Document:

Exhibit 10.1

 

March [ · ], 2016

 

[          ]

 

Re: [      ]Amendment to Employment Terms

 

Dear [      ]:

 

Reference is hereby made to your employment offer letter with Guidance Software Inc. (the “Company”), dated as of [      ](the “Employment Letter”).  You and the Company have mutually agreed to amend certain provisions of the Employment Letter as set forth below.

 

Accordingly, effective as of the date hereof, the Employment Letter shall be amended as follows:

 

1.              The section of the Employment Letter entitled “Severance” is hereby amended and restated in its entirety as follows:

 

“Notwithstanding the “At-Will” nature of your employment with the Company, in the event that your employment is terminated by the Company without Cause or by you for Good Reason, then the Company shall pay to you a lump sum cash payment in an amount equal to one (1) times your annual base salary as in effect on your termination date (without giving effect to any reduction which constitutes Good Reason), payable within sixty (60) days after your termination date (with the exact payment date to be determined by the Company in its discretion).

 

In the event that a Change in Control occurs while you are employed by the Company and, on the date of or within 18 months after such Change in Control, your employment is terminated by the Company without Cause or by you for Good Reason (a “CIC Termination”), then the Company shall pay and provide you with the following payments and benefits in lieu of the payments described in the previous paragraph:

 

(i)                                     the Company shall pay you a lump sum cash payment in an amount equal to [      ] (  )(1) times the sum of (A) your annual base salary as in effect on your termination date, plus (B) your target annual bonus opportunity for the fiscal year in which your termination occurs (in the case of both (A) and (B), without giving effect to any reduction which constitutes Good Reason), payable within sixty (60) days after your termination date (with the exact payment date to be determined by the Company in its discretion);

 

(ii)                                  a lump sum cash payment in an amount equal to your target annual bonus opportunity for the fiscal year in which your termination occurs (without giving effect to any reduction which constitutes Good Reason), prorated to reflect the number of days that you were employed during such fiscal year, payable within sixty (60) days after your termination date (with the exact payment date to be determined by the Company in its discretion);

 

(iii)                               During the period commencing on your termination date and ending on the [      ](2) anniversary of your termination date (the “COBRA Period”), subject to your valid election to continue healthcare coverage under Section 4980B of the Internal Revenue Code and the regulations thereunder

 

(1)  Dennis - “one and one-half (1.5)”; Plaga - “one (1)”.

 

(2)  Dennis - “eighteen (18)-month”; Plaga - “twelve (12)-month”.

 

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(together, the “Code”), the Company shall, at its expense, continue to provide you and your eligible dependents with coverage under its group health plans, provided, however, that (A) if any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the COBRA Period to be, exempt from the application of Section 409A of the Code, or (B) the Company is otherwise unable to continue to cover you under its group health plan or doing so would jeopardize the tax-qualified status of such plans or would result in penalties (including without limitation, pursuant to Section 2716 of the Public Health Service Act or the Patient Protection and Affordable Care Act), then, in either case, an amount equal to each remaining Company premium payment shall thereafter be paid to you in substantially equal monthly installments over the COBRA Period (or the remaining portion thereof); and

 

(iv)                              100% accelerated vesting of all outstanding Company equity-based awards held by you immediately prior to your termination of employment (which, for the avoidance of doubt, shall be in addition to, and not in lieu of, any accelerated vesting to which you may be entitled under the applicable equity plan or award agreements governing such awards).  With respect to any equity-based awards with performance-based vesting conditions, such accelerated vesting shall be based on target-level performance, without any pro-ration based on the portion of the performance period completed prior to the date of termination.

 

Notwithstanding anything contained herein, your right to receive the payments and benefits set forth above is conditioned on and subject to (i) your execution within twenty-one (21) days (or, to the extent required by applicable law, forty-five (45) days) following your termination date and non-revocation within seven (7) days thereafter of a general release of claims substantially in the form attached hereto as Exhibit A (the “Release”).

