with, give any instructions to, or adopt a plan for trading with another Financial Institution with respect to purchase or sale of the Stock for the purpose of establishing a trading plan that complies with Rule 10b5-1.

(k) Acknowledgment of Relief from Obligation to Effect Sales. UBS Financial Services Inc. shall be relieved of its obligation to sell Stock as otherwise required by paragraph 1 above at any time when:

(i) UBS Financial Services Inc. has determined that (A) it is prohibited from doing so by a legal, contractual or regulatory restriction applicable to it or its affiliates or to Seller or Seller’s affiliates; or (B) a material adverse change in the financial markets, in the market activity in the Stock or in the internal systems of UBS Financial Services Inc. or one of its affiliates, an outbreak or escalation of hostilities or other crisis or calamity has occurred (in each case, the effect of which is such as to make it, in the sole judgment of UBS Financial Services Inc., impracticable for UBS Financial Services Inc. to sell Stock); or (C) a trading suspension with respect to the Stock by the Securities and Exchange Commission or the Principal U.S. Market (defined in Exhibit A) or a delisting of the Stock or a banking moratorium has occurred; if UBS Financial Services Inc. cannot effect a sale for any of such reasons, UBS Financial Services Inc. shall effect such sale as promptly as practical after the cessation or termination of such cause, subject to the restrictions set forth in paragraph 1 of Exhibit A;

(ii) This Trading Plan is suspended in accordance with paragraph 7 below;

(iii) This Trading Plan is terminated in accordance with paragraph 8 below;

5. Rule 144 and Rule 145. With respect to sales of Stock subject to Rule 144 or Rule 145, Seller and UBS Financial Services Inc. agree to comply with the following provisions:

(a) Agreements by Seller Regarding Rule 144 and Rule 145.

(i) Seller agrees not to take, and agrees to cause any person or entity with which Seller would be required to aggregate sales of Stock pursuant to Rule 144(a)(2) or (e) not to take, any action that would cause the sales hereunder not to meet all applicable requirements of Rule 144 or Rule 145.

(ii) Seller agrees to complete, execute and deliver to UBS Financial Services Inc. Forms 144 for sales to be effected under the Trading Plan at such times and in such numbers as UBS Financial Services Inc. shall request. Seller hereby grants UBS Financial Services Inc. a power of attorney

to complete and file on behalf of Seller any required Forms 144. The remarks section of each Form 144 filed shall include a statement to the effect that the shares covered by the Form 144 are being sold pursuant to a Rule 10b5-1 trading plan dated as of the date hereof, and the representation regarding the seller’s knowledge of material nonpublic information speaks as of that plan adoption date.

(iii) Seller agrees to complete, execute and deliver to UBS Financial Services Inc. Rule 144 Seller’s Representation Letters (in the form attached as Exhibit C) for sales to be effected under the Trading Plan at such times and in such numbers as UBS Financial Services Inc. shall request.

(b) Agreements by UBS Financial Services Inc. Regarding Rule 144 and Rule 145.

(i) UBS Financial Services Inc. agrees to conduct all sales pursuant to the Trading Plan in accordance with the manner of sale requirement of Rule 144. UBS Financial Services Inc. shall not effect any sales that it knows would exceed the then-applicable volume limitation under Rule 144.

(ii) UBS Financial Services Inc. agrees to file such Forms 144 furnished by Seller pursuant to paragraph 5(a)(ii) on behalf of Seller as required by applicable law. UBS Financial Services Inc. shall make one Form 144 filing at the beginning of each three-month period, commencing upon the first Sale Day under the Trading Plan.

(iii) UBS Financial Services Inc. agrees to submit such Rule 144 Seller’s

Representation Letters furnished by Seller pursuant to paragraph 5(a)(iii) on behalf of Seller as required by Issuer’s transfer agent.

(iv) Seller shall make and shall be solely responsible for all filings required under Sections 13(d) and 16 of the Exchange Act in connection with sales of Stock pursuant to the Trading Plan, and Seller acknowledges that UBS Financial Services Inc. shall not make any such filings and shall have no liability to Seller in connection with or related to any such filings.

6. Options. Seller and UBS Financial Services Inc. agree to the provisions regarding the exercise of Options contained in Exhibit D.

