exv10w5



 






EXHIBIT 10.5




SAFEGUARD SCIENTIFICS, INC.

GROUP STOCK UNIT AWARD PROGRAM




Under the Safeguard Scientifics, Inc. _______Equity Compensation Plan




     Safeguard Scientifics, Inc. (the “Company”) hereby grants to you    
restricted stock awards that vest over a    -year period (the “Award” or
“Awards”). The Award entitles you to receive in the future common shares of
stock of the Company (the “Shares”) under the Safeguard Scientifics, Inc.
   Equity Compensation Plan (the “Plan”). Set forth below is a brief
description of the tax treatment of this Award as well as some of the more
significant features and requirements of this Program. However, we encourage
you to consult with your tax advisor for any advice you need regarding this
Award. To participate in the Program, you need to execute this document, which
shall constitute your acknowledgment that all decisions and determinations by
the Company shall be final and binding on the Company, you and any other
persons having or claiming an interest hereunder.



     When an Award becomes vested, as described below, the Company will
establish a bookkeeping account in your name (the “Account”). The Account will
be credited with the number of Shares subject to the Award. The Account will
be subject to the terms of the Plan, including the terms regarding the
treatment of stock awards granted under the Plan upon a Change of Control of
the Company (as defined in the Plan). When the Company distributes a dividend
to its shareholders, the Company will pay you an amount equal to the amount
that would have been paid to your Account if you actually owned the Shares.



     You will become vested in the Shares attributable to the Award (the “Award
Shares”) as follows:    . The
vesting of the Award Shares is cumulative and all Award Shares shall be fully
vested on the    anniversary of the date the Award Shares were credited
to your Account if you continue to be employed by the Company through such
date. If the vesting schedule would produce fractional shares, the number of
Award Shares that vest shall be rounded up for any portion of a Share equal to
 .5 or greater or down for any portion of a Share equal to less than .5, in each
case to the nearest whole Share. If your employment with the Company
terminates for any reason other than death, Disability (as defined in the
Plan), retirement on or after age 65 or after a Change of Control (as defined
in the Plan) before the Award Shares have become fully vested, Award Shares
that are not then vested shall be forfeited and must be immediately returned to
the Company. If you terminate due to death, Disability, retirement on or after
age 65 or after a Change of Control, all of your Award Shares shall
automatically become 100% fully vested.



     There are no income tax consequences to you upon the granting or vesting
of an Award. Instead, your recognition of ordinary income will be postponed
until you actually receive the Shares. The Fair Market Value of the Award
Shares, as defined in the Plan, will then be treated as ordinary compensation
income on the date you actually receive them. Any amounts that you receive as
a result of the distribution of a dividend will also be treated as ordinary
compensation income when you actually receive such amounts. When you sell the
Award Shares, you will realize capital gain or loss (long-term or short-term,
depending on the length of time the Award Shares were held after distribution)
in an amount equal to the difference between your tax basis



 









 





in the Award Shares and the selling price. Your tax basis will ordinarily be
the Fair Market Value of the Award Shares at the time you received them.
However, your Award Shares will be subject to withholding for Medicare tax
purposes in the year the Award Shares become vested. In addition, the Award
Shares may be subject to withholding for Social Security tax purposes in the
year the Award Shares become vested to the extent you have not met the Social
Security tax wage base. If the Award Shares are paid to you in a year after
the Award Shares have become vested, the Award Shares and the appreciation on
the Award Shares will be exempt from any additional Medicare or Social Security
tax withholding.




     You may irrevocably elect, by providing written notice to the Company, to
receive all or a portion of the vested Award Shares credited to your Account
after the date on which you become vested in such Award Shares, which means
that if you are vested in 25% of your Award Shares after one year, you may
elect to receive a distribution of all or a portion of this 25%. Such an
election must be in writing, set forth the number of vested Award Shares that
will be distributed and be filed with the Company one year prior to the date of
distribution. In addition, you may elect to have the Award Shares become
distributable to you on a date that is later than the one-year anniversary of
the date you terminate employment again by notifying the Company of the date on
which you wish to receive a distribution. Such notice must be in writing and
filed with the Company no later than the date you terminate employment with the
Company and once made is irrevocable. Notwithstanding the foregoing, however,
distribution of all of your Award Shares must be made by the later of (i) the
date on which you attain age 70 or (ii) the fifth anniversary of your
termination of employment with the Company. If you do not make any of the
foregoing elections, you will receive a distribution of Shares equal to the
Award Shares credited to your Account as soon as is practicable after the
one-year anniversary of the date you terminate employment with the Company, but
in no event later than sixty (60) days after the one-year anniversary of the
date you terminate employment.



