Exhibit 10.6

 

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INTERNET CAPITAL GROUP, INC.

1999 EQUITY COMPENSATION PLAN

(as amended and restated, effective February 28, 2007)

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The purpose of the Internet Capital Group, Inc. 1999 Equity Compensation Plan
(as amended and restated, effective February 28, 2007) (the “Plan”) is to
provide (i) designated employees of Internet Capital Group, Inc. (the “Company”)
and its subsidiaries, (ii) designated employees of entities in which the Company
has a greater than 50% ownership interest, (iii) certain advisors and
consultants who perform services for the Company or its subsidiaries, and
(iv) non-employee members of the Board of Directors of the Company (the “Board”)
with the opportunity to receive grants of incentive stock options, nonqualified
options, stock appreciation rights, restricted shares, performance shares,
dividend equivalent rights and cash awards. The Company believes that the Plan
will encourage the participants to contribute materially to the growth of the
Company, thereby benefiting the Company’s stockholders, and will align the
economic interests of the participants with those of the stockholders.

 

  1. Administration

(a) Committee. The Plan shall be administered and interpreted by a committee
appointed by the Board (the “Committee”). The Committee shall consist of two or
more persons appointed by the Board, all of whom shall be “outside directors” as
defined under section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”), and related Treasury regulations and shall be “non-employee
directors” as defined under Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). However, the Board may ratify or
approve any grants as it or the Committee deems appropriate.

(b) Committee Authority. The Committee shall have the sole authority to
(i) determine the individuals to whom grants shall be made under the Plan,
(ii) determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend
the terms of any previously issued grant, and (v) make all determinations with
respect to any other matters arising under the Plan.

(c) Committee Determinations. The Committee shall have full power and authority
to administer and interpret the Plan, to make factual determinations, and to
adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee’s interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan.
Determinations made by the Committee under the Plan need not be uniform as to
similarly situated individuals.

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  2. Grants

Awards under the Plan may consist of grants of (i) incentive stock options as
described in Section 5 (“Incentive Stock Options”), (ii) nonqualified options as
described in Section 5 (“Nonqualified Options”) (Incentive Stock Options and
Nonqualified Options are collectively referred to as “Options”), (iii) stock
appreciation rights as described in Section 7 (“SARs”), (iv) restricted shares
as described in Section 8 (“Restricted Shares”), (v) performance shares as
described in Section 9 (“Performance Shares”), (vi) dividend equivalent rights
as described in Section 10 (“Dividend Equivalent Rights”) and (vii) cash awards
as described in Section 11 (“Cash Awards”) (hereinafter collectively referred to
as “Grants”). All Grants shall be subject to the terms and conditions set forth
herein and to such other terms and conditions consistent with the Plan as the
Committee deems appropriate and as are specified in writing by the Committee to
the individual in a grant instrument (the “Grant Instrument”) or an amendment to
the Grant Instrument. The Committee shall approve the form and provisions of
each Grant Instrument. Grants under a particular Section of the Plan need not be
uniform as among the grant recipients (the “Grantees”).

 

  3. Shares Subject to the Plan

(a) Shares Authorized. For purposes of the Plan, a Share means one or more
shares of common stock of the Company, par value $.001, as determined pursuant
to Section 3(b). Subject to the adjustment specified below, the aggregate number
of Shares of the Company that may be issued or transferred under the Plan is
3,000,000 Shares. The maximum aggregate number of Shares that shall be subject
to Grants made under the Plan to any individual during any calendar year shall
be 300,000 Shares, subject to adjustment as described below. The Shares may be
authorized but unissued Shares or reacquired Shares, including Shares purchased
by the Company on the open market for purposes of the Plan. If and to the extent
Options or SARs granted under the Plan terminate, expire, or are canceled,
forfeited, exchanged or surrendered without having been exercised, or if any
Restricted Shares or Performance Shares are forfeited, the Shares subject to
such Grants shall again be available for purposes of the Plan.

(b) Adjustments. If there is any change in the number or kind of Shares
outstanding (i) by reason of a dividend, spin-off, recapitalization, split or
combination or exchange of Shares, (ii) by reason of a merger, reorganization or
consolidation in which the Company is the surviving corporation, (iii) by reason
of a reclassification or change in par value, or (iv) by reason of any other
extraordinary or unusual event affecting the outstanding Shares of the Company
as a class without the Company’s receipt of consideration, or if the value of
outstanding Shares is substantially reduced as a result of a spin-off or the
Company’s payment of an extraordinary dividend or distribution, the maximum
number of Shares available for Grants, the maximum number of Shares that any
individual participating in the Plan may be granted in any year, the number of
Shares covered by outstanding Grants, the kind of Shares issued under the Plan,
and the price per Share or the applicable market value of such Grants may be
appropriately adjusted by the Committee to reflect any increase or decrease in
the number of, or change in the kind or value of, issued Shares to preclude, to
the extent practicable, the enlargement or dilution of rights and benefits under
such Grants; provided, however, that any fractional Shares resulting from such
adjustment shall be eliminated. Any adjustments determined by the Committee
shall be conclusive and binding on all persons having any interest in the Plan
or in any awards granted hereunder. Any Shares, other securities or other
property distributed to a Grantee, or which a Grantee is entitled to receive, in
respect of Restricted Shares, which are then subject to restrictions imposed by
Section 8, by reason of any the events described in clauses (i), (ii), (iii),
(iv) or (v) above shall be subject to the restrictions and requirements imposed
on such Restricted Shares, including depositing the certificates therefor with
the Company and bearing a legend as provided in Section 8(d), unless determined
otherwise by the Committee.

