EXHIBIT 10.4

(SAFEGUARD SCIENTIFICS, INC. LOGO) [w68353w6835300.gif]

Safeguard Scientifics, Inc., a Pennsylvania corporation (the “Company”), hereby
grants to the grantee named below (“Grantee”) an option (this “Option”) to
purchase the total number of shares shown below of Common Stock of the Company
(the “Shares”) at the exercise price per share set forth below, subject to all
of the terms and conditions on the reverse side of this Stock Option Grant
Certificate and the _____ Equity Compensation Plan (the “Plan”). Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
ascribed to them in the Plan. The terms and conditions set forth on the reverse
side hereof and the terms and conditions of the Plan are incorporated herein by
reference. This Stock Option Grant Certificate shall constitute the “Agreement”
for this Option as such term is used in the Plan.

     
Grant Date:
                     
 
   
Type of Option:
  Nonqualified Stock Option
 
   
Shares Subject to Option:
                     
 
   
Exercise Price Per Share:
  $                   
 
   
Term of Option:
                     years

Shares subject to issuance under this Option will vest as follows:
_________________; provided, however, if Grantee’s employment terminates prior
to the date this option would otherwise become fully vested as a result of (i)
death, (ii) permanent disability, (iii) retirement on or after his or her 65th
birthday, (iv) upon the occurrence of a Reorganization or Change of Control (as
defined in the Plan), or (v) in the event Grantee’s employment is terminated by
the Company without cause or Grantee terminates his employment with good reason
as set forth in the Grantee’s letter agreement with the Company dated
____________, this option will be deemed fully vested as of the date of such
termination.

Grantee hereby acknowledges receipt of a copy of the Plan, represents that
Grantee has read the Plan and understands the terms and provisions of the Plan,
and accepts this Option subject to all the terms and conditions of the Plan and
this Stock Option Grant Certificate. Grantee acknowledges that the grant and
exercise of this Option, and the sale of Shares obtained through the exercise of
this Option, may have tax implications that could result in adverse tax
consequences to the Grantee and that Grantee is not relying on the Company for
any tax, financial or legal advice and will consult a tax adviser prior to such
exercise or disposition.

This Option is designated an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”). If the aggregate fair
market value of the stock on the date of the grant with respect to which
incentive stock options are exercisable for the first time by the Grantee during
any calendar year, under the Plan or any other stock option plan of the Company
or a parent or subsidiary, exceeds $100,000, then the Option, as to the excess,
shall be treated as a nonqualified stock option that does not meet the
requirements of Section 422. If and to the extent that the Option fails to
qualify as an incentive stock option under the Code, the Option shall remain
outstanding according to its terms as a nonqualified stock option.

By accepting an incentive stock option under the Plan, Grantee agrees to notify
the Company in writing immediately after he or she makes a disqualifying
disposition (as described in the Code and regulations thereunder) of any stock
acquired pursuant to the exercise of incentive stock options granted under the
Plan. A disqualifying disposition is generally any disposition occurring within
two years of the date the incentive stock option was granted or within one year
of the date the incentive stock option was exercised, whichever period ends
later.

In witness whereof, this Stock Option Grant Certificate has been executed by the
Company by a duly authorized officer as of the date specified hereon.

Safeguard Scientifics, Inc.

By:                                                          

                                                         

 

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1. Option Expiration. The Option shall automatically terminate upon the
happening of the first of the following events:

     (a) the expiration of the 90-day period after the Grantee ceases to be
employed by, or providing services to, the Company, if the termination is for
any reason other than involuntary termination without cause or voluntary
termination with good reason (as defined in Grantee’s agreement), disability (as
defined in the Plan), death, cause (as defined in the Plan), or retirement as
provided herein;

     (b) the expiration of the three-year period after the Grantee ceases to be
employed by, or providing services to, the Company, on account of the Grantee’s
involuntary termination without cause or voluntary termination with good reason
as set forth in the letter agreement between the Company and Grantee dated    ;

     (c) the expiration of the one-year period after the Grantee ceases to be
employed by, or providing services to, the Company on account of the Grantee’s
disability;

     (d) the expiration of the one-year period after the Grantee ceases to be
employed by, or providing services to, the Company if the Grantee dies while
employed by the Company or within three months after the Grantee ceases to be so
employed or provide such services on account of a termination described in
subparagraph (a) above;

     (e) the date on which the Grantee ceases to be employed by, or providing
services to, the Company for cause; or

     (f) the expiration of the one-year period after the Grantee’s employment or
service terminates as a result of retirement on or after the Grantee’s
sixty-fifth birthday, or after such earlier date as may be determined by the
Committee, in its sole discretion, to be warranted given the particular
circumstances surrounding the earlier termination of the Grantee’s employment or
service.

     Notwithstanding the foregoing, in no event may the Option be exercised
after the expiration of the Term of Option specified on the reverse side. Any
portion of the Option that is not vested at the time the Grantee ceases to be
employed by, or providing service to, the Company shall immediately terminate.

     In the event a Grantee ceases to be employed by, or providing service to,
the Company for cause, the Grantee shall automatically forfeit all shares
underlying any exercised portion of an Option for which the Company has not yet
delivered the share certificates upon refund by the Company of the exercise
price paid by the Grantee for such shares.