7. Suspension. Sales under this Trading Plan shall be suspended as follows:

(a) Promptly after the date on which UBS Financial Services Inc. receives notice from Seller or Issuer of legal, contractual or regulatory restrictions applicable to Seller or Seller’s affiliates that would prevent UBS Financial Services Inc. from selling Stock under this Trading Plan (such notice merely stating that there is a restriction applicable to Seller without specifying the reasons for the restriction), including a restriction based on Seller’s awareness of material nonpublic information in connection with a tender offer for Issuer’s securities (transactions on the basis of which Rule 14e-3 of the Exchange Act could be violated).

(b) In the event of a Qualifying Securities Offering, promptly after the date on which UBS Financial Services Inc. receives notice from Issuer or Seller of the Suspension Date until UBS Financial Services Inc. receives notice from Issuer or Seller of the Resumption Date; provided, however, that (i) Seller certifies that Seller has no control over the Suspension Date or the Resumption Date, and (ii) if Seller is unable to

make such certification then this paragraph shall result in a termination of the Trading Plan, rather than suspension.

“Qualifying Securities Offering” means any offering of securities of Issuer for cash in which the lead underwriter, lead manager, initial purchaser, placement agent or other entity performing a similar function (each, an “Underwriter”) requires Seller to agree to restrict Seller’s ability to effect Sales pursuant to this Trading Plan or a restriction is otherwise imposed by the Registration Agreement.

“Suspension Date” means the earlier to occur of (i) the date on which a preliminary prospectus, offering memorandum, offering circular or other disclosure document (each, a “Preliminary Offering Document”) is first used to market securities of Issuer by the Underwriter, or (ii) if a Preliminary Offering Document is not used, the date on which the underwriting agreement, purchase agreement, placement agent agreement or similar agreement (each, an “Underwriting Agreement”) is entered into by the Underwriter and Issuer, or (iii) the commencement of any lock up period under the Registration Agreement.

“Resumption Date” means the day immediately following the expiration of the time period during which Seller was restricted from effecting Sales pursuant to this Trading Plan in accordance with the Underwriting Agreement or, if later, the date any lock up period under the Registration Agreement lapses.

(c) In the event that the UBS Financial Services Inc. 10b5-1 Group becomes aware of material nonpublic information concerning Issuer or the Stock, UBS Financial Services Inc. may be required by applicable law or, in its sole discretion, find it advisable, to suspend sales under this Trading Plan. In such case, UBS Financial Services Inc. shall promptly notify Seller of the suspension of sales under this Trading Plan.

8. Termination. This Trading Plan will terminate on the earliest to occur of the following (the “Plan Sales Period”):

(a) at the close of trading on October 31, 2008;

(b) promptly after the date on which UBS Financial Services Inc. receives notice from Seller of the termination of this Trading Plan, in which case, Seller agrees to notify the Issuer promptly of such termination;

(c) upon the reasonable determination by UBS Financial Services Inc., or promptly after the reasonable determination by Seller and notice to UBS Financial Services Inc., that this Trading Plan does not comply with Rule 10b5-1;

(d) promptly after the date UBS Financial Services Inc. is notified of the death of Seller;

(e) immediately in the event that Seller fails to deliver any Stock pursuant to paragraph 4(b); or

(f) the date that the aggregate number of shares of Stock sold pursuant to this Trading Plan reaches 1,240,474 shares.

9. Indemnification; Limitation of Liability.

(a) Indemnification.

(i) Seller agrees to indemnify and hold harmless UBS Financial Services Inc. and its directors, officers, employees and affiliates from and against all claims, losses, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) (collectively, “Losses”) arising out of or attributable to (A) UBS Financial Services Inc.’s actions taken or not taken in compliance with this Trading Plan, (B) any breach by Seller of this Trading Plan (including Seller’s representations and warranties hereunder), or (C) any violation by Seller of applicable laws or regulations. This indemnification shall survive termination of this Trading Plan.

(ii) UBS Financial Services Inc. agrees to indemnify and hold harmless Seller from and against all Losses arising out of or attributable to the gross negligence or willful misconduct of UBS Financial Services Inc. in connection with this Trading Plan.

