8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: August 5, 2008

(Date of Earliest Event Reported)

Guidance Software, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	001-33197	95-4661210
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

215 North Marengo Avenue, Pasadena, California 91101	91101
(Address of Principal Executive Offices)	(Zip Code)

(626) 229-9191

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b) Resignation of Principal Financial Officer

On August 7, 2008, the Board of Directors of the Company announced that Frank Sansone has resigned as Chief Financial Officer of the Company, effective immediately.

(c) Appointment of Interim Principal Financial Officer and Principal Financial Officer

On August 7, 2008, the Board of Directors of the Company announced that Christopher Powell, the principal accounting officer of the Company, has been appointed Interim Chief Financial Officer of the Company, effective immediately. The Company also announced that Barry Plaga shall become Chief Financial Officer of the Company, effective October 31, 2008

Mr. Plaga, age 46, is currently Vice President of Financial Global Processes at Sun Microsystems, Inc. (NASDAQ: JAVA), where he reports to the chief financial officer, and where he oversees financial planning and forecasting, finance program management, and the finance components of Sun’s Oracle ERP project. Previously he served for six years as chief financial officer of SeeBeyond Technology Corporation (NASDAQ: SBYN), where he was responsible, in addition to his core finance and accounting role, for mergers and acquisitions, legal, information technology, human resources, administration, and facilities. While at SeeBeyond, Mr. Plaga helped lead the company through its initial public offering, secondary offering, and eventual sale to Sun for nearly $400 million. Prior to SeeBeyond, Plaga served as chief financial officer of Activision, Inc. (NASDAQ: ATVI) for two years, and as Vice President of Finance and Chief Accounting Officer at Activision for six years before that. Plaga is a certified public accountant with graduate and undergraduate degrees from the University of Southern California.

In connection with his appointment as Chief Financial Officer, the Company and Mr. Plaga entered into an Employment Agreement, pursuant to which Mr. Plaga’s annual salary shall be $325,000 and his target annual bonus shall be $100,000 in 2008 ($75,000 guaranteed) and, $200,000 for 2009. In addition, on the effective date of his appointment, Mr. Plaga will be granted (i) an option to purchase up to 50,000 shares of the Company’s common stock at a purchase price equal to the per share closing market price of the Company’s common stock as reported on NASDAQ on the date the Company’s Board of Directors meets to make the grant, which will vest and become exercisable as to 25% of the shares of Common Stock subject to such options on October 1, 2009 and on each of the following three anniversaries of the initial vesting date, in accordance with the standard Stock Option Agreement used by the Company, and (ii) up to 50,000 restricted shares of the Company’s common stock, which will vest and become exercisable as to 25% of the shares of Common Stock subject to such options on October 1, 2009 and on each of the following three anniversaries of the initial vesting date, in accordance with the standard Restricted Stock Purchase Agreement used by the Company. Mr. Plaga will also be eligible to receive severance compensation in the amount of one year’s base salary in the event that he is terminated without cause, as defined in the At Will Employment Agreement the parties will enter into on the effective date of his appointment. The Form of Offer Letter entered into between the Company and Mr. Plaga is attached hereto as Exhibit 99.2.

A Press Release announcing the appointment of Mr. Plaga as Chief Financial Officer as described above is attached hereto as Exhibit 99.1.

(e) Entrance into/Adoption of Material Compensatory Plan

In consideration for his assistance during the process of selecting a successor, Mr. Sansone and the Company have entered into a Separation Agreement, under which Mr. Sansone shall be paid Two Hundred Five Thousand Dollars ($205,000) on that day that is six months and one day following his termination from the Company. Mr. Sansone shall also receive accelerated vesting of Company stock options and restricted stock that would have otherwise vested through July 1, 2009, for which the Company expects to take a charge in the amount of $305,000. In addition, the Separation Agreement extends the stock option exercise time period from 30 to 120 days after termination and the financial impacts of that change are not considered material by the Company. A copy of Mr. Sansone’s Separation Agreement is attached hereto as Exhibit 99.3.

