Exhibit 10.2

 

EXECUTION VERSION

 

STANDSTILL AGREEMENT

 

This STANDSTILL AGREEMENT is made and entered into as of April 22, 2016 (the
“Agreement”) by and among Guidance Software, Inc., a Delaware corporation (the
“Company”), and Michael J. McConnell (the “Investor”).  The Company and the
Investor are referred to herein as the “Parties.”

 

WHEREAS, the Investorbeneficially owns the number of shares of the Company’s
common stock, par value $0.001 per share (the “Common Stock”) listed on
Exhibit A hereto;

 

WHEREAS, on March 30, 2016, the Company filed a definitive proxy statement with
the Securities and Exchange Commission (the “SEC”) nominating and recommending
for election six director candidates (the “Company Proxy Statement”) for
election to the Company’s Board of Directors (the “Board”) at the Company’s 2016
annual meeting of stockholders (including any adjournment thereof, the “2016
Annual Meeting”); and

 

WHEREAS, on March 30, 2016, Shawn H. McCreight, John P. Colbert, Jonathan R.
Mather, Michael J. McConnell and Roberto Medrano filed a definitive proxy
statement with the SEC nominating and recommending for election five director
candidates (the “McCreight Proxy Statement”) for election to the Board at the
2016 Annual Meeting.

 

WHEREAS, the Company and the Investor have reached an agreement with respect to
certain matters related to the 2016 Annual Meeting, including the Company Proxy
Statement and the McCreight Proxy Statement and certain other matters, as
provided in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
hereby agree as follows:

 

Section 1.        Standstill.

 

(a)        The Investor agrees that, from the date of this Agreement until the
expiration of the Standstill Period, neither it nor any of its Affiliates or
Associates will, and it will cause each of its Affiliates and Associates not to,
directly or indirectly, in any manner, acting alone or in concert with others:

 

(i)         submit any shareholder proposal (pursuant to Rule 14a-8 promulgated
by the Securities and Exchange Commission (the “SEC”) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise) or any
notice of nomination or other business for consideration, or nominate any
candidate for election to the Board (including by way of Rule 14a-11 of
Regulation 14A), other than as expressly permitted by this Agreement;

 

(ii)        engage in, directly or indirectly, any “solicitation” (as defined in
Rule 14a-1 of Regulation 14A) of proxies (or written consents) or otherwise
become a “participant in a solicitation” (as such term is defined in Instruction
3 of Schedule 14A of

 

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Regulation 14A under the Exchange Act) in opposition to the recommendation or
proposal of the Board, or recommend or request or induce or attempt to induce
any other person to take any such actions, or seek to advise, encourage or
influence any other person with respect to the voting of the Common Stock
(including any withholding from voting) or grant a proxy with respect to the
voting of the Common Stock or other voting securities to any person other than
to the Board or persons appointed as proxies by the Board;

 

(iii)       seek to call, or to request the call of, a special meeting of the
Company’s stockholders, or make a request for a list of the Company’s
stockholders or for any books and records of the Company;

 

(iv)       form, join in or in any other way participate in a “partnership,
limited partnership, syndicate or other group” within the meaning of
Section 13(d)(3) of the Exchange Act with respect to the Common Stock or deposit
any shares of Common Stock in a voting trust or similar arrangement or subject
any shares of Common Stock to any voting agreement or pooling arrangement, other
to the extent such a group may be deemed to result with the Company or any of
its Affiliates of Associates as a result of this Agreement;

 

(v)        vote for any nominee or nominees for election to the Board, other
than those nominated or supported by the Board;

 

(vi)       seek to place a representative or other Affiliate, Associate or
nominee on the Board or seek the removal of any member of the Board or a change
in the size or composition of the Board;

 

(vii)      other than at the direction of the Board, seek, propose, or make any
statement, in each case publicly, with respect to, or solicit, negotiate with,
or provide any information to any person, in each case publicly, with respect
to, a merger, consolidation, acquisition of control or other business
combination, tender or exchange offer, purchase, sale or transfer of assets or
securities, dissolution, liquidation, reorganization, change in structure or
composition of the Board, change in the executive officers of the Company,
change in capital structure, recapitalization, dividend, share repurchase or
similar transaction involving the Company, its subsidiaries or its business,
whether or not any such transaction involves a change of control of the Company;

 

(viii)     acquire, announce an intention to acquire, offer or propose to
acquire, or agree to acquire, directly or indirectly, by purchase or otherwise,
beneficial ownership of any (A) interests in any of the Company’s indebtedness
or (B) Common Stock of the Company representing in the aggregate (amongst the
Investor and its Affiliates and Associates) in excess of 1.0% of the Company’s
outstanding Common Stock; provided, however, nothing herein shall prevent the
Investor from confidentially seeking a waiver to acquire in excess of 1.0% of
the Company’s outstanding Common Stock;