 

[Notwithstanding anything to the contrary in this letter, no compensation or benefits, including without limitation any severance payments or benefits payable under this letter, shall be paid to you during the six (6)-month period following your “separation from service” from the Company (within the meaning of Section 409A of the Code) to the extent that the Company determines that paying such amounts at the time or times indicated in this letter would result in a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code.  If the payment of any such amounts is delayed as a result of the previous sentence, then on the first business day following the end of such six (6)-month period (or such earlier date upon which such amount can be paid under Section 409A of the Code without resulting in a prohibited distribution, including as a result of your death), the Company shall pay you a lump-sum amount equal to the cumulative amount that would have otherwise been payable to you during such six (6)-month period.](3)

 

For purposes of this letter, “Cause” shall have the meaning set forth in this letter prior to the amendment to this letter dated as of [          ], or, if Cause was not previously defined in this letter, then “Cause” shall mean:

 

(1)                                 your failure to render services to the Company or its subsidiaries in accordance with your assigned duties and responsibilities, and such failure of performance continues for a period of more than fifteen days after notice thereof has been provided to you by the Company (other than any such failure resulting from your disability);

 

(2)                                 any action or omission by you involving willful misconduct or gross negligence relating to your duties and responsibilities to the Company or its affiliates, including without limitation, disloyalty, dishonesty or breach of fiduciary duty;

 

(3)                                 your conviction of, or plea of guilty to, a crime, either in connection with the performance of your obligations to the Company or its affiliates or which otherwise shall adversely affect your ability to perform such obligations or which shall adversely affect the business activities, reputation, goodwill or image of the Company or its affiliates;

 

(3)  Plaga only.

 

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(4)                                 your breach of any material obligation you have under any written agreement with the Company or its affiliates or which have been delegated to you by the Company which, if capable of cure, is not cured within five days from receipt of notice from the Company;

 

(5)                                 any act of fraud, embezzlement, theft or misappropriation from the Company or its affiliates by you; or

 

(6)                                 [your inability to obtain and maintain the appropriate level of United States security clearance; provided, however that such inability shall not constitute Cause if, within 30 days following such inability, you have made good faith efforts towards achieving or maintaining such security clearance and you continue to make such efforts until such clearance is obtained].(4)

 

For purposes of this letter, “Good Reason” shall mean the occurrence of any one or more of the following events without your prior written consent, unless the Company fully corrects the circumstances constituting Good Reason (provided such circumstances are capable of correction) as provided below:

 

(1)                                 a material diminution in your position (including status, offices, titles and reporting requirements), authority, duties or responsibilities (including any such diminution resulting from the Company ceasing to be a publicly-held company or the Company becoming a subsidiary of a publicly-held company in connection with a Change in Control), excluding for this purpose any isolated, insubstantial or inadvertent actions not taken in bad faith and which are remedied by the Company promptly after receipt of notice thereof given by you;

 

(2)                                 the Company’s material reduction of your annual base salary or annual bonus opportunity, each as in effect on the date hereof or as the same may be increased from time to time;

 

(3)                                 the relocation of the Company’s offices at which you are principally employed to a location more than thirty (30) miles from such location; or

 

(4)                                 a material breach by the Company of this letter.

 

Notwithstanding the foregoing, you will not be deemed to have resigned for Good Reason unless (1) you provide the Company with written notice setting forth in reasonable detail the facts and circumstances which you claim constitute Good Reason within sixty (60) days after the date of the occurrence of any event that you know or should reasonably have known to constitute Good Reason, (2) the Company fails to cure such acts or omissions within thirty (30) days following its receipt of such notice, and (3) the effective date of your termination for Good Reason occurs no later than sixty (60) days after the expiration of the Company’s cure period.

 

For purposes of this letter, “Change in Control” shall mean and includes each of the following:

 

(1)                                 A transaction or series of transactions (other than an offering of common stock of the Company to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) directly or indirectly acquires beneficial ownership (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; provided, however, that the following acquisitions shall not constitute a Change in Control: (i) any acquisition by an employee benefit plan maintained by the Company or any of its subsidiaries, or (iii) any acquisition which complies with clause (3)(i) or (3)(ii) of this definition; or

 

(4)  Dennis only.

 

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(2)                                 During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board of Directors of the Company (the “Board”) together with any new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in clause (1), (3) or (4) hereof whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority thereof; or

 

(3)                                 The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination, (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

 

(i)                                     which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

 

(ii)                                  after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause 3(ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or

 

(4)                                 The Company’s stockholders approve a liquidation or dissolution of the Company.”

 

2.              [The section titled “Release of Claims” is hereby deleted in its entirety.](5)

 

This letter shall be and is hereby incorporated in and forms a part of the Employment Letter.  Except as expressly provided herein, all terms and provisions of the Employment Letter shall remain in full force and effect.

 

	
 
    	
 
    	
Guidance Software, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[Executive]
    	
 
    	
[Name]
    
	
 
    	
 
    	
[Title]
    
	
 
    	
 
    	
Guidance Software, Inc.
    

 

(5)  Plaga only.

 

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EXHIBIT A

 

GENERAL RELEASE

 

For a valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned does hereby release and forever discharge the “Releasees” hereunder, consisting of Guidance Software, Inc., a Delaware corporation (the “Company”), and each of its partners, associates, affiliates, successors, heirs, assigns, agents, directors, officers, employees, shareholders, representatives, lawyers, insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which the undersigned now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof. The Claims released herein include, without limiting the generality of the foregoing, any Claims in any way arising out of, based upon, or related to the employment or termination from employment of the undersigned by the Releasees, or any of them; except as expressly provided below, any claim for benefits under any stock option or other equity-based incentive plan of the Releasees (or any related agreement to which any Releasee is a party); any alleged breach of any express or implied contract of employment; any alleged torts or other alleged legal restrictions on Releasee’s right to terminate the employment of the undersigned; and any alleged violation of any federal, state or local statute or ordinance including, without limitation, the Age Discrimination in Employment Act, as amended, 29 U.S.C. § 621, et seq.; Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, 42 U.S.C. § 2000 et seq.; Equal Pay Act, as amended, 29 U.S.C. § 206(d); the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq.; the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq.; the False Claims Act , 31 U.S.C. § 3729 et seq.; the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.; the Worker Adjustment and Retraining Notification Act, as amended, 29 U.S.C. § 2101 et seq.; the Fair Labor Standards Act, 29 U.S.C. § 215 et seq.; the Sarbanes-Oxley Act of 2002; the California Fair Employment and Housing Act, as amended, Cal. Lab. Code § 12940 et seq.; the California Equal Pay Law, as amended, Cal. Lab. Code §§ 1197.5(a),1199.5; the Moore-Brown-Roberti Family Rights Act of 1991, as amended, Cal. Gov’t Code §§12945.2, 19702.3; California Labor Code §§ 1101, 1102, 69 Ops. Cal. Atty. Gen. 80 (1986); California Labor Code §§ 1102.5(a), (b); the California WARN Act, Cal. Lab. Code § 1400 et seq.; the California False Claims Act, Cal. Gov’t Code § 12650 et seq.; the California Corporate Criminal Liability Act, Cal. Penal Code § 387; and the California Labor Code. Notwithstanding the foregoing, this Release shall not operate to release any Claims which the undersigned may have to (a) payments or benefits under the section entitled “Severance” in the undersigned’s employment offer letter with the Company, dated as of [          , 20  ], as amended (the “Employment Letter”), (b)  accrued or vested benefits the undersigned may have, if any, as of the date hereof, under any applicable Company employee benefit plan,  (c) rights to indemnification arising under any indemnification agreement between the undersigned and the Company or its subsidiaries, any D&O insurance policy maintained by the Company or its subsidiaries or under the bylaws, certificate of incorporation of other similar governing document of the Company or its subsidiaries, (d) payments or benefits under any agreement evidencing outstanding equity-based awards of the Company held by the undersigned, or (d)  any claims that may not be released by the undersigned as a matter of law.

 

THE UNDERSIGNED ACKNOWLEDGES THAT THE UNDERSIGNED HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

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THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS THE UNDERSIGNED MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.

 

IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:

 

(1) THE UNDERSIGNED HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;

 

(2) THE UNDERSIGNED HAS [TWENTY-ONE (21)](6) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT; AND

 

(3) THE UNDERSIGNED HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE IT, AND THIS RELEASE WILL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION PERIOD.

 

The undersigned has not filed, and agrees not to initiate or cause to be initiated on the undersigned’s behalf, any complaint, charge, claim or proceeding against the Releasees before any local, state or federal agency, court or other body relating to any Claims released under this Release, including without limitation, any Claims relating to the undersigned’s employment or the termination of the undersigned’s employment, (each, individually, a “Proceeding”), and agrees not to participate voluntarily in any Proceeding.  Notwithstanding the foregoing, the undersigned may bring to the attention of the United States Equal Employment Opportunity Commission (the “EEOC”) claims of discrimination.  The undersigned waives any right the undersigned may have to benefit in any manner from any relief (whether monetary or otherwise) arising out of any Proceeding.

 

The undersigned represents and warrants that there has been no assignment or other transfer of any interest in any released Claim which the undersigned may have against Releasees, or any of them, and the undersigned agrees to indemnify and hold Releasees, and each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against the undersigned under this indemnity.

 

The undersigned agrees that if the undersigned hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against Releasees, or any of them, any of the Claims released hereunder, then the undersigned agrees to pay to Releasees, and each of them, in addition to any other damages caused to Releasees thereby, all attorneys’ fees incurred by Releasees in defending or otherwise responding to said suit or Claim; provided, however, that the undersigned shall not be obligated to pay the Releasees’ attorneys’ fees to the extent such fees are attributable to claims under the Age Discrimination in Employment Act or a challenge to the validity of the release of claims under the Age Discrimination in Employment Act.

 

The undersigned further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to the undersigned.

 

The undersigned acknowledges and agrees that he or she shall continue to be bound by all confidentiality, assignment of inventions and other restrictive covenants contained in the Employment Letter or in any other

 

(6)  45 days if required by applicable law.

 

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agreement, plan, program or policy to which the undersigned is a party or a participant, which restrictive covenants are incorporated by reference herein.

 

The provisions of this Release are severable, and if any part of this Release is found to be unenforceable, the other paragraphs (or portions thereof) shall remain fully valid and enforceable.

 

Nothing contained in this Release will be deemed or construed as an admission of wrongdoing or liability on the part of the Company or any Releasee.  This Release and any disputes or claims arising hereunder shall be construed in accordance with, governed by and enforced under the laws of the State of California without regard for any rules of conflicts of law.

 

THE EXECUTIVE ACKNOWLEDGES THAT HE HAS READ THIS RELEASE AND THAT HE FULLY KNOWS, UNDERSTANDS AND APPRECIATES ITS CONTENTS, AND THAT HE HEREBY EXECUTES THE SAME AND MAKES THIS RELEASE AND AGREEMENTS PROVIDED FOR HEREIN VOLUNTARILY AND OF HIS OWN FREE WILL.

 

IN WITNESS WHEREOF, the undersigned has executed this Release this      day of                ,       .

 

	
 
    	
 
    
	
 
    	
 
    
	
[Executive]
    	
 
    

 

7Exhibit 10.2

 

GUIDANCE SOFTWARE, INC.

 

SECOND AMENDED AND RESTATED 2004 EQUITY INCENTIVE PLAN

 

PERFORMANCE-VESTING RESTRICTED STOCK AGREEMENT

 

Guidance Software, Inc., a Delaware corporation (the “Company”), pursuant to its Second Amended and Restated 2004 Equity Incentive Plan, as amended from time to time (the “Plan”), hereby grants to the individual listed below (“Holder”) the number of shares of the Company’s common stock, par value $0.001 per share, set forth below (the “Shares”). This Restricted Stock Award is subject to all of the terms and conditions as set forth in this Performance-Vesting Restricted Stock Agreement (the “Agreement”) (including, without limitation, the Restrictions on the Shares set forth in the Agreement) and the Plan, each of which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Agreement.

 

NOTICE OF RESTRICTED STOCK AWARD

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Holder:
    	
 
    	
<@ParticipantName @>
    
	
 
    	
 
    	
 
    
	
Grant Date:
    	
 
    	
<@GrantDate @>
    
	
 
    	
 
    	
 
    
	
Total Number of Shares of Restricted Stock:
    	
 
    	
<@SharesGranted @>_Shares
    
	
 
    	
 
    	
 
    
	
Vesting Schedule:
    	
 
    	
Performance   Vesting Condition
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
As   soon as reasonably practicable, but not later than 60 days, following the   completion of the Performance Period (the “Certification Date”), the   Administrator shall determine the Core Product Revenue, the Performance   Vesting Percentage and the number of shares of Restricted Stock granted   hereby that have become Performance Vested Shares as of the completion of the   Performance Period.  Any shares of   Restricted Stock granted hereby which have not become Performance Vested   Shares as of the completion of the Performance Period will automatically be   cancelled and forfeited without payment of any consideration therefor, and   the Holder shall have no further right or interest in or with respect to such   shares of Restricted Stock.

 

In   the event that the Administrator determines that Core Product Revenue during   the Performance Period exceeds the “Target Level” and the Holder remains a   Service Provider through the Certification Date, then, effective as of the   Certification Date and subject to the limits set forth in the Plan, the   Company shall grant to the Holder an additional number of shares of   Restricted Stock equal to the excess of the number of Performance Vested   Shares over the number of
    

 

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shares   of Restricted Stock granted hereby (the “Additional Restricted Shares”),   and such Additional Restricted Shares shall constitute Performance Vested   Shares subject to the terms and conditions set forth in this Agreement.

 

For   purposes of this Agreement, the following terms shall have the meanings set   forth below.

 

“Performance   Period” means the period commencing on January 1, 2016 and ending on   the earlier of (i) December 31, 2016 or (ii) the date on which   an Acquisition occurs.

 

“Performance   Vesting Percentage” means a function of Core Product Revenue during the   Performance Period, and shall be determined as set forth below:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Core Product
   Revenue
   (in millions)
    	
 
    	
Performance
   Vesting
   Percentage
    	
 
    	
 
    
	
 
    	
 
    	
“Threshold Level”
    	
 
    	
$
    	
[ · ]
    	
 
    	
10
    	
%
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
$
    	
[ · ]
    	
 
    	
20
    	
%
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
$
    	
[ · ]
    	
 
    	
50
    	
%
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
$
    	
[ · ]
    	
 
    	
70
    	
%
    	
 
    
	
 
    	
 
    	
“Target Level”
    	
 
    	
$
    	
[ · ]
    	
 
    	
100
    	
%
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
$
    	
[ · ]
    	
 
    	
150
    	
%
    	
 
    
	
 
    	
 
    	
“High Level”
    	
 
    	
$
    	
[ · ]
    	
 
    	
200
    	
%
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In   the event that the Core Product Revenue falls between any two Core Product   Revenue levels specified in the table above, the Performance Vesting   Percentage shall be determined using straight line linear interpolation   between the achieved Core Product Revenue level and the next highest Core   Product Revenue level.

 

Time   Vesting Condition

 

Subject   to the terms of the Plan and the Agreement, the Restrictions set forth in   Section 2.2 below applicable to any Performance Vested Shares (if any)   will lapse and such Performance Vested Shares shall become fully vested and   nonforfeitable (i) with respect to fifty-percent (50%) of such Performance   Vested Shares, on the Certification Date, and (ii) with respect to   fifty-percent (50%) of such Performance Vested Shares, on the first   anniversary of the end of the Performance Period, subject to the Holder’s   continued status as a Service Provider through such date.
    

 

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ARTICLE I.

 

GENERAL

 

1.1          Definitions.  For purposes of the Agreement, the following terms shall have the meanings set forth below.  All capitalized terms used in this Agreement without definition shall have the meanings ascribed in the Plan.

 

(a)           “Core Product Revenue” means revenue derived from sales of the Company’s Endpoint Investigator, Risk Manager and Endpoint Security products.

 

(b)           “Performance Vested Shares” means the product of (i) the total number of shares of Restricted Stock granted hereby and (ii) the applicable Performance Vesting Percentage.

 

1.2          Incorporation of Terms of Plan. The Award (as defined below) is subject to the terms and conditions of the Plan which are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.

 

ARTICLE II.

 

AWARD OF RESTRICTED STOCK

 

2.2                               Award of Restricted Stock.

 

(a)           Award. In consideration of the Holder’s agreement to remain in the service or employ of the Company or one of its Subsidiaries, and for other good and valuable consideration, the Company issues to the Holder the Award described in this Agreement (the “Award”). The number of shares of Restricted Stock subject to the Award is set forth in the Notice of Restricted Stock Award above; provided, however, that in the event that the Administrator determines that Core Product Revenue during the Performance Period exceeds the “Target Level” and the Holder remains a Service Provider through the Certification Date, the Company shall grant the Holder the Additional Restricted Shares as set forth in the Notice of Restricted Stock Award above. The Holder is a Service Provider of the Company.

 

(b)           Book Entry Form. At the sole discretion of the Administrator, the shares of Restricted Stock will be issued in either (i) uncertificated form, with the shares of Restricted Stock recorded in the name of the Holder in the books and records of the Company’s transfer agent with appropriate notations to the extent that the shares of Restricted Stock remain subject to the Restrictions (as defined below), or (ii) certificate form pursuant to the terms of Sections 2.1(c) and (d).

 

(c)           Legend. Certificates representing shares of Restricted Stock issued pursuant to this Agreement shall, until all Restrictions on transfer imposed pursuant to this Agreement lapse or shall have been removed and new certificates are issued, bear the following legend (or such other legend as shall be determined by the Administrator):

 

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“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING REQUIREMENTS AND MAY BE SUBJECT TO FORFEITURE UNDER THE TERMS OF A RESTRICTED STOCK AWARD AGREEMENT BY AND BETWEEN GUIDANCE SOFTWARE, INC. AND THE REGISTERED OWNER OF SUCH SHARES OF RESTRICTED STOCK, AND SUCH SHARES OF RESTRICTED STOCK MAY NOT BE, DIRECTLY OR INDIRECTLY, OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES, EXCEPT PURSUANT TO THE PROVISIONS OF SUCH AGREEMENT.”

 

(d)           Escrow. The Secretary of the Company or such other escrow holder as the Administrator may appoint may retain physical custody of any certificates representing the shares of Restricted Stock until all of the Restrictions on transfer imposed pursuant to this Agreement lapse or shall have been removed. If an escrow holder is so appointed, the Holder shall not retain physical custody of any certificates representing shares of Restricted Stock issued to the Holder that are unvested and subject to Restrictions.

 

2.3                               Restrictions.

 

(a)           Forfeiture of Shares. In the event that the Holder ceases to be a Service Provider for any reason prior to the satisfaction of the Performance Vesting Condition or the Time Vesting Condition, as applicable, set forth in the Notice of Restricted Stock Award above, then, immediately upon such termination, the Holder shall automatically and without further action by the Holder, the Company or any other party forfeit any and all shares of Restricted Stock, including any outstanding Performance Vested Shares, then subject to the Restrictions, and the Holder shall have no further right or interest in such shares of Restricted Stock. In addition, any shares of Restricted Stock which have not become Performance Vested Shares as of the completion of the Performance Period shall automatically be cancelled and forfeited without payment of any consideration therefor, and the Holder shall have no further right to or interest in such shares.  Upon any such forfeiture, such shares of Restricted Stock shall, automatically and without further action by the Holder, the Company or any other party, be cancelled and returned to the status of authorized but unissued Shares. For purposes of this Agreement, “Restrictions” shall mean the restrictions on sale or other transfer set forth in Section 3.1 and the exposure to forfeiture set forth in this Section 2.3(a).

 

(b)           Vesting and Lapse of Restrictions. Subject to Section 2.2(a), the Award shall vest and the Restrictions shall lapse in accordance with the Performance Vesting Condition and the Time Vesting Condition set forth in the Notice of Restricted Stock Award above; provided, however, that to the extent permitted by applicable law and the terms of the Plan, the Administrator may, in its sole discretion, suspend the vesting and lapsing of Restrictions applicable to the Award during all or any part of any leave of absence from employment taken by the Holder.

 

(c)           Accelerated  Vesting. Subject to Section 2.2(a), in the event that an Acquisition occurs, then, immediately prior thereto, the Award shall vest and the Restrictions shall lapse with respect to 100% of the shares of Restricted Stock subject thereto, provided that

 

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the Holder continues to be a Service Provider until immediately prior to the Acquisition.  In the event such Acquisition occurs prior to Certification Date, then the Award shall vest at the “Target Level” Performance Vesting Percentage, without any pro-ration based on the portion of the Performance Period completed prior to the date of such Acquisition.

 

(d)           Tax Withholding; Conditions to Issuance of Certificates. Notwithstanding any other provision of this Agreement (including, without limitation, Section 2.1(b)):

 

(i)            No Shares shall be recorded in the name of the Holder in the books and records of the Company’s transfer agent and no new certificate shall be delivered to the Holder or the Holder’s legal representative unless and until the Holder or the Holder’s legal representative shall have paid to the Company the full amount of all federal and state withholding or other taxes applicable to the taxable income of Holder resulting from the grant of the shares of Restricted Stock or the lapse or removal of the Restrictions. The Administrator may in its discretion and in satisfaction of the foregoing requirement allow the Holder to elect to have the Company withhold Shares otherwise issuable under the Award (or allow the return of Shares) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of the Plan or this Agreement, the number of Shares which may be withheld with respect to the issuance, vesting or payment of the shares of Restricted Stock in order to satisfy the Holder’s federal and state income and payroll tax liabilities with respect to the issuance, vesting or payment of the shares of Restricted Stock shall be limited to the number of Shares which have a Fair Market Value on the date of withholding equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal and state tax income and payroll tax purposes that are applicable to such supplemental taxable income.