 

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  4. Eligibility for Participation

(a) Eligible Persons. All employees of the Company, its parents and its
subsidiaries, and entities in which the Company has a greater than 50% ownership
interest (“Employees”), including persons who have accepted employment with the
Company or any parent or subsidiary, Employees who are officers or members of
the Board, and members of the Board who are not Employees (“Non-Employee
Directors”) shall be eligible to participate in the Plan. Advisors and
consultants who perform services to the Company or any of its parents or its
subsidiaries (“Key Advisors”) shall be eligible to participate in the Plan if
the Key Advisors render bona fide services to the Company or its parent or
subsidiary, the services are not in connection with the offer or sale of
securities in a capital-raising transaction, and the Key Advisors do not
directly or indirectly promote or maintain a market for the Company’s
securities.

(b) Selection of Grantees. The Committee shall select the Employees,
Non-Employee Directors and Key Advisors to receive Grants and shall determine
the number of Shares subject to a particular Grant in such manner as the
Committee determines.

 

  5. Options

(a) Number of Shares. Subject to Section 6, the Committee shall determine the
number of Shares that will be subject to each Grant of Options to Employees,
Non-Employee Directors and Key Advisors. Subject to adjustment as provided in
Section 3(b), the maximum aggregate number of Shares that may be subject to
Incentive Stock Options shall be 300,000 Shares.

(b) Type of Option and Price.

(i) The Committee may grant Incentive Stock Options that are intended to qualify
as “incentive stock options” within the meaning of section 422 of the Code or
Nonqualified Options that are not intended so to qualify or any combination of
Incentive Stock Options and Nonqualified Options, all in accordance with the
terms and conditions set forth herein. Incentive Stock Options may be granted
only to Employees who have actually commenced employment with the Company.
Nonqualified Options may be granted to Employees, Non-Employee Directors and Key
Advisors.

(ii) The purchase price (the “Exercise Price”) of Shares subject to an Option
shall be determined by the Committee and may be equal to, greater than, or less
than the Fair Market Value (as defined below) of a Share on the date the Option
is granted; provided, however, that (x) the Exercise Price of an Incentive Stock
Option shall be equal to, or greater than, the Fair Market Value of a Share on
the date the Incentive Stock Option is granted and (y) an Incentive Stock Option
may not be granted to an Employee who, at the time of grant, owns Shares
possessing more than 10 percent of the total combined voting power of all Shares
and other classes of stock of the Company or any parent or subsidiary of the
Company, unless the Exercise Price per Share is not less than 110% of the Fair
Market Value of a Share on the date of grant.

 

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(iii) If the Shares are publicly traded, then the Fair Market Value per Share
shall be determined as follows: (x) if the principal trading market for the
Shares is a national securities exchange, the last reported sale price thereof
on such date or, if there are no trades on that date, the next date upon which a
sale is reported, or (y) if the Shares are not principally traded on such
exchange or market, the mean between the last reported “bid” and “asked” prices
of a Share on such date , as reported on Nasdaq or, if not so reported, as
reported by the National Daily Quotation Bureau, Inc. or as reported in a
customary financial reporting service, as applicable and as the Committee
determines. If the Shares are not publicly traded or, if publicly traded, are
not subject to reported transactions or “bid” or “asked” quotations as set forth
above, the Fair Market Value per Share shall be as determined in good faith by
the Committee; provided that, if the Shares are publicly traded, the Committee
may make such discretionary determinations where the shares have not been traded
for 10 trading days.

(c) Option Term. The Committee shall determine the term of each Option. The term
of any Option shall not exceed ten years from the date of grant. However, an
Incentive Stock Option that is granted to an Employee who, at the time of grant,
owns Shares possessing more than 10 percent of the total combined voting power
of all Shares and other classes of stock of the Company, or any parent or
subsidiary of the Company, may not have a term that exceeds five years from the
date of grant.

(d) Vesting and Exercisability of Options.

(i) Vesting. Options shall vest in accordance with such terms and conditions as
may be determined by the Committee and specified in the Grant Instrument or an
amendment to the Grant Instrument. The Committee may accelerate the vesting of
any or all outstanding Options at any time for any reason.

(ii) Exercisability. Notwithstanding the foregoing, the Option may, but need
not, include a provision whereby the Grantee may elect at any time while an
Employee, Non-Employee Director or Key Advisor to exercise the Option as to any
part or all of the Shares subject to the Option prior to the full vesting of the
Option. Any unvested Shares so purchased shall be subject to a repurchase right
in favor of the Company, with the repurchase price to be equal to the lesser of
(x) the original purchase price or (y) the Fair Market Value of the Shares on
the date of such repurchase, or to any other restriction the Committee
determines to be appropriate.

 

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(e) Termination of Employment, Retirement, Disability or Death.

(i) Except as provided below and subject to the provisions of the Grant
Instrument, an Option may only be exercised while the Grantee is an Employee,
Key Advisor or member of the Board. In the event that a Grantee has a
Termination of Service (as defined below) for any reason other than Retirement
(as defined below), Disability (as defined below), death or Cause (as defined
below), any Option which is otherwise exercisable by the Grantee shall terminate
unless exercised within 90 days after the date of such termination (or within
such other period of time as may be specified by the Committee), but in any
event no later than the date of expiration of the Option term. Except as
otherwise provided by the Committee, any of the Grantee’s Options that are not
otherwise exercisable as of the date on which the Grantee has such a Termination
of Service shall terminate as of such date.

(ii) In the event the Grantee has a Termination of Service on account of a
termination for Cause by the Company, unless otherwise determined by the
Committee (x) any Option held by the Grantee shall terminate as of the date of
such Termination of Service and (y) the Grantee shall automatically forfeit all
Shares underlying any exercised portion of an Option for which the Company has
not yet delivered the certificates, upon refund by the Company of the lesser of
the (i) Exercise Price paid by the Grantee for such Shares, or (ii) Fair Market
Value of the Shares on the date of such Termination of Service.

(iii) In the event the Grantee has a Termination of Service on account of
Retirement, any Option which is otherwise exercisable by the Grantee shall
terminate unless exercised within three years after the date of such Termination
of Service (or within such other period of time as may be specified by the
Committee), but in any event no later than the date of expiration of the Option
term. To the extent that the Option is an Incentive Stock Option, any portion of
the Option not exercised within the three month period after the Grantee has a
Termination of Service on account of Retirement shall be a Nonqualified Stock
Option. Except as otherwise provided by the Committee, any of the Grantee’s
Options which are not otherwise exercisable as of the date of such Termination
of Service shall terminate as of such date.

(iv) In the event the Grantee has a Termination of Service on account of
Disability, any Option which is otherwise exercisable by the Grantee shall
terminate unless exercised within three years after the date of such Termination
of Service (or within such other period of time as may be specified by the
Committee), but in any event no later than the date of expiration of the Option
term. To the extent that the Option is an Incentive Stock Option, any portion of
the Option not exercised within the one year period after the Grantee has a
Termination of Service on account of Disability shall be a Nonqualified Stock
Option. Except as otherwise provided by the Committee, any of the Grantee’s
Options which are not otherwise exercisable as of the date of such Termination
of Service shall terminate as of such date.

 

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(v) If the Grantee dies while an Employee, Key Advisor or member of the Board or
within 90 days after the date on which the Grantee has a Termination of Service
specified in Section 5(e)(i) above (or within such other period of time as may
be specified by the Committee), any Option that is otherwise exercisable by the
Grantee shall terminate unless exercised within three years after the date of
such death or Termination of Service (or within such other period of time as may
be specified by the Committee), but in any event no later than the date of
expiration of the Option term. Except as otherwise provided by the Committee,
any of the Grantee’s Options that are not otherwise exercisable as of the date
of such Termination of Service shall terminate as of such date.

(vi) For purposes of Sections 5(e), 7, 8, and 9 of the Plan:

(A) “Cause” shall mean, except to the extent specified otherwise by the
Committee, a finding by the Committee that (1) the Grantee has breached his or
her employment, service, noncompetition, nonsolicitation or other similar
contract with the Company or its parent and subsidiary corporations, (2) has
been engaged in disloyalty to the Company or its parent and subsidiary
corporations, including, without limitation, fraud, embezzlement, theft,
commission of a felony or dishonesty in the course of his or her employment or
service, (3) has disclosed trade secrets or confidential information of the
Company or its parent and subsidiary corporations to persons not entitled to
receive such information or (4) has entered into competition with the Company or
its parent or Subsidiary Corporations. Notwithstanding the foregoing, if the
Grantee has an employment agreement with the Company defining “Cause,” then such
definition shall supersede the foregoing definition.

(B) “Company” shall mean the Company and its parent and subsidiary corporations
or other entities, as determined by the Committee.

(C) “Disability” shall mean a Grantee’s becoming disabled within the meaning of
section 22(e)(3) of the Code.

(D) “Retirement” shall mean a Grantee’s Termination of Service with the consent
of the Company after the attainment of age 55 and pursuant to the Company’s
retirement plan.

(E) “Termination of Service” shall mean a Grantee’s termination of employment or
service as an Employee, Key Advisor or member of the Board (so that, for
purposes of the Plan, cessation of service as an Employee, Key Advisor and
member of the Board shall not be treated as a Termination of Service if the
Grantee continues without interruption to serve thereafter in another one (or
more) of such other capacities) unless the Committee determines otherwise.

(f) Exercise of Options. A Grantee may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the
Company with payment of the Exercise Price. The Grantee shall pay the Exercise
Price for an Option as specified by the Committee (x) in cash, (y) by delivering
Shares owned by the Grantee for the period necessary to avoid a charge to the
Company’s earnings for financial reporting purposes and to avoid adverse
accounting consequences to the Company (including Shares acquired in connection
with the exercise of an Option, subject to such restrictions as the Committee
deems appropriate) and having a Fair Market Value on the date of exercise equal
to the Exercise Price or by attestation (on a form prescribed by the Committee)
to ownership of Shares having a Fair Market Value on the date of exercise equal
to the Exercise Price, or (z) 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; provided, that, for purposes of
assisting a Grantee to exercise an Option, the Company may make loans to the
Grantee or guarantee loans made by third parties to the Grantee, on such terms
and conditions as the Committee may authorize. The Grantee shall pay the
Exercise Price at the time of exercise and shall satisfy the withholding tax
requirements of Section 14.

 

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(g) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide
that, if the aggregate Fair Market Value of the Shares on the date of the grant
with respect to which Incentive Stock Options are exercisable for the first time
by a Grantee during any calendar year, under the Plan and any other equity
compensation 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 Option. No
Incentive Stock Option shall be granted to any person who is not an Employee of
the Company or a parent or subsidiary of the Company (within the meaning of
section 424(f) of the Code).

 

  6. Option Grants to Non-Employee Directors

Only Non-Employee Directors shall be eligible to receive the Option grants
described in this Section 6.

(a) [Reserved.]

(b) Service Grants. Each calendar year, the Board may determine, in its sole
discretion, to provide that each Non-Employee Director shall be granted a
Nonqualified Stock Option to purchase Shares in an amount determined by the
Board; provided that on each such grant date the Non-Employee Director is a
member of the Board (a “Service Grant”).

(c) Conversion Grants. In its sole discretion, the Board may grant a
Nonqualified Option to any eligible Non-Employee Director who was a member of
the Board of Managers of Internet Capital Group, L.L.C. and who became a member
of the Board immediately following the execution of the Agreement of Merger
dated February 2, 1999 to compensate such Non-Employee Director for the
cancellation of outstanding options held by such Non-Employee Director
immediately prior to the execution of such Agreement of Merger; provided,
however, that such grant shall be subject to the availability and adjustment of
Shares issuable under the Plan pursuant to Section 3 (a “Conversion Grant”).

(d) Aggregate Limitation on Grants. Notwithstanding any provision of this Plan
to the contrary, the maximum number of Shares subject to Service Grants and
Conversion Grants which may be awarded to any Non-Employee Director under the
Plan shall not exceed 50,000 Shares.