 

(ix)       commence, encourage or support any derivative action in the name of
the Company or any class action or other litigation against the Company with
respect to any facts or events occurring or arising prior to the date hereof or
relating to any potential strategic transactions pursued by the Company;

 

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(x)        disclose publicly, or privately in a manner that could reasonably be
expected to become public, any intention, plan or arrangement inconsistent with
the foregoing;

 

(xi)       take any action challenging the validity or enforceability of any
provisions of this Section 1; or

 

(xii)      enter into any agreement, arrangement or understanding concerning any
of the foregoing (other than this Agreement) or encourage or solicit any person
to undertake any of the foregoing activities.

 

Notwithstanding anything to the contrary in this Agreement, including this
Section 1, nothing in this Agreement shall be deemed to prohibit the Investor
from (A) voting for or against (1) any acquisition of any material assets or
businesses of the Company or any of its subsidiaries, (2) any tender offer or
exchange offer, merger, acquisition or other business combination involving the
Company or any of its subsidiaries, or (3) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with respect to the
Company or any of its subsidiaries, (B) communicating privately with the Board
or the Chief Executive Officer of the Company regarding any matter, (C) making
any public statement or announcement with respect to a transaction as described
in clause (A) of this paragraph proposed by the Company that requires a vote of
the stockholders and that is publicly announced by the Company after the date of
this Agreement, or (D) voting for or against any matter requiring shareholder
approval other than with respect to the election of directors nominated by the
Board.

 

(b)        As used in this Agreement:

 

(i)         the terms “Affiliate” and “Associate” shall have the respective
meanings set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act;

 

(ii)        the terms “beneficial owner” and “beneficial ownership” shall have
the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the
Exchange Act;

 

(iii)       the terms “person” or “persons” shall mean any individual,
corporation (including not-for-profit), general or limited partnership, limited
liability company, joint venture, estate, trust, association, organization or
other entity of any kind or nature; and

 

(iv)       the term “Standstill Period” shall mean the period commencing on the
date of this Agreement, and ending on the commencement of the director
nomination window for the 2018 Annual Meeting.

 

Section 2.        Representations and Warranties of the Company.  The Company
represents and warrants to the Investor that (a) the Company has the corporate
power and authority to execute the Agreement and to bind it thereto, (b) this
Agreement has been duly and validly authorized, executed and delivered by the
Company, constitutes a valid and binding obligation and agreement of the
Company, and is enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
generally affecting the rights of creditors and subject to general equity
principles and (c) the execution, delivery and performance of this Agreement by
the Company does not and will not

 

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violate or conflict with (i) any law, rule, regulation, order, judgment or
decree applicable to it, or (ii) result in any breach or violation of or
constitute a default (or an event which with notice or lapse of time or both
could become a default) under or pursuant to, or result in the loss of a
material benefit under, or give any right of termination, amendment,
acceleration or cancellation of, any organizational document, or any material
agreement, contract, commitment, understanding or arrangement to which the
Company is a party or by which it is bound.

 

Section 3.        Representations and Warranties of the Investor.  The Investor
represents and warrants to the Company that (a) as of the date hereof, the
Investor beneficially owns only the number of shares of Common Stock as
described opposite its name on Exhibit A and Exhibit A includes all Affiliates
of the Investor that own any securities of the Company beneficially or of
record, (b) this Agreement has been duly and validly authorized, executed and
delivered by the Investor, and constitutes a valid and binding obligation and
agreement of the Investor, enforceable against the Investor in accordance with
its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
similar laws generally affecting the rights of creditors and subject to general
equity principles, (c) the Investor has the authority to execute the Agreement
on behalf of itself and the applicable Investor associated with that signatory’s
name, and to bind the Investor to the terms hereof and (d) the execution,
delivery and performance of this Agreement by the Investor does not and will not
violate or conflict with (i) any law, rule, regulation, order, judgment or
decree applicable to it, or (ii) result in any breach or violation of or
constitute a default (or an event which with notice or lapse of time or both
could become a default) under or pursuant to, or result in the loss of a
material benefit under, or give any right of termination, amendment,
acceleration or cancellation of, any organizational document, agreement,
contract, commitment, understanding or arrangement to which such member is a
party or by which it is bound.

 

Section 4.        Specific Performance.  The Investor, on the one hand, and the
Company, on the other hand, acknowledges and agrees that irreparable injury to
the other Party hereto may occur in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or are
otherwise breached and that such injury would not be adequately compensable in
monetary damages.  It is accordingly agreed that the Investor, on the one hand,
and the Company, on the other hand (the “Moving Party”), shall each be entitled
to specific enforcement of, and injunctive or other equitable relief to prevent
any violation of, the terms hereof, and the other party hereto will not take
action, directly or indirectly, in opposition to the Moving Party seeking such
relief on the grounds that any other remedy or relief is available.