     Following your termination of employment, distribution of your Shares may
be made in a single distribution, or over a period of time, not to exceed five
annual installments depending on the written election you provide to the
Company. You may change this election at any time prior to your termination of
employment by providing the Company with a new written election. If you do not
make an election, your account balance will be distributed to you in a single
lump sum as soon as practicable after the one-year anniversary of your
termination of employment, but in no event later than sixty (60) days after the
one-year anniversary of the date you terminate employment. However, if your
Account balance is less than $50,000 (determined by multiplying the number of
Award Shares in your Account by the Fair Market value of the Shares on the date
of your termination) on the date you terminate employment with the Company,
your Account balance will be distributed to you in a single lump as soon as
practicable after your termination of your employment.



     In the event the Company determines that you have encountered an
unforeseeable hardship, upon receipt of your written request, you may redeem as
many Award Shares as necessary to alleviate your hardship up to the number of
vested Award Shares in your Account. Shares redeemed as the result of a
hardship will be distributed as soon as possible after the Company determines
you have encountered an unforeseeable hardship. For purposes of this Program,
unforeseeable hardship is an unexpected need for cash arising from an illness,
casualty loss, sudden financial reversal, or other such unforeseeable
occurrence. Cash needs arising from



 









 





foreseeable events such as the purchase of a house or education expenses
for children are not considered to be the result of an unforeseeable hardship.




     If you die before your Account has been fully paid out, the beneficiary
designated on your Designation Form will receive a distribution of a number of
Shares equal to the remaining Award Shares credited to your Account as soon as
administratively practicable after your death. If your beneficiary predeceases
you or if, for some reason, you have not designated a beneficiary, your Award
Shares will be paid to your surviving spouse, or, if none, your estate.



     Upon request, the Company will provide to you a statement showing the
number of Award Shares that have been credited to your Account.



     This Program may be amended, suspended or terminated at any time by the
Company; provided, however, that no amendment, suspension or termination will
adversely affect your rights.



	 	 	 	 	 
	Dated:	 	Safeguard Scientifics, Inc.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	








Acceptance of Grant:








 









 





SAFEGUARD SCIENTIFICS, INC. _____ EQUITY COMPENSATION PLAN

DEFERRED STOCK UNIT PROGRAM

ELECTION FORM




DISTRIBUTIONS





Distributions.
        shares I receive under the Program (“Award Shares”) for
the         calendar year shall be distributed on ,         which date is as least one
year from the date of this election and is prior to the later of (i) the
date on which I attain age 70 or (ii) the date that is five years after
the date on which I terminate employment with the Company. I understand
that this election is irrevocable. I further understand that if I do not
make such an election, 100% of my Award Shares will be distributed to me
as soon as practicable after the one-year anniversary of my termination of
employment.



FORM OF DISTRIBUTION




I hereby elect to have any Award Shares distributed to me in the following form:




     In a single distribution at the distribution time for the Account as discussed above.



     In substantially equal annual installments over a period of    years
[(not more than 5)] with the first installment being made at the distribution
time for the Account discussed above and the remaining installments being made
on each anniversary thereof.



I understand that if I elect to receive a percentage of my Award Shares prior
to my termination of employment that I will receive those Award Shares in a
single distribution. I further understand that I may change this election up
until the earlier of (i) the date that is one year prior to the date on which I
have elected to have my Award Shares distributed or (ii) the date I terminate
employment.




This election supersedes any prior election I have made under the Plan.




GRANTEE SIGNATURE











		
	Date: 	








Receipt Acknowledged:




	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	

	 	
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	 	 	Date:	 	 
	

	 	

	 	 	 	








 









 






SAFEGUARD SCIENTIFICS, INC.

____ EQUITY COMPENSATION PLAN

GROUP STOCK UNIT AWARD PROGRAM

BENEFICIARY DESIGNATION




Beneficiary to whom payment is to be made (as above specified) in the event of
my death before receiving distribution of the entire balance credited to my
Account:




	 	 	 
	Name
	 	Address
	
 
	 	
 
	
 
	 	
 
	
 
	 	
 
	
 
	 	
 
	
 
	 	
 
	
 
	 	
 
	
 
	 	
 







     Contingent Beneficiary to whom payment is to be made (as above specified)
in the event of my death before receiving payment of the entire balance
credited to my Account if the Beneficiary listed above dies before the entire
balance has been distributed.



	 	 	 
	Name
	 	Address
	
 
	 	
 
	
 
	 	
 
	
 
	 	
 
	
 
	 	
 
	
 
	 	
 
	
 
	 	
 
	
 
	 	
 







     I hereby revoke any Designation of Beneficiary I may previously have made
and designate the above as my Beneficiary(ies).



	 	 	 	 	 
	

	 	Date: