Exhibit 10.1

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March 30, 2020

 

Via email

Eric Salzman

 

Dear Eric:

 

Safeguard Scientifics, Inc. ("Safeguard" or the "Company") is pleased to offer
you a position as Chief Restructuring Officer at Safeguard on the terms and
subject to the conditions set forth in this letter. It would be intended that
you would join the Company as the Chief Restructuring Officer, reporting to the
Executive Chairman of Safeguard's Board of Directors ("Board"), effective as of
April 1, 2020 (the "Commencement Date") for a six-month term ending on October I
, 2020 (the "Initial Term"); provided, that the Initial Term shall automatically
extend for up to three consecutive six-month terms (each an "Extended Term")
through April, 1, 2022 unless either you or Safeguard provide written notice to
the other party at least thirty (30) days prior to any such six-month period
(the Initial Term plus any Extended Term shall constitute the "Term" herein).
You will be required to dedicate substantially all of your professional time and
efforts to your position with Safeguard. At the end of the Term, your employment
may be extended upon mutual agreement.

 

This letter agreement constitutes the entire agreement between you and Safeguard
and supersedes the prior consulting agreement dated November 21, 2019, by and
between Safeguard and you as managing member of SamiHaan Capital Partners LLC
("Prior Agreement"), other than with respect to the confidentiality and
indemnification provisions set forth in the Prior Agreement and the terms of the
related confidentiality agreement dated October 2, 2019.

 

Salary. The annual base salary rate associated with this position is $540,000
(i.e., $45,000 per month) and will be paid on a bi-weekly basis. During the
Initial Term, you will not be eligible to participate in any annual incentive
programs or plans of Safeguard.

 

Equity Grants. Within ten days of your Commencement Date, you will receive a
fully vested stock grant for 8,000 shares of common stock of Safeguard under the
2014 Equity Compensation Plan (the "Plan"). At the same time, you will also
receive a restricted stock unit grant representing a right to receive 20,000
shares of Safeguard's common stock, which will vest and become payable ratably
over the six-month Initial Term, in equal monthly installments following your
Commencement Date, subject to your continued employment or service to Safeguard
(the "Initial Term RSU Grant"). You will also be eligible for a restricted stock
unit grant representing a right to receive an additional 20,000 shares of
Safeguard's common stock for each Extended Term, if applicable, which will vest
and become payable over each six-month Extended Term, in equal monthly
installments, subject to your continued employment or service to Safeguard (the
"Extended Term RSU Grant"). Any restricted stock units granted to you will
include dividend equivalent rights which will accrue and become payable to you
when the underlying restricted stock units are paid. The specific terms and
conditions of the stock unit will be set forth further in the award agreement
evidencing the stock unit. In addition, at the end of the Initial Term and any
Extended Term, you will be eligible to receive 20,000 full-vested shares of
common stock of Safeguard in the sole discretion of the Board based on your
performance for the Initial Term or any Extended Term (the "Discretionary Stock
Grant") issued no later than ten days after the end of the Initial Term or any
Extended Term. The Discretionary Stock Grant will be granted under the Plan.

 

Expense Reimbursement. You will be entitled to reimbursement for all reasonable
and necessary travel and business expenses in a timely manner according to the
Company policy.

 

Benefits. You will also be eligible to participate in Safeguard's health,
dental, vision, disability, 401(k), and other benefit plans including fringe
benefits generally available to Safeguard executive employees from time to time.
And, you will be entitled to accrue vacation at the annual rate of three weeks
of vacation per calendar year. The first year's vacation will be pro-rated based
on your Commencement Date.

 

 

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Severance Benefits. In the event Safeguard terminates your employment without
"Cause" (as defined below) or resign for Good Reason (as defined below),
Safeguard will provide you the following benefits that will be the only
severance benefits or other payments in respect of your employment with
Safeguard to which you will be entitled. Without limiting the generality of the
foregoing, these benefits are in respect of all salary and other rights that you
may have against Safeguard or its affiliates. For the avoidance of doubt, notice
of non-renewal of any six-month Extended Term prior to the end of or following
the Initial Term will not constitute a termination of your employment without
Cause or resignation for Good Reason.