(b) Limitation of Liability.

(i) Notwithstanding any other provision hereof, UBS Financial Services Inc. shall not be liable to Seller, and Seller shall not be liable to UBS Financial Services Inc., for: (A) special, indirect, punitive, exemplary or consequential damages, or incidental losses or damages of any kind, even if advised of the possibility of such losses or damages or if such losses or damages could have been reasonably foreseen; or (B) any failure to perform or to cease performance or any delay in performance that results from a cause or circumstance that is beyond its reasonable control, including, but not limited to, failure of electronic or mechanical equipment, strikes, failure of common carrier or utility systems, severe weather, market disruptions or other causes commonly known as “acts of God”.

(ii) Notwithstanding any other provision hereof, UBS Financial Services Inc. shall not be liable to Seller for (A) the exercise of discretionary authority or discretionary control under this Trading Plan, if any, or (B) any failure to effect a sale required by paragraph 1, except for failures to effect sales as a result of the gross negligence or willful misconduct of UBS Financial Services Inc.

10. Agreement to Arbitrate. Any dispute between Seller and UBS Financial Services Inc. arising out of, relating to or in connection with this Trading Plan or any transaction relating to this Trading Plan shall be determined only by arbitration as provided in the UBS Financial Services Inc. brokerage account agreement referred to in paragraph 4(a).

11. Notices.

(a) All notices to UBS Financial Services Inc. under this Trading Plan shall be provided in writing to the 10b5-1 Group of UBS Financial Services Inc. by facsimile at fax number 201-352-4680.

(b) All notices to Seller under this Trading Plan shall be given to David J Teece by telephone at telephone number 510-653-9800, or by certified mail to the address below:

227 Tunnel Road

Berkeley, CA 94705

(c) Seller hereby instructs and authorizes UBS Financial Services Inc. to send duplicate copies of all confirmations of trades made under this Trading Plan to the Issuer at the following address:

Carol Kerr

LECG, LLC

2049 Century Park East, Ste 2300

Los Angeles, CA 90067

(d) UBS Financial Services Inc. will provide notification of all sales of Stock under this Trading Plan to Seller and to Issuer by e-mail at the below addresses by 6 p.m. (ET) on the date of execution on a best efforts basis, with a final report by 12 p.m. (ET) on the following business day. Seller and Issuer agree to notify UBS Financial Services Inc. in writing of any changes to the contact information provided.

dteece@teece.net

mmurphy@lecg.com

ckerr@lecg.com

amisaka@teece.net

michael.noble@ubs.com

12. Amendments and Modifications. This Trading Plan and the Exhibits hereto may be amended by Seller only upon the written consent of UBS Financial Services Inc. and receipt by UBS Financial Services Inc. of the following documents, each dated as of the date of such amendment:

(a) a certificate signed by Seller, certifying that the representations and warranties of Seller contained in this Trading Plan are true at and as of the date of such certificate as if made at and as of such date; and

(b) an issuer certificate completed by Issuer substantially in the form of Exhibit B.

13. Inconsistency with Law. If any provision of this Trading Plan is or becomes inconsistent with any applicable present or future law, rule or regulation, that provision will be deemed modified or, if necessary, rescinded in order to comply with the relevant law, rule or regulation. All other provisions of this Trading Plan will continue and remain in full force and effect.

14. Governing Law. This Trading Plan shall be governed by and construed in accordance with the internal laws of the State of New York.

15. Entire Agreement. This Trading Plan, including Exhibits, and the brokerage account agreement referred to in paragraph 4(a) above, constitute the entire agreement between the parties with respect to this Trading Plan and supercede any prior agreements or understandings with regard to this Trading Plan.

16. Counterparts. This Trading Plan may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

NOTICE: THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE IN PARAGRAPH 10.

IN WITNESS WHEREOF, the undersigned have signed this Trading Plan as of the date first written above.

/s/ David J. Teece		November 30, 2007
David J. Teece		Date

UBS FINANCIAL SERVICES INC.



/s/ Igor Shteyn		November 30, 2007
Name: Igor Shteyn		Date
Title: Director

/s/ David Stack		November 30, 2007
Name: David Stack		Date
Title: Associate Director

After reasonable inquiry and to the best of my knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.