The information contained in Item 5.02(c) of this Current Report on Form 8-K is incorporated herein by reference.

Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits.

(c)	Exhibits
99.1	Press Release, dated August 7, 2008, issued by Guidance Software, Inc.
99.2	Form of Offer Letter between Guidance Software, Inc. and Barry Plaga, executed August 5, 2008
99.3	Separation Agreement between Guidance Software, Inc. and Frank Sansone, dated August 7, 2008

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Guidance Software, Inc.
Date: August 7, 2008	By:	/s/    Victor Limongelli
	Name:	Victor Limongelli
	Title:	Chief Executive Officer and Director

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EX-99.1

Exhibit 99.1

BARRY J. PLAGA NAMED NEXT GUIDANCE SOFTWARE, INC. CHIEF FINANCIAL OFFICER

PASADENA, Calif., August 7, 2008 – Guidance Software, Inc. (NASDAQ: GUID), the World Leader in Digital Investigations™, today announced that Barry J. Plaga will be its next Chief Financial Officer, succeeding current CFO Frank Sansone.

“Barry Plaga is the right person to help take this company to the next level,” said Victor Limongelli, Guidance Software president and chief executive officer. “Guidance Software will benefit substantially from his broad financial experience and history of performance at public software companies.”

“After a nationwide search conducted over the last few quarters, we are exceptionally pleased to have an experienced executive like Barry Plaga join the company” said Kathleen O’Neil, Lead Independent Director of the company’s Board of Directors. “The next generation of challenges and opportunities for Guidance will best be met by a CFO with clear strengths in operations and more extensive experience in leading the finance organization. Barry possesses these attributes and is the right fit for the company.”

Plaga is currently Vice President of Financial Global Processes at Sun Microsystems, Inc. (NASDAQ: JAVA), where he reports to the chief financial officer, and where he oversees financial planning and forecasting, finance program management, and the finance components of Sun’s Oracle ERP project. Previously, he served for six years as chief financial officer of SeeBeyond Technology Corporation (NASDAQ: SBYN), where he was responsible, in addition to his core finance and accounting role, for mergers and acquisitions, legal, information technology, human resources, administration, and facilities. While at SeeBeyond, he helped lead the company through its initial public offering, secondary offering, and eventual sale to Sun for nearly $400 million. Prior to SeeBeyond, Plaga served as chief financial officer of Activision, Inc. (NASDAQ: ATVI) for two years, and as Vice President of Finance and Chief Accounting Officer at Activision for six years before that. Plaga is a certified public accountant with graduate and undergraduate degrees from the University of Southern California.

“I am looking forward to working with Victor and the Guidance leadership team as we build on the company’s established strengths in the eDiscovery and computer investigations markets,” said Plaga. “I appreciate the opportunity to use my experience and talents in helping Guidance realize its potential and create increasing value for all shareholders.”

Plaga will start at the Company in late October, after concluding his term at Sun. In the meantime, the Company has named Christopher Powell, currently the company’s vice president of finance and chief accounting officer, as interim CFO, effective immediately.

About Guidance Software

Guidance Software is recognized worldwide as the industry leader in digital investigative solutions. Its EnCase® platform provides the foundation for government, corporate and law enforcement organizations to conduct thorough, network-enabled, and court-validated computer investigations of any kind, such as responding to eDiscovery requests, conducting internal investigations, responding to regulatory inquiries or performing data and compliance auditing – all while maintaining the integrity of the data. There are more than 27,000 licensed users of the EnCase technology worldwide, and thousands attend Guidance Software’s renowned training programs annually. Validated by numerous courts, corporate legal departments, government agencies and law enforcement organizations worldwide, EnCase has been honored with industry awards and recognition from eWEEK, SC Magazine, Network Computing and the Socha-Gelbmann survey. For more information about Guidance Software, visit www.guidancesoftware.com.