 

If you are terminated without Cause or resign for Good Reason:

 

 

•

You will be paid an amount equivalent to any unpaid portion of your base salary
as of the date of termination which would have been payable for the remainder of
the applicable six-month Initial Term or Extended Term, less applicable tax
deductions and withholdings. For example, if you were terminated without Cause
or resigned for Good Reason at the end of the second month of a six-month
Extended Term, you would be paid four months of base salary, or $180,000. Th e
severance amount will be paid in a lump sum within I 0 days of the termination
date.

 

•

You will immediately vest in your Initial Term RSU Grant and any Extended Term
RSU Grant that has been awarded prior to your termination date and was not
previously vested and paid.

 

•

You will receive a fully-vested stock grant, representing a portion of the
Discretionary Stock Grant, equal to a number of shares of Safeguard common stock
equal to 20,000 shares, multiplied by a fraction equal to (x) the number of
calendar months you were employed during the Initial Term or any applicable
Extended Term, over (y) six months. For example, if you were terminated without
Cause or resigned for Good Reason in the

4th month of an Extended Term, you would receive a fully-vested stock grant
equal to 13,333 shares of

Safeguard common stock.

 

All severance-related compensation and benefits described above will be
contingent on your execution of a release, in form acceptable to Safeguard in
its sole discretion, which is not subsequently rescinded, of all claims against
Safeguard pursuant to Safeguard's standard employee form. You will have 21 days
following your termination of employment in which to consider the release
although you may execute it sooner.

 

In this letter agreement, the term "Cause" means (a) your willful failure to
abide by the reasonable work-related instructions and requests of the Executive
Chairman of the Board of Directors during your employment and/or your failure to
adhere to any written Safeguard policy in effect from time to time if you have
been given a reasonable opportunity to comply with such policy or cure your
failure to comply (which reasonable opportunity must be granted during the
10-day period preceding termination of this letter agreement); (b) your
appropriation (or attempted appropriation) of a material business opportunity of
Safeguard, including attempting to secure or securing any personal profit in
connection with any transaction entered into on behalf of Safeguard; (c) your
misappropriation (or attempted misappropriation) of any of Safeguard's funds or
property; or (d) your conviction of, indictment for (or its procedural
equivalent), or your entering of a guilty plea or plea of no contest with
respect to, a felony, the equivalent thereof, or any other crime with respect to
which imprisonment is a possible punishment.

 

In this letter agreement, the term "Good Reason" shall mean the occurrence of
one or more of the following, without your consent: (i) material diminution of
your authority, duties or responsibilities; (ii) a material diminution in your
base salary; or (iii) any action or inaction that constitutes a material breach
by Safeguard of a material provision of this letter agreement; provided, that
you must provide written notice of termination for Good Reason to Safeguard
within 30 days after the event constituting Good Reason first occurs, Safeguard
shall have a period of30 days in which it may correct the act or failure to act
that constitutes the grounds for Good Reason and if Safeguard does not correct
the act or failure to act, you must terminate your employment for Good Reason
within 30 days after the end of the cure period, in order for the termination to
be considered a Good Reason termination.

 

Terms of Employment, Agreements. Subject to the terms of this letter agreement,
you will be an employee-at-will and subject to the arrangements described in
Safeguard's employee handbook as modified from time to time. Ln addition, this
offer is subject to your agreement to comply with various covenants designed to
protect Safeguard's confidential information and employee and customer
relationships. These provisions are contained in a Confidentiality &
Intellectual Property Assignment Agreement, a copy of which is attached. We will
need to receive a signed copy of the agreement prior to your start date.

 

Indemnification and D&O Insurance. Safeguard will indemnify you and hold you
harmless in connection with your duties to the fullest extent provided by
Safeguard's bylaws and applicable law and will cover you under directors' and
officers' liability insurance in accordance with its terms both during and,
while potential liability exists, after the Term in the same amount and to the
same extent as the Company covers its other officers and directors.

 

 

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Miscellaneous. This letter agreement and the other agreements referred to herein
contain the entire agreement between the parties hereto and supersede any and
all prior agreements and understandings concerning your employment by Safeguard.
This letter agreement shall not be altered or otherwise amended, except pursuant
to an instrument in writing signed by each of the parties hereto. In the event
that any provision of this letter agreement is determined to be partially or
wholly invalid, illegal or unenforceable in any jurisdiction, then such
provision shall, as to such jurisdiction, be modified or restricted to the
extent necessary to make such provision valid, binding and enforceable, or if
such provision cannot be modified or restricted, then such provision shall, as
to such jurisdiction, be deemed to be excised from this letter agreement. This
letter agreement will bind the heirs, personal representatives, successors and
assigns of both you and Safeguard, and inure to the benefit of both you and
Safeguard, and to your heirs, successors and assigns, except that the duties and
responsibilities of you are of a personal nature and shall not be assignable or
delegable in whole or in part by you. This letter agreement may be executed in
any number of counterparts, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
agreement. This letter agreement shall be governed by and construed and enforced
in accordance with the laws of the Commonwealth of Pennsylvania applicable to
contracts made and performed wholly therein without regard to rules governing
conflicts of law.