Date: November 30, 2007	DAVID J. TEECE

	By:	/s/ David J. Teece
		David J. Teece

EX-5 3 a07-30618_1ex5.htm EXHIBIT 5

Exhibit 5

Option No.: 307

LECG HOLDING COMPANY, LLC

2000 INCENTIVE PLAN

NONQUALIFIED OPTION AGREEMENT

LECG Holding Company, LLC, a California limited liability company (the “Company”) hereby grants an option to purchase Common Units (the “Units”) as those Units are described in the Limited Liability Company Agreement of LECG Holding Company, LLC (the “LLC Agreement”) to the optionee named below. The terms and conditions of the option are set forth in this cover sheet, in the attached Agreement and in the Company’s 2000 Incentive Plan (the “Plan”).

Grant Date: October 30, 2001

Name of Optionee: David J. Teece

Optionee’s Social Security Number: ###-##-####

Number of Units Covered by Option: 500,000

Option Price Per Unit: $5.00

Vesting Start Date: Seventh anniversary of the Grant Date, subject to performance-based acceleration as set forth in Section 2(b) of the attached Agreement.

By signing this cover sheet, you agree to all of the terms and conditions described in the attached Agreement and the Plan, a copy of which is also attached. You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.

	Optionee:		/s/ David J. Teece
			(Signature)


	Company:		/s/ J. Geoffrey Colton
	By:		J. Geoffrey Colton
	Title:		Chief Financial Officer

Attachment

This is not a certificate or a negotiable instrument.

LECG HOLDING COMPANY, LLC

NONQUALIFIED OPTION AGREEMENT

1. Nonqualified Option. This option is not intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly.

2. Vesting.

(a) Vesting Date. Subject to acceleration as provided in Section 2(b) hereof, and termination as provided in Section 4 hereof, this option shall vest in its entirety on the 7th anniversary of the Grant Date, as set forth on the cover sheet (the “Vesting Date”).

(b) Performance-Based Accelerated Vesting. This option shall vest prior to the Vesting Date if and when holders of the Company’s Class A Preferred Units (the “Preferred Unit Investors”) achieve a minimum return equal to four (4) times the the aggregate purchase price paid by the Preferred Unit Investors for both their Class A Preferred Units and their Common Units (the “Minimum Return Threshold”). The Class A Preferred Units and the Common Units purchased by the Preferred Unit Investors are referred to herein as the “Investment Units.” The Preferred Unit Investors will have achieved the Minimum Return Threshold if one or all of the following events occurs:

(1) The total cumulative value of all distributions to the Preferred Unit Investors on the Investment Units made pursuant to Section 4.1 of the Company’s Limited Liability Company Agreement dated as of September 29, 2000, as amended (the “LLC Agreement”), whether made in cash or in additional units, equals the Minimum Return Threshold; or

(2) The total consideration received by the Preferred Unit Investors in a sale or exchange of the Investment Units (including, without limitation, distributions made pursuant to Section 4.1(e) of the LLC Agreement as a result of such sale or exchange) equals the Minimum Return Threshold; or

(3) The sum of (A) the aggregate consideration received by the Preferred Units Investors pursuant to a mandatory redemption of the Class A Preferred Units following a Public Offering (as that term is defined in the LLC Agreement) plus (B) the average closing price of the Company’s Common Units (or equivalent thereof) over a period of twenty (20) consecutive trading days following a Public Offering multiplied by the aggregate number of Common Units held by the Preferred Unit Investors, equals the Minimum Return Threshold; or

(4) The combined value of the distributions described in item (1) plus the consideration described in item (2) and/or item (3) equals the Minimum Return Threshold.

3. Term. This option will expire in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the cover sheet. This option will expire earlier if your Service terminates, as described below.

4. Regular Termination. If your Service terminates for any reason, other than death, Disability or Cause, then this option will expire at the close of business at Company headquarters on the 90th day after your termination date.

5. Termination for Cause. If your Service is terminated for Cause, then you shall immediately forfeit all rights to this option and this option shall immediately expire.

6. Death. If your Service terminates because of your death, then this option will expire at the close of business at Company headquarters on the date twelve (12) months after the date of death. During that twelve-month period, your estate or heirs may exercise this option if it has vested.

In addition, if you die during the 90-day period described in connection with a regular termination (i.e., a termination of your Service not on account of your death, Disability or Cause), and this option has vested but has not yet been exercised, then this option will instead expire on the date twelve (12) months after your termination date. In such a case, during the period following your death up to the date twelve (12) months after your termination date, your estate or heirs may exercise the vested option.

7. Disability. If your Service terminates because of your Disability, then this option will expire at the close of business at Company headquarters on the date twelve (12) months after your termination date.

8. Leaves of Absence. For purposes of this option, your Service does not terminate when you go on a bona fide employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, your Service will be treated as terminating 90 days after you went on employee leave, unless your right to return to active work is guaranteed by law, by a contract or by agreement of the Company. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work.

9. Notice of Exercise. When you wish to exercise this option, you must notify the Company by filing the proper “Notice of Exercise” form at the address given on the form. Your notice must specify how many Units you wish to purchase (in a parcel of at least 100 Units generally). Your notice must also specify how your Units should be registered (in your name only or in your and your spouse’s names as joint tenants with right of survivorship). The notice will be effective when it is received by the Company.

If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

10. Form of Payment. When you submit your notice of exercise, you must include payment of the option price for the Units you are purchasing. Payment may be made in one (or a combination) of the following forms:

• Cash, your personal check, a cashier’s check, a money order or another cash equivalent acceptable to the Company.

• After a Triggering Event (as defined in the Plan), in a cashless exercise utilizing Units which have already been owned by you for more than six months and which are surrendered to the Company. The value of the Units, determined as of the effective date of the option exercise, will be applied to the option price.

• After a Triggering Event (as defined in the Plan) and to the extent a public market for the Units exists as determined by the Company, by delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell Units and to deliver all or part of the sale proceeds to the Company in payment of the aggregate option price and any withholding taxes.

11. Withholding Taxes. You will not be allowed to exercise this option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the option, exercise, or sale of Units acquired under this option. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise or sale of Units arising from this grant, the Company shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Company or any Affiliate.

12. Transfer of Option. During your lifetime, only you (or, in the event of your legal incapacity or incompetency, your guardian or legal representative) may exercise this option. You cannot transfer or assign this option. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, dispose of this option in your will, by instrument to an intervivos or testamentary trust in which Options are to be passed to the beneficiaries on the death of the trustor (settlor) (provided that such a disposition is in compliance with Section 8.2 of the Plan), or it may be transferred upon your death by the laws of descent and distribution. Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your spouse, nor is the Company obligated to recognize your spouse’s interest in this option in any other way.

13. Market Stand-off Agreement. In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company’s initial public offering, you agree not to sell, make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or agree to engage in any of the foregoing transactions with respect to any Units without the prior written consent of the Company or its underwriters, for such period of time after the effective date of such registration statement as may be requested by the Company or the underwriters (not to exceed 180 days in length).

14. Investment Representation. If the sale of Units under the Plan is not registered under the Representation Securities Act, but an exemption is available which requires an investment or other representation, you

shall represent and agree at the time of exercise that the Units being acquired upon exercise of this option is being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel.

15. Transfer Restrictions. Any Units acquired under this Agreement, or any interest in such Units, are subject to a right of first refusal under that certain Securityholders’ Agreement dated as of September 29, 2000, as amended, by and among the Company’s unitholders and are also subject to restrictions on transfer under the LLC Agreement.

The transfer restrictions and the Company’s right of first refusal shall terminate in the event that the Units are listed on an established national or regional stock exchange, are admitted for quotation on the Nasdaq Stock Market, or are publicly traded in an established securities market.

16. Right to Repurchase. Following termination of your Service for any reason, the Company shall have the right to purchase all of those Units that you acquire under this option. If the Company exercises its right to purchase the Units, the Company will notify you of its intention to purchase such Units, and will consummate the purchase within 90 days of your termination of Service or, in the case of Units acquired after your termination of Service, within 90 days of the date of exercise.

The purchase price shall be the Fair Market Value of the Units on the date of your termination of Service if the Company exercises its right to purchase such Units within 90 days of your termination of Service, or exercises its right within 90 days of the date of your exercise of the option following termination of Service.