(e) Terms of Service Grants and Conversion Grants. Unless otherwise determined
by the Committee as reflected in the applicable Grant Instrument, each Option
granted pursuant to this Section 6 shall be subject to the following terms:

(i) Each such Option shall have a term of eight years from the date of the
applicable Option is granted.

 

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(ii) Each Service Grant shall fully vest on the first anniversary of the date of
the grant of such Option, unless determined otherwise by the Board. Each
Conversion Grant shall vest as set forth in the applicable Grant Instrument.

 

  7. Stock Appreciation Rights

(a) General Requirements. The Committee may grant SARs to an Employee,
Non-Employee Director or Key Advisor separately from or in tandem with any
Option (for all or a portion of the applicable Option). Tandem SARs may be
granted either at the time the Option is granted or at any time thereafter while
the Option remains outstanding; provided, however, that, in the case of an
Incentive Stock Option, SARs may be granted only at the time of the grant of the
Incentive Stock Option. The Committee shall establish the base amount of the SAR
at the time the SAR is granted. Unless the Committee determines otherwise, the
base amount of each SAR shall be equal to the per Share Exercise Price of the
related Option or, if there is no related Option, the Fair Market Value of a
Share as of the date of grant of the SAR.

(b) Tandem SARs. In the case of tandem SARs, the number of SARs granted to a
Grantee that shall be exercisable during a specified period shall not exceed the
number of Shares that the Grantee may purchase upon the exercise of the related
Option during such period. Upon the exercise of an Option, the SARs relating to
the Shares purchased pursuant to such Option shall terminate. Upon the exercise
of SARs, the related Option shall terminate to the extent of an equal number of
Shares.

(c) Exercisability. An SAR shall be exercisable during the period specified by
the Committee in the Grant Instrument and shall be subject to such vesting and
other restrictions as may be specified in the Grant Instrument. The Committee
may accelerate the exercisability of any or all outstanding SARs at any time for
any reason. SARs may only be exercised while the Grantee is as an Employee, Key
Advisor or member of the Board or during the applicable period after Termination
of Service as described in Section 5(e). A tandem SAR shall be exercisable only
during the period when the Option to which it is related is also exercisable. No
SAR may be exercised for cash by an executive officer or director of the Company
or any of its subsidiaries who is subject to section 16 of the Exchange Act,
except in accordance with Rule 16b-3 under the Exchange Act.

(d) Value of SARs. When a Grantee exercises an SAR, the Grantee shall receive in
settlement of such SAR an amount, payable in cash, Shares or a combination
thereof, as determined by the Committee, equal to the amount by which the Fair
Market Value of a Share on the date of exercise of the SAR exceeds the base
amount of the SAR as described in Section 7(a).

(e) Form of Payment. The Committee shall determine whether the appreciation in
an SAR shall be paid in the form of cash, Shares, or a combination of the two,
in such proportion as the Committee deems appropriate. For purposes of
calculating the number of Shares to be received, Shares shall be valued at their
Fair Market Value on the date of exercise of the SAR. If Shares are to be
received upon exercise of a SAR, cash shall be delivered in lieu of any
fractional Share.

 

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  8. Restricted Shares

The Committee may issue or transfer Shares to an Employee, Non-Employee Director
or Key Advisor under a Grant of Restricted Shares, upon such terms as the
Committee deems appropriate. The following provisions are applicable to
Restricted Shares:

(a) General Requirements. Shares issued or transferred pursuant to Restricted
Share Grants may be issued or transferred for consideration or for no
consideration, and subject to restrictions or no restrictions, as determined by
the Committee. The Committee may establish conditions under which restrictions
on Restricted Shares shall lapse over a period of time or according to such
other criteria as the Committee deems appropriate. The period of time during
which the Restricted Shares will remain subject to restrictions will be
designated in the Grant Instrument as the “Restriction Period.”

(b) Number of Shares. The Committee shall determine the number of Restricted
Shares to be issued or transferred and the restrictions applicable to such
Grant.

(c) Requirement of Employment or Service. If the Grantee has a Termination of
Service during a period designated in the Grant Instrument as the Restriction
Period, or if other specified conditions are not met, the Restricted Share Grant
shall terminate as to all Shares covered by the Grant as to which the
restrictions have not lapsed, and those Shares must be immediately returned to
the Company, and the Company shall refund to the Grantee the lesser of (x) the
consideration, if any, paid by the Grantee for such Shares and (y) the Fair
Market Value of the Shares as of the date of such Termination of Service. The
Committee may, however, provide for complete or partial exceptions to these
requirements as it deems appropriate.

(d) Restrictions on Transfer and Legend on Certificate. During the Restriction
Period, a Grantee may not sell, assign, transfer, pledge or otherwise dispose of
the Restricted Shares except as permitted under Section 15. Each certificate for
Restricted Shares shall contain a legend giving appropriate notice of the
restrictions in the Grant. The Grantee shall be entitled to have the legend
removed from the certificate covering the Restricted Shares subject to
restrictions when all restrictions on such Shares have lapsed. The Committee may
determine that the Company will not issue certificates for Restricted Shares
until all restrictions on such Shares have lapsed, or that the Company will
retain possession of certificates for Restricted Shares until all restrictions
on such Shares have lapsed.

(e) Right to Vote and to Receive Dividends. Unless the Committee determines
otherwise, during the Restriction Period, the Grantee shall have the right to
vote Restricted Shares and to receive any dividends or other distributions paid
on such Shares, subject to any restrictions deemed appropriate by the Committee,
including, without limitation, the achievement of specific performance goals.

(f) Lapse of Restrictions. All restrictions imposed on Restricted Shares shall
lapse upon the expiration of the applicable Restriction Period and the
satisfaction of all conditions imposed by the Committee. The Committee may
determine, as to any or all Restricted Share Grants, that the restrictions shall
lapse without regard to any Restriction Period.

 

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  9. Performance Shares

(a) General Requirements. The Committee may grant Performance Shares
(“Performance Shares”) to an Employee or Key Advisor. Each Performance Share
shall represent the right of the Grantee to receive an amount based on the value
of the Performance Share, if performance goals established by the Committee are
met. The value of a Performance Share shall be based on the Fair Market Value of
a Share as of the date of payment in respect of such Performance Share is to be
made or on such other measurement base as the Committee deems appropriate. The
Committee shall determine the number of Performance Shares to be granted and the
requirements applicable to such Shares.

(b) Performance Period and Performance Goals. When Performance Shares are
granted, the Committee shall establish the performance period during which
performance shall be measured (the “Performance Period”), performance goals
applicable to the Shares (“Performance Goals”), if any, and such other
conditions of the Grant as the Committee deems appropriate. Performance Goals
may relate to the financial performance of the Company or its operating shares,
the performance of Shares, individual performance, or such other criteria as the
Committee deems appropriate.

(c) Payment with Respect to Performance Shares. At the end of each Performance
Period, the Committee shall determine to what extent the Performance Goals and
other conditions of the Performance Shares have been met and the amount, if any,
to be paid with respect to the Performance Shares. Payments with respect to
Performance Shares shall be made in cash, in Shares, or in a combination of the
two, as determined by the Committee. Any fractional Performance Share shall be
paid in cash. Unless otherwise determined by the Committee, any Performance
Shares with respect to which the Committee determines that the applicable
Performance Goals or other conditions have not been met within the Performance
Period shall be forfeited.

(d) Requirement of Employment or Service. If the Grantee has a Termination of
Service during a Performance Period, or if other conditions established by the
Committee are not met, the Grantee’s Performance Shares shall be forfeited. The
Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.

(e) Restrictions on Transfer. Rights to payments with respect to Performance
Shares granted under the Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, garnishment, levy, execution, or other legal or equitable process,
either voluntary or involuntary; and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, attach or garnish, or levy or execute on any
right to benefits payable hereunder, shall be void.

(f) Limited Rights. Performance Shares are solely a device for the measurement
and determination of the amounts to be paid to a Grantee under the Plan. Each
Grantee’s right in the Performance Shares is limited to the right to receive
payment, if any, as may herein be provided. The Performance Shares do not
constitute Shares and shall not be treated as (or as giving rise to) property or
as a trust fund of any kind; provided, however, that the Company may establish a
mere bookkeeping reserve to meet its obligations hereunder or a trust or other
funding vehicle that would not cause the Plan to be deemed to be funded for tax
purposes or for purposes of Title I of the Employee Retirement Income Security
Act of 1974, as amended. The right of any Grantee of Performance Shares to
receive payments by virtue of participation in the Plan shall be no greater than
the right of any unsecured general creditor of the Company. Nothing contained in
the Plan shall be construed to give any Grantee any rights with respect to
Shares or any ownership interest in the Company. Except as may be provided in
accordance with Section 10, no provision of the Plan shall be interpreted to
confer upon any Grantee any voting, dividend or derivative or other similar
rights with respect to any Performance Share.

 

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  10. Dividend Equivalent Rights

(a) General Requirements. The Committee may grant Dividend Equivalent Rights to
Employees Non-Employee Directors and Key Advisors. Each Dividend Equivalent
Right shall represent the right to receive, either credits for or payments of,
amounts based on the dividends declared on Shares, to be credited or paid as of
the dividend payment dates, during the term of the Dividend Equivalent Right as
determined by the Committee. With respect to Dividend Equivalent Rights granted
with respect to Options intended to be qualified performance-based compensation
for purposes of section 162(m) of the Code, such Dividend Equivalent Rights
shall be payable regardless of whether such Option is exercised.

(b) Certain Terms. Unless otherwise determined by the Committee, a Dividend
Equivalent Right is exercisable or payable only while the Grantee is an
Employee, member of the Board or Key Advisor. Payment of the amount determined
in accordance with Section 10(a) shall be in cash, in Shares or a combination of
the two, as determined by the Committee. The Committee may impose such other
terms conditions on the grant of a Dividend Equivalent Right as it deems
appropriate in its discretion as reflected by the terms of the Grant Instrument.

(c) Dividend Equivalent Right with Other Grants. The Committee may establish a
program under which Dividend Equivalent Rights may be granted in conjunction
with other Grants. For example, and without limitation, the Committee may grant
a Dividend Equivalent Right in respect of each Share subject to an Option or
with respect to a Performance Share, which right would consist of the right to
receive a cash payment in an amount equal to the dividend distributions paid on
a Share from time to time.

(d) Deferral. The Committee may establish a program under which the payments
with respect to Dividend Equivalent Rights may be deferred. Such program may
include, without limitation, provisions for the crediting of earnings and losses
on unpaid amounts, and, if permitted by the Committee, provisions under which
Grantees may select from among hypothetical investment alternatives for such
deferred amounts in accordance with procedures established by the Committee.

 

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  11. Cash Awards

The Committee may grant Cash Awards to Employees, Non-Employee Directors and Key
Advisors. The cash payment due upon settlement of a Cash Award shall be based on
the attainment of performance goals and shall be subject to such other
conditions, restrictions and contingencies as the Committee shall determine as
reflected by the terms of the Grant Instrument.

 

  12. Qualified Performance-Based Compensation

(a) Designation as Qualified Performance-Based Compensation. The Committee may
determine that Restricted Shares, Performance Shares and Cash Awards granted to
an Employee shall be considered “qualified performance-based compensation” under
section 162(m) of the Code. The provisions of this Section 12 shall apply to
Grants of Restricted Shares Performance Shares and Cash Awards that are intended
to be “qualified performance-based compensation” under section 162(m) of the
Code.