 

Compliance with Section 409A of the Code.

 

Compliance. Th is letter agreement will be interpreted to avoid any penalty
sanctions under Section 409A of the Code. If any payment or benefit cannot be
provided or made at the time specified herein without incurring sanctions under
Section 409A, then such benefit or payment will be provided in full at the
earliest time thereafter when such sanctions will not be imposed. For purposes
of Section 409A of the Code, all payments to be made upon a termination of
employment under this letter agreement may only be made upon a "separation from
service" within the meaning of such term under Section 409A of the Code, each
payment made under this letter agreement will be treated as a separate payment
and the right to a series of installment payments under this letter agreement is
to be treated as a right to a series of separate payments. In no event will you,
directly or indirectly, designate the calendar year of any payments to be made
to you under this letter agreement. All reimbursements and in-kind benefits
provided under this letter agreement will be made or provided in accordance with
the requirements of Section 409A, including, where applicable, the requirement
that (i) any reimbursement is for expenses incurred during your lifetime (or
during a shorter period of time specified in this letter agreement), (ii) the
amount of expenses eligible for reimbursement, or in-kind benefits provided,
during a calendar year may not affect the expenses eligible for reimbursement,
or in-kind benefits to be provided, in any other calendar year, (iii) the
reimbursement of an eligible expense will be made on or before the last d ay of
the calendar year following the year in which the expense is incurred, and (iv)
the right to reimbursement or in-kind benefits is not subject to liquidation or
exchange for another benefit.

 

Payment Delay. Notwithstanding any provision in this letter agreement to the
contrary, if at the time of your separation from service with Safeguard,
Safeguard has securities which are publicly traded on an established securities
market and you are a "specified employee" (as defined in Section 409A of the
Code) and it is necessary to postpone the commencement of any severance payments
otherwise payable pursuant to this letter agreement as a result of such
termination of employment to prevent any accelerated or additional tax under
Section 409A of the Code, then Safeguard will postpone the commencement of the
payment of any such payments or benefits hereunder (without any reduction in
such payments or benefits ultimately paid or provided to you) that are not
otherwise paid within the short­ term deferral exception under Section 409A of
the Code and are in excess of the lesser of two times your then-annual
compensation or (ii) the limit on compensation then set forth in Section
401(a)(17) of the code, until the first payroll date that occurs after the date
that is six months following the your "separation from service" with Safeguard
(as defined under Section 409A of the Code). If any payments are postponed due
to such requirements, such postponed amounts will be paid in a lump sum to you
on the first payroll date that occurs after the date that is six months
following your "separation from service" with Safeguard. If you die during the
postponement period prior to the payment of the postponed amount, the amounts
withheld on account of Section 409A of the Code will be paid to the personal
representative of your estate within 60 days after the date of your death.

 

This offer is contingent upon the results of a background check. After you have
signed and returned this offer letter, you will be asked to complete and return
an Investigation Authorization, Waiver & Release form, which explains the
purpose and the nature of this background check.

 

 

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We trust you will enjoy the challenges and opportunities of working in a dynamic
environment, and look forward to a mutually rewarding association. If these
terms are agreeable, please signify your acceptance below and return one copy to
me along with the executed Confidentiality & Intellectual Property Assignment
Agreement and background check forms. If there are any other questions, please
do not hesitate to contact me.

 

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Date

 

 

 

 

 

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CONFIDENTIALITY & INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT

 

In consideration and as a condition of my employment by the Company, I hereby
agree with the Company as follows:

 

1.    Definitions. The term "Company" shall include Safeguard Scientifics, Inc.,
its subsidiaries and affiliates. The Company shall have the right to assign this
Agreement to its successors and assigns, and all covenants and agreements
hereunder shall inure to the benefit of and be enforceable by said successors or
assigns. The term "Partner Company" shall mean any person or entity with which,
at the time of determination, the Company has made, or is actively considering
making, (i) an equity or debt financing, issuance, purchase, exchange or
transfer arrangement, (ii) an acquisition, sale, exchange or transfer of any
material assets, or (iii) a strategic alliance or exclusive license of
intellectual property (each of the foregoing, a "Safeguard Transaction").

 

2.     Confidentiality; Non-Disclosure and Mutual Non-Disparagement. l will not
at any time, whether during or after the termination of my employment, reveal to
any person or entity any of the trade secrets or confidential information of the
Company or of any third party which the Company is under an obligation to keep
confidential (including but not limited to trade secrets or confidential
information respecting inventions, products, designs, methods, know-how,
techniques, systems, processes, software programs, works of authorship,
customer  lists, databases, projects,  plans, proposals, financial information,
financing arrangements,  sales terms and business methods), except as may be
required in the ordinary course of performing my duties as an employee of the
Company, and I shall keep secret all matters entrusted to me and shall not use
or attempt to use any such information in any manner which may injure or cause
loss or may be calculated to injure or cause loss whether directly or indirectly
to the Company.

 

The above restrictions shall not apply to information that l can demonstrate by
competent evidence: (i) was or comes into the public domain through no fault of
my own; (ii) was received from a third party outside of the Company without a
breach of any confidentiality obligation; (iii) was approved for release by
written authorization of the Company; or (iv) may be required by law or an order
of any court, agency or proceeding to be disclosed; provided, I shall provide
the Company notice of any such required disclosure once l have knowledge of it
and will help the Company to the extent reasonable to obtain an appropriate
protective order.

 

Further, I agree that during my employment I shall not take, use or perm it to
be used any notes, memoranda, reports, lists, records, drawings, sketches,
specifications, software programs, data, documentation or other materials of any
nature relating to any matter within the scope of the business of the Company or
a Partner Company or concerning any of its dealings or affairs otherwise than
for the benefit of the Company or as applicable, a Partner Company. I further
agree that T shall not, after the termination of my employment, use or permit to
be used any such notes, memoranda, reports, lists, records, drawings, sketches,
specifications, software programs, data, documentation or other materials, it
being agreed that all of the foregoing shall be and remain the sole and
exclusive property of the Company and that immediately upon the termination of
my employment I shall deliver all of the foregoing, and all copies thereof, to
the Company's Legal Department at the Company's main office.

 

I agree not to disparage the Company or a Partner Company or their respective
officers, directors, investors, employees, and affiliates or make any public
statement reflecting negatively on the Company or a Partner Company or their
respective officers, directors, investors, employees, and affiliates, including
(without limitation) any matters relating to the operation or management of the
Company.  I understand that the Company shall instruct and take all reasonable
steps to cause its officers and members of the Board not to disparage me on any
matters relating to the my services to the Company, business, professional or
personal reputation or standing, irrespective of the truthfulness or falsity of
such statement.

 

3.     Ownership of Inventions and Ideas. I acknowledge that the Company shall
be the sole owner of all the results and proceeds of my service hereunder,
including but not limited to, all patents, patent applications, patent rights,
formulas, models, data, algorithms, copy rights, inventions, developments,
discoveries, other improvements, data, documentation, drawings, charts, and
other written, audio and/or visual materials relating to equipment, methods,
products, processes, or programs in connection with or useful to the business of
the Company or a Partner Company (collectively, the "Developments") which I, by
myself or in conjunction with any other person, may conceive, make, acquire,
acquire knowledge of, develop or create while performing my role or using
Company assets or resources during the term of my employment hereunder, free and
clear of any claims by me (or any successor or assignee of mine) of any kind or
character whatsoever other than my right to the salary I receive from time to
time from the Company. l acknowledge that all copyrightable Developments shall
be considered works made for hire under the Federal Copyright Act. I hereby
assign and transfer my right, title and interest in and to all such
Developments, and agree that I shall, at the request of the Company, execute or
cooperate with the Company in any patent applications, execute such assignments,
certificates or other instruments, and do any and all other acts, as the Company
from time to time reasonably deems necessary or desirable to evidence,
establish, maintain, perfect, protect, enforce or defend the Company's right,
title and interest in or to any such

 

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Developments. The restriction of this Section 3 do not apply to intellectual
property created prior to my employment with Company or created while performing
teaching, advisory, and/or board duties for organizations outside of Company
which were previously disclosed to Company in writing.