2. Exercise Procedures.

     (a) Subject to the provisions of this Stock Option Grant Certificate and
the Plan, the Grantee may exercise part or all of the vested Option by giving
the Company written notice of intent to exercise in the manner provided in
Paragraph 11 below, specifying the number of Shares as to which the Option is to
be exercised. On the delivery date, the Grantee shall pay the exercise price
(i) in cash, (ii) by delivering Shares of the Company (duly endorsed for
transfer or accompanied by stock powers signed in blank) which shall be valued
at their fair market value on the date of delivery, or (iii) by such other
method as the Committee may approve, including payment through a broker in
accordance with procedures permitted by Regulation T of the Federal Reserve
Board. The Committee may impose from time to time such limitations as it deems
appropriate on the use of Shares of the Company to exercise the Option.

     (b) The obligation of the Company to deliver Shares upon exercise of the
Option shall be subject to all applicable laws, rules, and regulations and such
approvals by governmental agencies as may be deemed appropriate by the
Committee, including such actions as Company counsel shall deem necessary or
appropriate to comply with relevant securities laws and regulations. The Company
may require that the Grantee (or other person exercising the Option after the
Grantee’s death) represent that the Grantee is purchasing Shares for the
Grantee’s own account and not with a view to or for sale in connection with any
distribution of the Shares, or such other representation as the Board deems
appropriate. All obligations of the Company under this Stock Option Grant
Certificate shall be subject to the rights of the Company as set forth in the
Plan to withhold amounts required to be withheld for any taxes, if applicable.
Subject to Committee approval, the Grantee may elect to satisfy any income tax
withholding obligation of the Company with respect to the Option by having
Shares withheld up to an amount that does not exceed the minimum marginal tax
rate for federal (including FICA), state and local tax liabilities.

3. Change of Control. The provisions of the Plan applicable to a Change of
Control shall apply to the Option, and, in the event of a Change of Control, the
Board may take such actions as it deems appropriate pursuant to the Plan.

4. Restrictions on Exercise. Only the Grantee may exercise the Option during the
Grantee’s lifetime. After the Grantee’s death, the Option shall be exercisable
(subject to the limitations specified in the Plan) solely by the legal
representatives of the Grantee, or by the person who acquires the right to
exercise the Option by will or by the laws of descent and distribution, to the
extent that the Option is exercisable pursuant to this Stock Option Grant
Certificate. Notwithstanding the foregoing, the Committee may provide, at or
after grant, that a Grantee may transfer nonqualified stock options pursuant to
a domestic relations order or to family members or other persons or entities on
such terms as the Committee may determine.

5. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan,
the terms of which are incorporated herein by reference, and in all respects
shall be interpreted in accordance with the Plan. The grant and exercise of the
Option are subject to the provisions of the Plan and to interpretations,
regulations and determinations concerning the Plan established from time to time
by the Committee in accordance with the provisions of the Plan, including, but
not limited to, provisions pertaining to (i) rights and obligations with respect
to withholding taxes, (ii) the registration, qualification or listing of the
Shares, (iii) capital or other changes of the Company, and (iv) other
requirements of applicable law. The Committee shall have the authority to
interpret and construe the Option pursuant to the terms of the Plan, and its
decisions shall be conclusive as to any questions arising hereunder.

6. No Employment Rights. The grant of the Option shall not confer upon the
Grantee any right to be retained by or in the employ of the Company and shall
not interfere in any way with the right of the Company to terminate the
Grantee’s employment or service at any time. The right of the Company to
terminate at will the Grantee’s employment or service at any time for any reason
is specifically reserved. No policies, procedures or statements of any nature by
or on behalf of the Company (whether written or oral, and whether or not
contained in any formal employee manual or handbook) shall be construed to
modify this Grant Letter or to create express or implied obligations to the
Grantee of any nature.

7. No Stockholder Rights. Neither the Grantee, nor any person entitled to
exercise the Grantee’s rights in the event of the Grantee’s death, shall have
any of the rights and privileges of a stockholder with respect to the Shares
subject to the Option until certificates for Shares have been issued upon the
exercise of the Option.

8. No Disclosure. The Grantee acknowledges that the Company has no duty to
disclose to the Grantee any material information regarding the business of the
Company or affecting the value of the Shares before or at the time of a
termination of the Grantee’s employment, including without limitation any plans
regarding a public offering or merger involving the Company.

9. Assignment and Transfers. The rights and interests of the Grantee under this
Stock Option Grant Certificate may not be sold, assigned, encumbered or
otherwise transferred except, in the event of the death of the Grantee, by will
or by the laws of descent and distribution. In the event of any attempt by the
Grantee to alienate, assign, pledge, hypothecate, or otherwise dispose of the
Option or any right hereunder, except as provided for in this Stock Option Grant
Certificate, or in the event of the levy or any attachment, execution or similar
process upon the rights or interests hereby conferred, the Company may terminate
the Option by notice to the Grantee, and the Option and all rights hereunder
shall thereupon become null and void. The rights and protections of the Company
hereunder shall extend to any successors or assigns of the Company and to the
Company’s parents, subsidiaries, and affiliates. This Stock Option Grant
Certificate may be assigned by the Company without the Grantee’s consent.

10. Applicable Law. The validity, construction, interpretation and effect of
this instrument shall be governed by and determined in accordance with the laws
of the Commonwealth of Pennsylvania.

11. Notice. Any notice to the Company provided for in this instrument shall be
addressed to the Company in care of the Chief Financial Officer at the Company’s
headquarters and any notice to the Grantee shall be addressed to such Grantee at
the current address shown on the payroll of the Company, or to such other
address as the Grantee may designate to the Company in writing. Any notice shall
be delivered by hand, sent by telecopy or enclosed in a properly sealed envelope
addressed as stated above, registered and deposited, postage prepaid, in a post
office regularly maintained by the United States Postal Service.