EX-99.2

Exhibit 99.2

[Guidance Software, Inc. Company Letterhead]

Barry J. Plaga

[address redacted]

Dear Barry:

We are pleased to offer you the position of Chief Financial Officer, based out of our Pasadena office. You will be reporting to Victor Limongelli, Chief Executive Office.

The principle terms and conditions of our offer are as follows:

Start Date	October 31, 2008
Salary	You will receive a semi-monthly base salary of $13,541.67 ($325,000.00 per year annualized). In addition to your base salary, you will be eligible for participation in the company’s Executive Bonus Incentive Plan (EBIP), which is tied to your overall performance goals. Under the EBIP your target bonus for FY ending December 31, 2008 will be $100,000, with a minimum guarantee of $75,000 for your service during the remainder of FY 2008. Your target bonus for FY 2009 will be $200,000. (performance goals are yet to be determined)
	Guidance Software, Inc. pays its employees twice each month on a semi-monthly basis. Therefore, your first paycheck will be delivered to you on November 17, 2008.
Equity	As consideration for joining the company as a key member of the Senior Executive Team, you will be eligible to receive a restricted stock grant of 50,000 shares and a stock option grant of 50,000 shares, subject to the approval of the company’s Board of Directors, as per the terms of the company’s Amended 2004 Equity Incentive Plan. The proposed grant will be submitted for approval at the first regularly scheduled Quarterly Board of Director’s Meeting following your first day of work. Since restricted stock is treated as income once it vests, please be advised that the grant (should it be approved) will have a tax liability at each vesting event. Recognizing that the stock price will fluctuate between your hire date and the four separate dates of vesting, you should also be advised that your tax liability will be directly related to the closing stock price on the date of the vesting event. You may sell vested shares to cover your tax liability during any open window allowed for your insider designation.
Severance	Notwithstanding the At-Will nature of your employment with Guidance Software, Inc., in the event that your employment with the Company is terminated by the Company without cause, subject to your signature on a separation agreement, the Company will pay a lump sum severance totaling (1) one year at your prevailing base salary rate.
Benefits	You will become eligible for medical and dental health benefits on the first of the month following 30 days of employment. You will receive detailed information within two weeks of employment as to specific plans, costs and timelines for enrollment.
401(k)	As a full time employee with Guidance Software, Inc., you will become eligible to participate in the company matched 401(k) Savings Plan on the 1st of the Qtr. following the completion of three months of service with the Company. However, you are eligible to immediately rollover funds from your current eligible plan.
Vacation	As a member of the Senior Executive Team you will earn 15 days of vacation benefit each year of service to the company.

Holiday	There are nine paid holidays, unless Christmas Eve falls on a weekday in which case there are ten. You will also have one floating holiday per year.
Trial Service Period	Your performance will be evaluated after six months.

The terms and conditions of this offer are contingent upon you passing a background check, including employment references.

This offer is also contingent upon you completing an Employment Eligibility Verification Form and providing evidence of your identity and employment eligibility on the date that you are to begin work.

Additionally, you will be required to sign an “At-Will” Employment Agreement Form. Neither this letter nor the at-will employment agreement should be construed as an employment contract. Furthermore, Guidance Software, Inc. reserves the right to revoke this offer of employment at any time, for any or no reason.

If you have any questions regarding this offer, please don’t hesitate to call. We look forward to you joining the Guidance Software Team.

Sincerely,

Sandy Gyenes

VP, Human Resources

cc: Victor Limongelli

If you understand and agree with the terms of our offer as set out above, please indicate acceptance with your signature below.

/s/    Barry Plaga
Barry J. Plaga	Date:	August 5, 2008

EX-99.3

Exhibit 99.3

Separation Agreement and Release of Claims

This Separation Agreement and Release of Claims (“Agreement”) is made by and between Frank Sansone (“Mr. Sansone”), an individual, and Guidance Software Inc, (“Guidance” or “Company”) effective on the Effective Date (as defined below).