 

4.     Non-Solicitation. While J am employed at the Company and for a period of
one year after termination of my employment (for any reason, whether voluntary
or involuntarily), I agree that I will not:

 

(i)  directly or indirectly solicit, entice or induce any Partner Company or
prospective Partner Company with which the Company was having discussions at any
time within the preceding six months to (a) commence or participate in
discussions or activities regarding, or to enter into, a Safeguard Transaction
with any other person or entity, (b) cease or diminish any such discussions or
activities with the Company or any Partner Company or (c) otherwise cease or
diminish its business with the Company, and I shall not approach any such person
or entity for such purpose or authorize or knowingly approve the taking of such
actions by any other person or entity; or

 

(ii)  directly or indirectly (a) solicit, recruit or hire any employee or
partner of the Company or any Partner Company to work for a person or entity
other than the Company or the respective Partner Company, or (b) engage in any
activity that would cause any employee or partner of the Company or any Partner
Company to violate any duty to or agreement with the Company or a Partner
Company.

 

5.     Prior Restrictive Covenants. I represent that I have delivered to the
Company copies of any agreements or arrangements which may restrict or prohibit
the performance by me of any of my duties or responsibilities. I agree that I
shall comply with any such agreements or arrangements and shall consult with the
General Counsel of the Company in the event that I believe that such compliance
in any way is a constraint to the aggressive performance of my duties or
responsibilities. Without limiting the generality of the foregoing, I agree that
I will not bring to any Company or Partner Company facility any information or
materials with me which are subject to confidentiality obligations owed to my
prior employers or others, nor shall I use any such confidential information or
materials in performing my duties for the Company or any Partner Company. I
acknowledge that my breach of this Section 5 would materially harm the Company,
and that in such event the Company may terminate me for Cause.

 

6.     Reasonable Restrictions. I agree that any breach of this Agreement by me
will cause irreparable damage to the Company and that in the event of such
breach the Company shall have, in addition to any and all remedies of law, the
right to an injunction, specific performance or other equitable relief to
prevent the violation of my obligations hereunder. I hereby acknowledge that the
types and periods of restriction imposed in the provisions of this Agreement are
fair and reasonable and are reasonably required for the protection of the
Company and the goodwill associated with the business of the Company. I
represent that my experience and capabilities are such that the restrictions
contained herein will not prevent me from obtaining employment or otherwise
earning a living at the same general economic benefit as reasonably required by
me. I further agree that each provision herein shall be treated as a separate
and independent clause, and the unenforceability of any one clause shall in no
way impair the enforceability of any of the other clauses herein. Moreover, if
one or more of the provisions contained in this Agreement shall for any reason
be held to be excessively broad as to scope, activity or subject so as to be
unenforceable at Jaw, such provision or provisions shall be construed by the
appropriate judicial body by limiting and reducing it or them, so as to be
enforceable to the maximum extent compatible with the applicable law as it shall
then appear.

 

7.     Resignation as Director and Officer. Upon termination of employment with
the Company, l shall resign from all board and officer positions I hold with the
Company and all Partner Companies (and all affiliates and subsidiaries of
Partner Companies). In this regard, l agree upon the Company's request from time
to time to sign and deliver to the Company resignation letters acceptable to the
Company.

 

8.     Withholding. I acknowledge and agree that the Company is entitled to
withhold applicable taxes and other legally required deductions from all
payments and other benefits and obligations of the Company to me.

 

9.     General I understand that this Agreement does not create an obligation on
the Company or any other person or entity to continue my employment or to
exploit any Development Any waiver by the Company of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of such provision or any other provision hereof. No term or
condition set forth in this letter may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by me
and an authorized executive officer of the Company. My obligations under this
Agreement shall survive the termination of my employment regardless of the
manner of such termination  and shall be binding upon my heirs, executors,
administrators and legal representatives. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania.
Any controversy or claim arising out of or relating to this agreement, or the
breach thereof, will be settled by arbitration in Philadelphia, Pennsylvania, in
accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association,

 

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using one arbitrator, and judgment upon the award rendered by the arbitrator may
be entered in any court of competent jurisdiction. In any suit, action or
procedure by either party to enforce any provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable costs, expenses and
attorney's fees from the other party.

 

l N WITNESS WHEREOF, the undersigned has executed this Agreement as a sealed
document as of this 1>_day of , 2020.

 

 

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