(b) Performance Goals. When Restricted Shares, Performance Shares or Cash Awards
that are intended to be “qualified performance-based compensation” are granted,
the Committee shall establish in writing (i) the objective performance goals
that must be met in order for restrictions on the Restricted Shares to lapse or
amounts to be paid under the Performance Shares or Cash Awards as applicable,
(ii) the Performance Period during which the performance goals must be met,
(iii) the threshold, target and maximum amounts that may be paid if the
performance goals are met, and (iv) any other conditions, including without
limitation provisions relating to death, Disability, other Termination of
Service or Reorganization, that the Committee deems appropriate and consistent
with the Plan and section 162(m) of the Code and the Treasury regulations
thereunder. The performance goals may relate to the Employee’s individual
performance or the performance of the Company and its subsidiaries as a whole,
or any combination of the foregoing. The Committee shall use objectively
determinable performance goals based on one or more of the following criteria:
Share price, earnings per Share, net earnings, operating earnings, return on
assets, stockholder return, return on equity, growth in assets, share volume,
sales, market share, or strategic business criteria consisting of one or more
objectives based on meeting specific revenue goals, market penetration goals,
geographic business expansion goals, cost targets or goals relating to
acquisitions or divestitures.

(c) Establishment of Goals. The Committee shall establish the performance goals
in accordance with Section 12(b) in writing either before the beginning of the
Performance Period or during a period ending no later than the earlier of (i) 90
days after the beginning of the Performance Period or (ii) the date on which 25%
of the Performance Period has been completed, or such other date as may be
required or permitted under applicable regulations under section 162(m) of the
Code. The performance goals shall satisfy the requirements for “qualified
performance-based compensation,” including the requirement that the achievement
of the goals be substantially uncertain at the time they are established and
that the goals be established in such a way that a third party with knowledge of
the relevant facts could determine whether and to what extent the performance
goals had been met. The Committee shall not have discretion to increase the
amount of compensation that is payable upon achievement of the designated
performance goals.

(d) Maximum Payment. If Restricted Shares, or Performance Shares measured with
respect to the Fair Market Value of Shares, are granted pursuant to this
Section 12, not more than 1,250 Shares may be granted to an Employee under such
Restricted Shares or Performance Shares for any Performance Period. If Cash
Awards, or Performance Shares measured with respect to criteria other than the
Fair Market Value of Shares, are granted pursuant to this Section 12, the
maximum amount that may be paid to an Employee under such Cash Awards or
Performance Shares with respect to a Performance Period is $2,000,000.

 

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(e) Performance Certification. The Committee shall certify and announce the
results for each Performance Period to all Grantees immediately following the
announcement of the Company’s financial results for the Performance Period. If
and to the extent that the Committee does not certify that the performance goals
have been met, the grants of Restricted Shares, Performance Shares, or Cash
Awards made pursuant to this Section 12 for the Performance Period shall be
forfeited.

(f) Death, Disability, or Other Circumstances. The Committee may provide that
Performance Shares, Cash Awards, or Restricted Shares shall be payable, or
restrictions on Restricted Shares shall lapse, in whole or in part, in the event
of the Employee’s death or Disability during the Performance Period, or under
other circumstances consistent with the Treasury regulations and rulings under
section 162(m) of the Code.

 

  13. Deferrals

The Committee may permit or require a Grantee to defer receipt of the payment of
cash or the delivery of shares that would otherwise be due to such Grantee in
connection with any Option or SAR, the lapse or waiver of restrictions
applicable to Restricted Shares, the satisfaction of any requirements or
objectives with respect to Performance Shares, or the payment of cash with
respect to Cash Awards. If any such deferral election is permitted or required,
the Committee shall, in its sole discretion, establish rules and procedures for
such deferrals.

 

  14. Withholding of Taxes

(a) Required Withholding. The Company shall be entitled to withhold from any
payments or deemed payments any amount of tax withholding (including all
federal, state and local taxes) determined by the Committee to be required by
law. Without limiting the generality of the foregoing, the Committee may, in its
discretion, require the Grantee to pay to the Company at such time as the
Committee determines the amount that the Committee deems necessary to satisfy
the Company’s obligation to withhold federal, state or local income or other
taxes incurred by reason of (i) the exercise of any Option or SAR, (ii) the
lapsing of any restrictions applicable to any Restricted Shares, (iii) the
receipt of a payment in respect of Performance Shares, Dividend Equivalent
Rights or Cash Awards or (iv) any other applicable income recognition event (for
example, an election under section 83(b) of the Code). Notwithstanding anything
contained in the Plan to the contrary, the Grantee’s satisfaction of any
tax-withholding requirements imposed by the Committee shall be a condition
precedent to the Company’s obligation as may otherwise be provided hereunder to
provide Shares to the Grantee and to the release of any restrictions as may
otherwise be provided hereunder, as applicable; and the applicable options,
SARs, Restricted Shares, Performance Shares or Dividend Equivalent Rights shall
be forfeited upon the failure of the Grantee to satisfy such requirements with
respect to, as applicable, (i) the exercise of the option or SAR, (ii) the
lapsing of restrictions on the Restricted Share (or other income recognition
event) or (iii) payments in respect of any Performance Share or Dividend
Equivalent Right.

 

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(b) Election to Withhold Shares. If the Committee so permits, a Grantee may make
a written election to satisfy the Company’s income tax withholding obligation
with respect to an Option, an SAR, Restricted Shares, Performance Shares or
Dividend Equivalent Rights paid in Shares by having Shares withheld by the
Company from the Shares otherwise to be received, or to deliver previously owned
Shares (not subject to restrictions hereunder). In the event that the Committee
permits and Grantee makes such an election, the number of Shares so withheld or
delivered shall have an aggregate Fair Market Value on the date of exercise that
does not exceed the Grantee’s minimum withholding tax rate for federal
(including FICA), state and local tax liabilities. Where the exercise of an
Incentive Stock Option does not give rise to an obligation by the Company to
withhold federal, state or local income or other taxes on the date of exercise,
but may give rise to such an obligation in the future, the Committee may, in its
discretion, make such arrangements and impose such restrictions as it deems
necessary or appropriate. The election must be in a form and manner prescribed
by the Committee and shall be subject to the prior approval of the Committee.