The Company’s rights of repurchase shall terminate in the event that the Units are listed on an established national or regional stock exchange, are admitted for quotation on the Nasdaq Stock Market, or are publicly traded in an established securities market.

17. Retention Rights. Neither this option nor this Agreement gives you the right to be retained by the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The Company (and any Parent, Subsidiaries or Affiliates) reserves the right to terminate your Service at any time and for any reason.

18. Unitholder Rights. You, or your estate or heirs, have no rights as a unitholder of the Company under the LLC Agreement until (i) a certificate for your option’s Units has been issued, and (ii) you have executed the LLC Agreement and the Securityholders’ Agreement. No adjustments are made for distributions or other rights if the applicable record date occurs before your Unit certificate is issued, except as described in the Plan.

19. Forfeiture of Rights. If you should take actions in competition with the Company, the Company shall have the right to cause a forfeiture of your rights, including, but not limited to, the right to cause: (i) a forfeiture of any outstanding option, and (ii) with respect to the period commencing twelve (12) months prior to your termination of Service with the Company and ending twelve (12) months following such termination of Service (A) a forfeiture of any gain recognized by you upon the exercise of an option or (B) a forfeiture of any Units acquired by you upon the exercise of an option (but the Company will pay you the option price without interest). Unless otherwise specified in an employment or other agreement between the Company and you, you take actions in competition with the Company if you directly or

indirectly, own, manage, operate, join or control, or participate in the ownership, management, operation or control of, or are a proprietor, director, officer, stockholder, member, partner or an employee or agent of, or a consultant to any business, firm, corporation, partnership or other entity which competes with any business in which the Company or any of its Affiliates is engaged during your employment or other relationship with the Company or its Affiliates or at the time of your termination of Service.

20. Adjustments. In the event of a unit split, a unit dividend or a similar change in the Units, the number of Units covered by this option and the option price per Unit may be adjusted (and rounded down to the nearest whole number) pursuant to the Plan. This option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such organizational activity.

21. Legends. All certificates representing the Units issued upon exercise of this option shall, where applicable, have endorsed thereon the legends required by the Securityholders’ Agreement.

22. Applicable Law. This Agreement will be interpreted and enforced under the laws of the State of California, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

23. The Plan. The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan.

This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded.

24. Other Agreements. You agree, as a condition of the grant of this option, that in connection with the exercise of the option, you will execute such document(s) as necessary to become a party to the LLC Agreement and the Securityholders’ Agreement, or such other similar agreement as the Company may require.

By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.

Option No.: 585

LECG HOLDING COMPANY, LLC

2000 INCENTIVE PLAN

NONQUALIFIED OPTION AGREEMENT

LECG Holding Company, LLC, a California limited liability company (the “Company”), hereby grants an option to purchase Common Units (the “Units”), as those Units are described in the Limited Liability Company Agreement of LECG Holding Company, LLC (the “LLC Agreement”) to the optionee named below. The terms and conditions of the option are set forth in this cover sheet, in the attachment and in the Company’s 2000 Incentive Plan (the “Plan”)..

Grant Date: October 13, 2003

Name of Optionee: David Teece

Optionee’s Social Security Number (optional): ###-##-####

Number of Units Covered by Option: 75,000

Option Price per Unit: $10.00

Vesting Start Date: October 13, 2003

By signing this cover sheet, you agree to all of the terms and conditions described in the attached Agreement and in the Plan, a copy of which is also attached. You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.

Optionee:	/s/ David Teece
	David Teece


Company:	/s/ John C. Burke
	John C. Burke


	Title:	Chief Financial Officer

Attachment

This is not a certificate or a negotiable instrument.

LECG HOLDING COMPANY, LLC

2000 INCENTIVE PLAN

NONQUALIFIED OPTION AGREEMENT

Nonqualified Option

This option is not intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly.

Vesting

This option is only exercisable before it expires and then only with respect to the vested portion of the option. Subject to the preceding sentence, you may exercise this option, in whole or in part, to purchase a whole number of vested Units not less than 100 Units, unless the number of Units purchased is the total number available for purchase under the option, by

		following the procedures set forth in the Plan and below in this Agreement. Your right to purchase Units under this option vests as to one fifth (1/5) of the total number of Units covered by this option, as shown on the cover sheet, on the one-year anniversary of the Vesting Start Date (“Anniversary Date”), provided you then continue in Service. Thereafter, for each such vesting date that you remain in Service, the number of Units which you may purchase under this option shall vest at the rate of one-sixtieth (1/60) per month (i.e., 1/60 of the total number of Units covered by this option) as of the first day of each month following the month of the Anniversary Date. The resulting aggregate number of vested Units will be rounded to the nearest whole number, and you cannot vest in more than the number of Units covered by this option. No additional Units will vest after your Service has terminated for any reason.
Term		Your option will expire in any event at the close of business at Company headquarters on the day before the tenth (10th) anniversary of the Grant Date, as shown on the cover sheet. Your option will expire earlier if your Service terminates, as described below.
Regular Termination		If your Service terminates for any reason, other than death, Disability or Cause, then your option will expire at the close of business at Company headquarters on the 90th day after your termination date.
Termination for Cause		If your Service is terminated for Cause, then you shall immediately forfeit all rights to your option and the option shall immediately expire.
Death		If your Service terminates because of your death, then your option will expire at the close of business at Company headquarters on the date twelve (12) months after the date of death. During that twelvemonth period, your estate or heirs may exercise the vested portion of your option. In addition, if you die during the 90-day period described in connection with a regular termination (i.e., a termination of your Service not on account of your death, Disability or Cause), and a vested portion of your option has not yet been exercised, then your option will instead expire on the date twelve (12) months after your termination date. In such a case, during the period following your death up to the date twelve (12) months after your termination date, your estate or heirs may exercise the vested portion of your option.
Disability		If your Service terminates because of your Disability, then your option will expire at the close of business at Company headquarters on the date twelve (12) months after your termination date.
Leaves of Absence		For purposes of this option, your Service does not terminate when you go on a bona fide employee leave of absence that was approved by the

		Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, your Service will be treated as terminating ninety (90) days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work. The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purpose under the Plan.
Notice of Exercise		When you wish to exercise this option, you must notify the Company by filing the proper “Notice of Exercise” form at the address given on the form. Your notice must specify how many Units you wish to purchase (in a parcel of at least 100 Units generally). Your notice must also specify how your Units should be registered (in your name only or in your and your spouse’s names as joint tenants with right of survivorship). The notice will be effective when it is received by the Company.
		If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.
Form of Payment		If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so. When you submit your notice of exercise, you must include payment of the option price for the Units you are purchasing. Payment may be made in one (or a combination) of the following forms: X Cash, your personal check, a cashier’s check, a money order or another cash equivalent acceptable to the Company. X After a Triggering Event (as defined in the Plan), by Units which have already been owned by you for more than six months and which are surrendered to the Company. The value of the Units, determined as of the effective date of the option exercise, will be applied to the option price. X After a Triggering Event (as defined in the Plan) and to the extent a public market for the Units exists as determined by the Company, by delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell Units and to deliver all or part of the sale proceeds to the Company in payment of the aggregate option price and any withholding taxes.

Withholding Taxes		You will not be allowed to exercise this option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the option exercise or sale of Units acquired under this option. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise or sale of Units arising from this grant, the Company shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Company or any Affiliate.
Transfer of Option		During your lifetime, only you (or, in the event of your legal incapacity or incompetency, your guardian or legal representative) may exercise the option. You cannot transfer or assign this option. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, dispose of this option in your will, by instrument to an intervivos or testamentary trust in which Options are to be passed to the beneficiaries on the death of the trustor (settlor) (provided that such a disposition is in compliance with Section 8.2 of the Plan), or it may be transferred upon your death by the laws of descent and distribution. To the extent permitted by applicable law, you may also transfer, not for value, all or part of this option to any Family Member. [As amended by resolution of the Board of Directors effective as of June 7,2002] For the purposes of this Agreement, a “not for value” transfer has the meaning given to it in Section 8.2 of the Plan. Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your spouse, nor is the Company obligated to recognize your spouse’s interest in your option in any other way.
Market Stand-off Agreement		In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company’s initial public offering, you agree not to sell, make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or agree to engage in any of the foregoing transactions with respect to any Units without the prior written consent of the Company or its underwriters, for such period of time after the effective date of such registration statement as may be requested by the Company or the underwriters (not to exceed 180 days in length).
Investment Representation		If the sale of Units under the Plan is not registered under the Securities Act, but an exemption is available which requires an investment or other representation, you shall represent and agree at the time of exercise that the Units being acquired upon exercise of this option is being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel.