 

Section 5.        Notice.  Any notices, consents, determinations, waivers or
other communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) business day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

 

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To the Company:

 

Guidance Software, Inc.

1055 E. Colorado Blvd.

Pasadena, CA

Fax:

(626) 316-5922

Attn:

Alfredo Gomez, General Counsel

 

with a copy to (which shall not constitute notice):

 

Latham & Watkins LLP

350 South Grand Avenue

Los Angeles, CA 90017

E-mail: julian.kleindorfer@lw.com

Attention: Julian Kleindorfer

 

To the Investor:

 

c/o Morrison & Foerster

425 Market Street

San Francisco, CA 94105

Fax: (415)268-7522

Attn: Murray Indick, Esq.

 

 

Section 6.        Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the Law of the State of Delaware, without regard
to conflict of law principles thereof.

 

Section 7.        Exclusive Jurisdiction.  Each Party to this Agreement
(i) irrevocably and unconditionally submits to the personal jurisdiction of the
state courts of the State of Delaware and the federal courts of the United
States of America located in the State of Delaware, (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court, (iii) agrees that any actions or proceedings
arising in connection with this Agreement or the transactions contemplated by
this Agreement shall be brought, tried and determined only in the state and
federal courts for or in the State of Delaware, (iv) waives any claim of
improper venue or any claim that those courts are an inconvenient forum and
(v) agrees that it will not bring any action relating to this Agreement or the
transactions contemplated hereunder in any court other than as specified in
clause (iii) of this Section 7.

 

Section 8.        Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND AGREES THAT
ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LEGAL ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT

 

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OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO
ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS
CONSIDERED AND UNDERSTANDS THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES
THIS WAIVER VOLUNTARILY AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 8.

 

Section 9.        Receipt of Adequate Information; No Reliance; Representation
by Counsel.  Each Party acknowledges that it has received adequate information
to enter into this Agreement, that is has not relied on any promise,
representation or warranty, express or implied not contained in this Agreement
and that it has been represented by counsel in connection with this Agreement. 
Accordingly, any rule of law or any legal decision that would provide any party
with a defense to the enforcement of the terms of this Agreement against such
party shall have no application and is expressly waived.  The provisions of the
Agreement shall be interpreted in a reasonable manner to effect the intent of
the Parties.

 

Section 10.      Severability.  If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement shall remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree
shall remain in full force and effect to the extent not held invalid or
unenforceable.  The Parties further agree to replace such invalid or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the purposes of such invalid or
unenforceable provision.

 

Section 11.      Entire Agreement.  This Agreement constitutes the entire
agreement among the parties relating to the matters contemplated hereby and
supersede any other agreements, whether written or oral, that may have been made
or entered into by or among any of the parties hereto or any of their respective
Affiliates relating to the matters contemplated hereby.  No representations,
warranties, covenants, understandings, agreements, oral or otherwise, relating
to the matters contemplated by this Agreement exist between the parties except
as expressly set forth in this Agreement.

 

Section 12.      Amendment.  This Agreement may be modified, amended or
otherwise changed only in a writing signed by all of the Parties.

 

Section 13.      Successors and Assigns; No Third Party Beneficiaries.  This
Agreement shall bind the successors and permitted assigns of the Parties, and
inure to the benefit of any successor or permitted assign of any of the parties;
provided, however, that no party may assign this Agreement without the prior
written consent of the other Parties.  No provision of this Agreement is
intended to confer any rights, benefits, remedies, obligations, or liabilities
hereunder upon any person other than the Parties hereto and their respective
successors and assigns.

 

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Section 14.      Counterparts.  This Agreement 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.  This Agreement
shall become effective when each Party hereto shall have received a counterpart
hereof signed by the other Parties hereto.  Counterparts delivered by electronic
transmission shall be deemed to be originally signed counterparts.

 

(Signature page follows)

 

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IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered this
Agreement as of the date first above written.

 

 

GUIDANCE SOFTWARE, INC.

 

 

 

 

 

By:

/s/ Patrick Dennis

 

Name: Patrick Dennis

 

Title: CEO

 

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INVESTOR:

 

 

 

MICHAEL J. MCCONNELL

 

 

 

/s/ Michael J. McConnell

 

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EXHIBIT A

 

Investor

 

Shares of Common Stock
Beneficially Owned

 

 

 

 

 

 

Michael J. McConnell

 

45,000

 

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