 

  15. Transferability of Grants

(a) In General. Except as provided in Section 15(b), only the Grantee may
exercise rights under a Grant during the Grantee’s lifetime. A Grantee may not
transfer those rights except by will or by the laws of descent and distribution,
or, with respect to Grants other than Incentive Stock Options, if permitted in
any specific case by the Committee, pursuant to a domestic relations order. When
a Grantee dies, the personal representative or other person entitled to succeed
to the rights of the Grantee (“Successor Grantee”) may exercise such rights in
accordance with the terms of the Plan. A Successor Grantee must furnish proof
satisfactory to the Company of his or her right to receive the Grant under the
Grantee’s will or under the applicable laws of descent and distribution.

(b) Transfer of Nonqualified Options. Notwithstanding the foregoing, the
Committee may provide in a Grant Instrument that a Grantee may transfer
Nonqualified Options to family members or other persons or entities, consistent
with applicable securities laws, according to such terms as the Committee may
determine where the Committee determines that such transferability does not
result in accelerated federal income taxation; provided that the Grantee
receives no consideration for the transfer of an Option and the transferred
Option shall continue to be subject to the same terms and conditions as were
applicable to the Option immediately before the transfer.

 

  16. Reorganization of the Company

(a) Reorganization. As used herein, a “Reorganization” shall be deemed to have
occurred if the stockholders of the Company approve (or, if stockholder approval
is not required, the Board approves) an agreement providing for (i) the merger
or consolidation of the Company with another corporation where the stockholders
of the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, Shares
entitling such stockholders to more than 50% of all votes to which all
stockholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), (ii) the sale or other disposition of all
or substantially all of the assets of the Company, or (iii) a liquidation or
dissolution of the Company.

 

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(b) Assumption of Grants. Upon a Reorganization where the Company is not the
surviving corporation (or survives only as a subsidiary of another corporation),
unless the Committee determines otherwise, all outstanding Options and SARs that
are not exercised shall be assumed by, or replaced with comparable options or
rights by, the surviving corporation.

(c) Other Alternatives. Notwithstanding the foregoing, in the event of a
Reorganization, the Committee may take one or both of the following actions: the
Committee may (i) require that Grantees surrender their outstanding Options and
SARs in exchange for a payment by the Company, in cash or Shares as determined
by the Committee, in an amount equal to the amount by which the then Fair Market
Value of the Shares subject to the Grantee’s unexercised Options and SARs
exceeds the Exercise Price of the Options or the base amount of the SARs, as
applicable, or (ii) after accelerating all vesting and giving Grantees an
opportunity to exercise their outstanding Options and SARs, terminate any or all
unexercised Options and SARs at such time as the Committee deems appropriate.
Such surrender or termination shall take place as of the date of the
Reorganization or such other date as the Committee may specify.

(d) Limitations. Notwithstanding anything in the Plan to the contrary, in the
event of a Reorganization, the Committee shall not have the right to take any
actions described in the Plan (including without limitation actions described in
Section 17(c)) that would make the Reorganization ineligible for pooling of
interests accounting treatment or that would make the Reorganization ineligible
for desired tax treatment if, in the absence of such right, the Reorganization
would qualify for such treatment and the Company intends to use such treatment
with respect to the Reorganization.

 

  17. Change of Control of the Company

(a) Definition. As used herein, a “Change of Control” shall be deemed to have
occurred if:

(i) Any “person” (as such term is used in sections 13(d) and 14(d) of the
Exchange Act) other than Safeguard Scientifics, Inc. or any of its subsidiaries
or affiliates becomes a “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
a majority of the voting power of the then outstanding securities of the Company
except where the acquisition is approved by the Board; or

(ii) Any person has commenced a tender offer or exchange offer for a majority of
the voting power of the then outstanding Shares of the Company.

(b) Notice and Acceleration. Upon a Change of Control the Company shall provide
each Grantee with outstanding Grants written notice of such Change of Control,
and the Committee may, in its sole discretion, provide for any of the following:
(i) all outstanding Options and SARs shall automatically accelerate and become
fully exercisable, (ii) the restrictions and conditions on all outstanding
Restricted Shares shall immediately lapse, and (iii) Grantees holding
Performance Shares shall receive a payment in settlement of such Performance
Shares, in an amount determined by the Committee, based on the Grantee’s target
payment for the Performance Period and the portion of the Performance Period
that precedes the Change of Control.

 

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(c) Acceleration on Account of a Termination of Service. In the event of a
Change of Control, if a Grantee incurs a Termination of Service (as defined in
Section 5(e)(vi)(E)) on account of an involuntary termination by the Company
without Cause (as defined in Section 5(e)(vi)(A)) within 1 year after the Change
of Control, (i) all outstanding Options and SARs held by the Grantee shall
automatically accelerate and become fully exercisable, (ii) the restrictions and
conditions on all outstanding Restricted Shares shall immediately lapse, and
(iii) Grantees holding Performance Shares shall receive a payment in settlement
of such Performance Shares, in an amount determined by the Committee, based on
the Grantee’s target payment for the Performance Period and the portion of the
Performance Period that precedes the Change of Control.

(d) Other Alternatives. Notwithstanding the foregoing, subject to Subsection
(e) below, in the event of a Change of Control, the Committee may also take one
or both of the following actions: the Committee may (i) require that Grantees
surrender their outstanding Options and SARs in exchange for a payment by the
Company, in cash or Shares as determined by the Committee, in an amount equal to
the amount by which the then Fair Market Value of the Shares subject to the
Grantee’s unexercised Options and SARs exceeds the Exercise Price of the Options
or the base amount of the SARs, as applicable, or (ii) after giving Grantees an
opportunity to exercise their outstanding Options and SARs, terminate any or all
unexercised Options and SARs at such time as the Committee deems appropriate.
Such surrender or termination shall take place as of the date of the Change of
Control or such other date as the Committee may specify.

(e) Committee. The Committee making the determinations under this Section 17
following a Change of Control must be comprised of the same members as those on
the Committee immediately before the Change of Control. If the Committee members
do not meet this requirement, the automatic provisions of Section 17(b) and
(c) above shall apply in the case of such a Change of Control, and the Committee
shall not have discretion to vary them.

(f) Limitations. Notwithstanding anything in the Plan to the contrary, in the
event of a Change of Control, the Committee shall not have the right to take any
actions described in the Plan (including without limitation actions described in
Section 17(d) above) that would make the Change of Control ineligible for
pooling of interests accounting treatment or that would make the Change of
Control ineligible for desired tax treatment if, in the absence of such right,
the Change of Control would qualify for such treatment and the Company intends
to use such treatment with respect to the Change of Control.

 

  18. Requirements for Issuance or Transfer of Shares

No Shares shall be issued or transferred in connection with any Grant hereunder
unless and until all legal requirements applicable to the issuance or transfer
of such Shares have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition any Grant made to any Grantee
hereunder on such Grantee’s undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such Shares as the
Committee shall deem necessary or advisable as a result of any applicable law,
regulation or official interpretation thereof, and certificates representing
such Shares may be legended to reflect any such restrictions. Certificates
representing Shares issued or transferred under the Plan will be subject to such
stop-transfer orders, registration and other restrictions as may be required by
applicable laws, regulations and interpretations, including any requirement that
a legend be placed thereon.

 

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  19. Amendment and Termination of the Plan

(a) Amendment. The Board may amend or terminate the Plan at any time; provided
that the Board may not make any amendment to the Plan that would, if such
amendment were not approved by the stockholders of the Company, cause the Plan
to fail to comply with any requirement of applicable law or regulation, unless
and until the approval of the stockholders is obtained.

(b) Termination of Plan. The Plan shall terminate on the day immediately
preceding the tenth anniversary of its effective date, unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval of
the stockholders.

(c) Termination and Amendment of Outstanding Grants. A termination or amendment
of the Plan that occurs after a Grant is made shall not materially impair the
rights of a Grantee unless the Grantee consents or unless the amendment is
required in order to comply with applicable law. The termination of the Plan
shall not impair the power and authority of the Committee with respect to an
outstanding Grant. Whether or not the Plan has terminated, an outstanding Grant
may be terminated or amended in accordance with the Plan or may be amended by
agreement of the Company and the Grantee consistent with the Plan.

(d) Governing Document. The Plan shall be the controlling document. No other
statements, representations, explanatory materials or examples, oral or written,
may amend the Plan in any manner. The Plan shall be binding upon and enforceable
against the Company and its successors and assigns.

 

  20. Funding of the Plan

The Plan shall be unfunded. The Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any Grants under the Plan. In no event shall interest be paid or
accrued on any Grant, including unpaid installments of Grants.

 

  21. Rights of Participants

Nothing in the Plan shall entitle any Employee, Non-Employee Director, Key
Advisor or other person to any claim or right to be granted a Grant under the
Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving any individual any rights to be retained by or in the employ of the
Company or any other employment rights.

 

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  22. No Fractional Shares

No fractional Shares shall be issued or delivered pursuant to the Plan or any
Grant. The Committee shall determine whether cash, other awards or other
property shall be issued or paid in lieu of such fractional Shares or whether
such fractional Shares or any rights thereto shall be forfeited or otherwise
eliminated.

 

  23. Headings

Section headings are for reference only. In the event of a conflict between a
title and the content of a Section, the content of the Section shall control.

 

  24. Effective Date of the Amended and Restated Plan

The Plan initially became effective on February 2, 1999, and was amended and
restated effective on May 1, 1999 and effective July 25, 2001. It was
subsequently amended on each of October 16, 2001, December 16, 2002 and
February 25, 2005. This amendment and restatement of the Plan is effective
February 28, 2007.

 

  25. Miscellaneous

(a) Grants in Connection with Corporate Transactions and Otherwise. Nothing
contained in the Plan shall be construed to (i) limit the right of the Committee
to make Grants under the Plan in connection with the acquisition, by purchase,
lease, merger, consolidation or otherwise, of the business or assets of any
corporation, firm or association, including Grants to employees thereof who
become Employees or for other proper corporate purposes, or (ii) limit the right
of the Company to grant stock options or make other awards outside of the Plan;
provided, that the total number of Shares issuable upon exercise of all
outstanding options shall not exceed 30% of the then outstanding Shares of the
Company unless approved by a two-thirds vote of the stockholders. Without
limiting the foregoing, the Committee may make a Grant to an employee of another
corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company or any of its subsidiaries in substitution for a stock
option or restricted share grant made to such employee by such corporation. The
terms and conditions of the substitute grants may vary from the terms and
conditions required by the Plan and from those of the substituted stock
incentives. The Committee shall prescribe the provisions of the substitute
grants.

(b) Compliance with Law. The Plan, the exercise of Options and SARs and the
obligations of the Company to issue or transfer Shares under Grants shall be
subject to all applicable laws and to approvals by any governmental or
regulatory agency as may be required. With respect to persons subject to section
16 of the Exchange Act, it is the intent of the Company that the Plan and all
transactions under the Plan comply with all applicable provisions of Rule 16b-3
or its successors under the Exchange Act. In addition, it is the intent of the
Company that the Plan and applicable Grants under the Plan comply with the
applicable provisions of section 162(m) of the Code and section 422 of the Code.
To the extent that any legal requirement of section 16 of the Exchange Act or
sections 162(m) or 422 of the Code as set forth in the Plan ceases to be
required under section 16 of the Exchange Act or sections 162(m) or 422 of the
Code, that Plan provision shall cease to apply. The Committee may revoke any
Grant if it is contrary to law or modify a Grant to bring it into compliance
with any valid and mandatory government regulation. The Committee may, in its
sole discretion, agree to limit its authority under this Section 25(b).

(c) Governing Law. The validity, construction, interpretation and effect of the
Plan and Grant Instruments issued under the Plan shall exclusively be governed
by and determined in accordance with the law of the State of Delaware.

 

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