Transfer Restrictions		Any Units acquired under this Agreement, or any interest in such Units, are subject to a right of first refusal under that certain Securityholders’ Agreement dated as of September 29, 2000 by and among the Company’s unitholders and are also subject to restrictions on transfer under the LLC Agreement. The transfer restrictions shall terminate in the event that the Units are listed on an established national or regional stock exchange, are admitted for quotation on the Nasdaq Stock Market, or are publicly traded in an established securities market.
Right to Repurchase		Following termination of your Service for any reason, the Company shall have the right to purchase all of those Units that you have or will acquire under this option. If the Company exercises its right to purchase the Units, the Company will notify you of its intention to purchase such Units, and will consummate the purchase within 90 days of your termination of Service or, in the case of Units acquired after your termination of Service, within 90 days of the date of exercise. The purchase price shall be the Fair Market Value of the Units on the date of your termination of Service if the Company exercises its right to purchase such Units within 90 days of your termination of Service or exercises its right within 90 days of the date of your exercise of the option following termination of Service. The Company’s rights of repurchase shall terminate in the event that the Units are listed on an established national or regional stock exchange, are admitted for quotation on The Nasdaq Stock Market, or are publicly traded in an established securities market.
Retention Rights		Neither your option nor this Agreement give you the right to be retained by the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The Company (and any Parent, Subsidiaries or Affiliates) reserve the right to terminate your Service at any time and for any reason.
Unitholder Rights		You, or your estate or heirs, have no rights as a unitholder of the Company under the LLC Agreement until (i) a certificate for your option’s Units has been issued, and (ii) you have executed the LLC Agreement and the Securityholders’ Agreement. No adjustments are made for distributions or other rights if the applicable record date occurs before your Unit certificate is issued, except as described in the Plan.
Forfeiture of Rights		If you should take actions in competition with the Company, the Company shall have the right to cause a forfeiture of your rights, including, but not limited to, the right to cause: (i) a forfeiture of any outstanding option, and (ii) with respect to the period commencing twelve (12) months prior to your termination of Service with the Company and ending twelve (12) months following such termination of Service (A) a forfeiture of any gain

		recognized by you upon the exercise of an option or (B) a forfeiture of any Units acquired by you upon the exercise of an option (but the Company will pay you the option price without interest). Unless otherwise specified in an employment or other agreement between the Company and you, you take actions in competition with the Company if you directly or indirectly, own, manage, operate, join or control, or participate in the ownership, management, operation or control of, or are a proprietor, director, officer, stockholder, member, partner or an employee or agent of, or a consultant to any business, firm, corporation, partnership or other entity which competes with any business in which the Company or any of its Affiliates is engaged during your employment or other relationship with the Company or its Affiliates or at the time of your termination of Service.
Adjustments		In the event of a unit split, a unit dividend or a similar change in the Units, the number of Units covered by this option and the option price per may be adjusted (and rounded down to the nearest whole number) pursuant to the Plan. Your option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such organizational activity.
Legends		All certificates representing the Units issued upon exercise of this option shall, where applicable, have endorsed thereon the legends required by the Securityholders’ Agreement.
Applicable Law		This Agreement will be interpreted and enforced under the laws of the State of California, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
The Plan		The text of the Plan is incorporated in this Agreement by reference. *Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan.* This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded.
Other Agreements		You agree, as a condition of the grant of this option, that in connection with the exercise of the option, you will execute such documents) as necessary to become a party to the LLC Agreement and the Securityholders’ Agreement, or such other similar agreement as the Company may require.

By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.

Under the Securities Exchange Act of 1934 (Amendment No. 1)*

Signature

Under the Securities Exchange Act of 1934
(Amendment No. 1)*