WHEREAS, GUIDANCE and Mr. Sansone entered into that certain Employment Agreement, dated December 16, 2002 (“Employment Agreement”) under which Guidance offered and Mr. Sansone accepted, employment with Guidance; and

WHEREAS, Mr. Sansone and Guidance have agreed to terminate his employment, effective August 7, 2008 (“Termination Date”); and,

WHEREAS, GUIDANCE desires to provide Mr. Sansone with certain separation benefits to assist him in the transition resulting from his termination; and,

WHEREAS, Mr. Sansone agrees, in exchange for such separation benefits, to waive and release any and all claims that he may have against GUIDANCE; and,

NOW THEREFORE, in consideration of the mutual promises and releases contained herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Separation Benefits and Terms. Upon the execution of this Agreement (provided this Agreement is executed by Mr. Sansone and returned to the Vice President of Human Resources for GUIDANCE by 5:00 p.m. (PST) August 7, 2008, the parties agree as follows:

a. Final Paycheck and Accrued Vacation. Mr. Sansone’s last day of work will be as August 7, 2008, of the Termination Date. Upon his last day of work, GUIDANCE will pay Mr. Sansone any accrued salary and accrued but unused vacation pay through and including the Termination Date, less all customary and routine withholdings;

b. Subject to section 2 below, on the first business day that occurs immediately following the date which is six months after the date of Mr. Sansone’s “separation from service” from Guidance (within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”) and its corresponding regulations) (a “Separation from Service”), Guidance shall pay Employee a lump-sum cash payment equal to Two Hundred Five Thousand Dollars ($205,000), less all customary and routine withholdings. The payment to Employee will be paid in US currency, via check or wire transfer;

c. Stock Options. Until the Termination Date, Employee shall continue, without interruption, to enjoy the benefits as an Employee, for Stock Options previously granted to Employee under the First Amended and Restated 2004 Equity Incentive Plan (“Equity Plan”). Specifically, provided he remains a full-time employee of Employer until August 7, 2008, Employee shall realize the vesting of unvested stock options (the “Vested Options”) and restricted shares representing 52,251 and 1,969 shares, respectively, of Guidance Common Stock and previously scheduled to vest through July 1, 2009 under the terms of the Equity Plan. Furthermore, notwithstanding anything to the contrary in the Equity Plan, Employee shall have 120 days from Termination Date to exercise all Vested Options and restricted shares. Company and Employee agree that this Paragraph 1-c shall have the effect of amending and modifying the Equity Plan Stock Option Grant Letter Agreement(s) in place between the parties and related to the vesting and termination of said grants.

d. Other than as expressly stated in Sections 1.c. above, all other unvested stock options of Mr. Sansone shall expire as of the Termination Date.

e. Following the termination of his health benefits as of 12:01am on that day which is thirty (30) days after the Termination Date, Mr. Sansone shall be entitled to elect to continue coverage under the GUIDANCE health plan, in accordance with the health care continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”).

f. Finally, upon the reconciliation of his business related expenses and supporting documentation, Mr. Sansone will be reimbursed for such expenses according to the Guidance Business Travel Policy.

2. Release. Mr. Sansone, on behalf of himself, his descendants, ancestors, dependents, heirs, executors, administrators, assigns, and successors, and each of them, hereby covenants not to sue and fully releases, acquits, and discharges GUIDANCE, and its subsidiaries and affiliates, past, present, future and each of them, as well as its owners, trustees, directors, officers, agents, servants, employees, stockholders, representatives, assigns, and successors, and each of them (collectively referred to as “GUIDANCE Releasees”) with respect to and from any and all claims, wages, demands, assistance, support, rights, liens, agreements, contracts, covenants, actions, suits, rights to appeal, entitlements and notices, causes of action, obligations, debts, costs, expenses, interests, attorneys’ fees, contributions, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which he has at any time heretofore owned or held against said GUIDANCE Releasees, including, without limitation, those arising under the California Human Rights Law, the California Workers’ Compensation Law, and the California Labor Law (other than for unemployment benefits) and those arising out of or in any way connected with his

employment relationship with GUIDANCE or his termination of employment or any other transactions, occurrences, acts or omissions or any loss, damage or injury whatever, known or unknown, suspected or unsuspected, resulting from any of them, committed or omitted prior to the date of this Agreement, and including, without limitation, claims for breach of contract, libel, slander, wrongful discharge, intentional infliction of emotional harm, or other tort, or discrimination or harassment based upon any federal, state, or municipal statute or local ordinance relating to discrimination in employment. Mr. Sansone acknowledges and agrees that his right to receive the amounts set forth in Section 1.b. above are subject to and conditioned upon his execution and non-revocation of this release.

3. Code Section 409A. Certain amounts payable under this Agreement may constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code, the payment of which is intended to comply with Section 409A. To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder. Notwithstanding anything to the contrary in this Agreement, no payment or benefits, including without limitation the amounts payable under Section 1 hereof, shall be paid to Mr. Sansone during the 6-month period following his Separation from Service if Guidance determines that paying such amounts at the time or times indicated in this Agreement would be 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 6-month period, Guidance shall pay Mr. Sansone a lump-sum amount equal to the cumulative amount that would have otherwise been payable to him during such period.

4. Waiver of Certain Employment Agreement Rights. Mr. Sansone and Guidance agree that as part of the consideration for the terms of this Agreement, Mr. Sansone expressly irrevocably waives any right to any cash, severance payment or other benefit upon termination from Guidance, as contemplated by any other written or oral agreement he may have with Guidance and releases Guidance from any obligation to make any payments or provide any consideration, other than as expressly stated herein, to Mr. Sansone after the Termination Date.

5. Non-Disparagement and Non Solicitation. Mr. Sansone and Guidance agree that they will refrain from making any disparaging or defamatory remarks or comments to any third party, whether written or oral, about each other, including any comments by or about Guidance’s directors, officers, employees, products or financial condition. To the extent enforceable under California law, Employee agrees that for a period of twenty-four (24) months after the Termination Date, Employee shall not solicit for hire any Company employee who was related to a financial or business operation that Mr. Sansone managed at the time of his termination from Company.

6. Confidentiality. Mr. Sansone agrees that the terms and conditions of this Agreement shall be strictly confidential, and may not be disclosed to anyone other than immediate family and legal counsel so long as they have agreed to the confidentiality of this agreement. In addition, Mr. Sansone agrees to abide by the continuing confidentiality provisions contained in his written at-will Employment Agreement and the continuing obligations of the Company’s Insider Trading Policy, copies of which are attached hereto as Exhibit A and B and incorporated herein by reference. For the avoidance of doubt, all non-public financial aspects of Guidance are considered Confidential Information under Mr. Sansone’s Employment Agreement and this Agreement.

7. Waiver of Unknown or Future Claims. Mr. Sansone has read Section 1542 of the Civil Code of the State of California, which provides as follows:

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

Mr. Sansone understands that because this Agreement is governed by California law, he has the right not to release existing claims of which he, is not now aware, unless he voluntarily choose to waive this right. Having been so apprised, Mr. Sansone nevertheless hereby voluntarily elects to and do waive the rights described above, and elect to assume all risks for claims that now exist in his favor, or in the favor of Guidance, as applicable, known or unknown.

8. Arbitration. Any and all controversies arising out of or relating to the validity, interpretation, enforceability, or performance of this Agreement will be solely and finally settled by means of binding arbitration. Any arbitration shall be conducted in accordance with the then-current Employment Dispute Resolution Rules of the American Arbitration Association. Prior to the commencement of any arbitration, the parties shall enter into a written stipulated Protective Order that all matters pertaining to the arbitration shall be considered Confidential Information, which shall include but not be limited to, the Orders, transcripts, evidence, discovery process and substantive discussions of the arbitration. The arbitration will be final, conclusive and binding upon the parties. GUIDANCE will pay the AAA case management and administrative fees, the court reporter fees for the arbitration hearing and the arbitrator’s fee and expenses. Mr. Sansone will not be required to pay any fees which would exceed the amount of fees she would be required to pay if he had pursued his action in court. The arbitrator shall allow the parties to conduct adequate discovery to pursue any claims. The parties have the right to be represented by an attorney of their choice. The decision or award of the arbitrator shall be in writing and will include a statement of the reasons for the award and the findings and conclusions on which the award is based. The arbitrator’s power in respect to the issuance of an award under this provision shall be limited to the issuance of such an award consistent with and according to applicable California law.

9. Effectiveness of Agreement. This Agreement is effective upon the date that is seven (7) days after Mr. Sansone has signed and returned this Agreement to GUIDANCE (the “Effective Date”).

10. Entire Agreement. This Agreement, including the Exhibits hereto, constitutes and contains the entire agreement and understanding concerning Mr. Sansone’s termination of employment, and the other subject matters addressed herein between the parties, and supersedes and replaces all prior negotiations, the Employment Agreement and all prior agreements proposed or otherwise, whether written or oral, concerning the subject matter hereof.

11. Governing Law. This Agreement shall be governed by and subject to the laws of the State of California.

12. Severability. In the event that one or more of the provisions of this Agreement shall for any reason be held to be illegal or unenforceable, the Agreement shall be revised only to the extent necessary to make such provision(s) legal and enforceable.

13. Taxes. Company makes no warranty with respect to the tax or other consequences, if any, of the above-referenced payment to Mr. Sansone. Mr. Sansone shall be responsible for any and all adverse tax or other consequences, if any, arising out of said payment, and shall hold Company harmless from any such tax or other consequences.

14. Time to Consider and Revoke Agreement. Mr. Sansone acknowledges that the Company has advised him to take this Agreement home and carefully consider all of its provisions before signing it. Mr. Sansone further acknowledges that he was given a period of not less than twenty-one (21) days to consider this “General Agreement and Release of Claims” before signing it. Mr. Sansone acknowledges and understands that the Company has advised and does advise him to consult with legal counsel before deciding to execute or not to execute this Agreement. Mr. Sansone represents, acknowledges and agrees that he has fully discussed all aspects of this Agreement with his attorneys to the full extent he so desired; that he has carefully read and fully understands all of the provisions of this Agreement; that he has taken as much time as he needs for full consideration of this Agreement; that he fully understands that the Agreement releases all of his claims, both known and unknown, against each and all of the GUIDANCE Releasees; that he is voluntarily entering into this Agreement; and that he has the capacity to enter into this Agreement.

Mr. Sansone understands that, within seven (7) days of the date of signing this Agreement, he has the right to revoke or cancel this Agreement. Any such revocation or cancellation must be made in a signed writing delivered to the Company within the seven (7) day revocation period. Mr. Sansone understands that if he chooses to revoke this Agreement within seven (7) days after he signs it, he will not receive any of the benefits described in Sections 1.b and 1.c and the Agreement will have no effect. Mr. Sansone understands that the Agreement will not become effective until seven (7) days after he signs it, and only then if he does not revoke it.

The undersigned representative of GUIDANCE has been authorized to sign this agreement on behalf of Guidance Software, Inc.

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

Before signing my name to this Agreement, I, Frank Sansone, state that:

• I have read it,

• I understand it,

• I know that I am giving up important rights,

• I am aware of my right to consult an attorney before signing it, and I have signed it knowingly and voluntarily.

	Guidance Software, Inc.
/s/    Frank Sansone	By:	/s/    Stephen Richards
Frank Sansone	Name:	Stephen Richards
	Title:	Member, Board of Directors
August 7, 2008	Date:	August 7, 2008
Date

Exhibit A: At Will Employment Agreement

Exhibit B: Guidance Software Insider Trading Policy