 

(ii)           The Company shall not be required to record any Shares in the name of the Holder in the books and records of the Company’s transfer agent or issue or deliver any certificate or certificates for any Shares prior to the fulfillment of all of the following conditions:   (A) the admission of the Shares to listing on all stock exchanges on which the Company’s common stock is then listed, (B) the completion of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its sole and absolute discretion, deem necessary and advisable, (C) the obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable and (D) the lapse of any such reasonable period of time following the date the Restrictions lapse as the Administrator may from time to time establish for reasons of administrative convenience.

 

ARTICLE III.

 

OTHER PROVISIONS

 

3.1          Restricted Stock Not Transferable. No shares of Restricted Stock that are subject to the Restrictions or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Holder or the Holder’s successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or

 

5

 

any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect.

 

3.2          Rights as Stockholder. Except as otherwise provided herein, upon the Grant Date (or with respect to any Additional Restricted Shares, upon the Certification Date) the Holder shall have all the rights of a stockholder with respect to the shares of Restricted Stock, subject to the Restrictions contained herein, including the right to vote the shares of Restricted Stock and the right to receive any cash or stock dividends paid to or made with respect to the shares of Restricted Stock.

 

3.3          Not a Contract of Employment. Nothing in this Agreement or in the Plan shall confer upon the Holder any right to continue to serve as an employee or other service provider of the Company or any of its Subsidiaries.

 

3.4          Governing  Law. The laws of the State of California shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.

 

3.5          Conformity to Securities Laws. The Holder acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, including without limitation Rule 16b-3 under the Exchange Act. Notwithstanding anything herein to the contrary, the Plan shall be administered, and this Award is granted, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

 

3.6          Amendment, Suspension and Termination. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board, provided, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the Award in any material way without the prior written consent of the Holder.

 

3.7          Notices. Notices required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed to the Holder at the Holder’s address shown in the Company records, and to the Company at its principal executive office.

 

3.8          Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Holder and the Holder’s heirs, executors, administrators, successors and assigns.

 

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3.9                               Clawback.   This Award and the Shares issuable thereunder shall be subject to any clawback or recoupment policy currently in effect or as may be adopted by the Company, as may be amended from time to time.

 

3.10                        Severability.  If for any reason one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument.

 

3.11                        Titles.  The titles, captions or headings of the Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

3.12                        Counterparts.  This Agreement may be executed in any number of counterparts, any of which may be executed and transmitted by facsimile (including, without limitation, transfer by .pdf), and each of which shall be deemed to be an original, but all of which together shall be deemed to be one and the same instrument.

 

By Holder’s signature and the Company’s signature below, Holder agrees to be bound by the terms and conditions of the Plan and this Agreement. Holder has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of the Plan and this Agreement. Holder hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Agreement. If Holder is married, Holder’s spouse has signed the Consent of Spouse attached to this Agreement as Exhibit A.

 

	
GUIDANCE SOFTWARE, INC.:
    	
HOLDER:
    
	
 
    	
 
    	
 
    
	
By:
    	
By:
    	
<@Electronic Signature @>
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Print   Name:
    	
Alfredo   Gomez
    	
Print   Name:
    	
<@Participant Name @>
    
	
Title:
    	
Senior   Vice President,
    	
 
    	
 
    
	
 
    	
General   Counsel and
    	
 
    	
 
    
	
 
    	
Corporate   Secretary
    	
 
    	
 
    

 

7

 

EXHIBIT A TO

 

PERFORMANCE-VESTING RESTRICTED STOCK AGREEMENT

 

CONSENT OF SPOUSE

 

I,                                                  , spouse of <@ParticipantName @>, have read and approve the foregoing Agreement and the Plan (as defined in the Agreement). In consideration of issuing to my spouse the shares of the common stock of Guidance Software, Inc. set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights and taking all actions under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares of the common stock of Guidance Software, Inc. issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement or otherwise.  I understand that this Consent of Spouse may not be altered, amended, modified or revoked other than by a writing signed by me and the Company.

 

	
Dated:                           ,              
    	
 
    
	
 
    	
Signature   of Spouse
    

 

Return To:                                            Guidance Software

Human Resources Department 

1055 E. Colorado Boulevard

Pasadena, CA 91106 

 

Or Fax To:                                            626-432-9557

 

A-1

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